Think Outside the Box
By Debra Murphy, Vista Consulting
This week I received an email from a desperate student in a marketing course who was working on a case study and was a bit stuck. In her initial email to me she made the following comment:
“I am currently a business management student … in a marketing course. My first marketing course and I must say I am struggling with the marketing concept. I was wondering if you would be able to help me “think outside the box” better. Meaning, I, like most, are programmed to think marketing is just about selling and brand names.”
A couple of things happened when I read that statement. First, whether she knew it or not, I had to respond because she hit one of my hot buttons about marketing being perceived so narrowly – in this case selling and brand names. Second, I thought this exercise would be a good illustration of the thought process involved in developing your marketing strategy for your business.
Hotel Case Study
The case she was working on involved the following details: There is a newly renovated 60 room hotel located just off the highway in a prime spot that is yet to be developed 10 miles from a tourist area. It offers few amenities, only continental breakfast and free cable TV. Occupancy has been decreasing and according to the survey of tourists, 68 percent are young couples or older ones with no children, 78 percent say that recreational facilities are a big attraction for accommodations, and 38 percent of these were first time visitors. The objective is to save this hotel without having to merge with a more well known chain.
After reading the brief synopsis of the case, one’s first instincts would be to increase advertising and develop the requested recreational facilities. This is a common leap that many businesses make rather than assess whether there is some market niche that would be attracted to the hotel in its given state. Marketing is very closely tied to business strategy for a reason. Marketing needs to weight the effects of various activities on both the bottom and top line of the income statement. Given that the hotel’s occupancy has declined, investing a lot of money in general advertising and building new facilities may not be a good business decision until the hotel gains a level of revenue that can justify that investment.
Develop the Marketing Strategy
Good marketing takes into account two major areas: STP – segmentation, targeting and positioning, and the four P’s: product (including packaging), pricing, place and promotion. The point of starting your marketing planning process with a market analysis that incorporates segmentation, targeting and positioning is to identify a potential target audience that would most likely buy your product or service as it currently stands, or in the worst case, surface issues with your product or service that need correcting before you can successfully sell it. Without understanding the product or service’s best STP and jumping right to the one P everyone associates with marketing, promotion, you spend money ineffectively and you miss the opportunity to focus your marketing effort and win a large share of that market at a lower cost.
Identify the Best Target Market
In this case study, the marketer first needs to think about which market segment would most likely stay at this hotel. Since it is 10 miles away from the tourist area which may contain night life and entertainment, singles probably would not be a good choice since they would want direct access to the night life with an easy walk back to the hotel.
Younger couples may be a good choice, but given the feedback that having recreational facilities is a big attraction, I would suspect that the younger set who would want to access these facilities. I did make an assumption that the recreational facility being referred to is a health club, spa or other type of service that benefits from convenient access to your room.
Another target audience would be seniors. They may appreciate the quiet of this hotel at the end of the day, getting away from the night life and relaxing so they have the energy to do more the next day. Plus, not having the recreational facility at the hotel may not be an issue with most seniors who have walked around all day or did other types of tourist activities.
The 4 P’s – Product, Pricing, Place and Promotion
Let’s assume that the seniors are our target market for this hotel. We now need to look at the 4 P’s in order to determine how we can attract this target audience to our hotel. (See this month’s tip for more on the 4 P’s).
Since the hotel is 10 miles from the tourist area, offering a free or really inexpensive shuttle service running at regularly scheduled intervals would be a benefit. They can easily get to the activities without having to drive and part their cars. If they come as a bus tour, they have the freedom to come and go as they pleased without being tied to a bus schedule.
Another attraction for seniors is discounts on meals. Work with some of the restaurants to provide discount coupons for people staying at the hotel. Put a coupon packet together for each hotel guest and have it for them when they check in.
Other ideas:
- Partner with a tour agent and work out a package deal that would work for both parties.
- Advertise with AARP or other senior citizen organizations to more effectively reach your target.
- Rent lists of seniors from these organizations to do a direct marketing campaign.
As you can see, focusing on one target audience makes developing your promotional activities much easier than if you are trying to spread your messages too thin.
Positioning and Messages
Once you have the types of promotional ideas outlined, you need to develop your positioning (how you want your target audience to perceive your hotel and its service) and your messages. Are you the hotel that offers seniors a quiet, safe haven at the end of an enjoyable day of sightseeing? Develop that into your messages for all promotional activities. When the messages are in place, you are ready to begin developing the details around the promotional activities.
Summary
Try to avoid making assumptions quickly when you are developing a marketing strategy for a particular product or service. A little bit of strategic thinking can point you in a direction that can be a winner. It is hard to tell with marketing what will and will not work because we’re dealing with people, and we all know that people are the hardest to predict, however, looking at trends, understanding the target market, and applying the four P’s to your situation can help you deliver a strategy and set of tactics that can impact the revenue and profits of your company.
