Ne?tled Case Study

Nestled Case study Nestled in the high country of New Zealand’s South Island is a getaway adventure playground aimed unashamedly at the world’s very wealthy. Celebrity sportspeople, Rock stars, World Leaders and Corporate Chief Executives and other world globe-trotters are the prime targets of this new tourism business developed by Lilybank Lodge. The lodge offers these exclusive niche segments the opportunity of a secluded holiday in a little known paradise. Guests, commonly under public scrutiny in their everyday lives, can escape such pressures at an idyllic retreat designed exclusively and specifically with their needs in mind.

A chance meeting between a New Zealand Department of Conservation investigator and the son of the former Indonesian president marked the beginning of this speciality tourist operation. Recognising that ‘filthy rich’ people and public figures or celebrities are constantly surrounded by security and seldom have the luxury of going anywhere ‘incognito’, the New Zealander Kerry Mortimer suggested he and a friend purchase a high country station and lodge that was for sale.

Mortimer believed that the facilities and their secluded and peaceful environment would make an ideal holiday haven for this elite group. Kerry Mortimer, who was by now the company’s Managing Director, developed a carefully tailored package of goods and services for the property. Architecturally designed accommodations, including a fully equipped Gymnasium and Spa Treatment & Beauty Salon, together with luxurious guest rooms were constructed and deigned by the country’s leading designers’.

Although New Zealand had an international reputation for being sparsely populated and green, Mortimer knew that rich travellers frequently complained that local accommodations were below overseas standards. Since the price of these rooms was not felt to be a major barrier to this type of targeted customer, the rooms were designed as twice as big as normal hotel rooms and to a very sumptuous specification, all with breathtaking panoramic views. Ten full-time dedicated staff were taken together with four special tour guides in keeping with the anticipated class and wealth of the potential clientele(Pickton, 2005).

The 2800 acres of the retreat also backed onto the South Island’s Mount Cook National Park which also offered big game reserve hunting as well as many other outdoor pursuits. Lilybank lodge therefore developed other product-line extensions. Horse trekking and riding, golfing on a nearby rural course, world class photographic lessons and sessions, helicopter rides nature walks and other activities formed part of this exclusive package. Whilst still in the early stages of operation, this retreat has already attracted a steady stream of visitors.

To date the manager has relied solely on positive word of mouth, publicity and some initial PR activity. Given the social and business circles in which the target market resides he decides to employ a marketing consultant to design and implement a more planned marketing communications strategy. The report should also consider the implication already voiced by one critical observer that this project is again evidence of yet another example of local land passing into the hands of foreigners!!

The MD and manager are convinced that the major markets and attention should be on International markets but is there a case for marketing some of the attraction to a more local and national market? Introduction Marketing communications can be defined as communications by means of promotion within a target audience or market. To communicate with consumers in order to persuade them to buy the company’s products is by no means the only objective. To view it as being only sales-orientated is to underestimate the complexity of modern marketing communications. It is necessary to target customers in an integrated fashion to inform, persuade and remind prospective and existing consumers and customers of the firm, its products and services and how these are differentiated to appeal to and satisfy targeted needs, wants and desires of target markets. ” (Kotler, 2002) Marketing communications does not entail the continuous application of tried and tested techniques, rather it is constantly moving and dynamic, not just in terms of messages, but also medias, monies expended and changing consumer mindsets.

An example of this, product placement, which involves the deliberate featuring of a product or brand in a film or television programme, was in its infancy even five years ago. Today, however, it represents a useful – if still marginal – element of the communications programme for many consumer goods organisations. Promotion is the communication arm of the marketing mix. Our hotel use various promotional approaches to communicate with target markets (the guests) and the following text will look at the general dimensions of promotion, defining promotion in the context of marketing.

Next, to understand how promotion works, the text analyses the meaning and process of communication, as well as the product (our services) adoption process. The remaining of the text discusses the major types of promotional methods and the factors that influence promotion across cultures. The Promotional Mix The promotion mix, one of the four major components of the marketing mix, involves a careful blending of several elements to accomplish the organisation’s specific promotion objectives. The four traditional elements are advertising, personal selling, sales promotion and public relations.

Advertising The first element I will discuss is advertising, which can be defined as “any paid form of non-personal promotion transmitted through a mass-medium. ” (Brassington & Petit, 2000, P. 593) “The purpose of an advertising plan is to provide the means by which appropriate messages are devised and delivered to target audiences who then act in appropriate ways. ” (Fill, 2002, P. 486) Any paid form of no personal communication through the mass media about a product or service by an identified sponsor is advertising.

The mass media used include magazines, direct mail, radio, television, billboards, and newspapers. This is used when the sponsor wants to communicate with a number of people who cannot be reached economically and effectively through personal means. Personal Selling Personal, face-to-face contact between a staff’s representative and those people with whom the staff wants to communicate is personal selling. Non-profit organisations, political candidates, companies, and individuals use personal selling to communicate with the publics. Public Relations

A further element of the promotional mix is public relations, which is defined by the Institute of Public Relations (1986) as “the deliberate, planned and sustained effort to establish and maintain mutual understanding between an organisation and its public. ” Communication to correct erroneous impressions, maintain the goodwill of the hotel’s many publics, and explain the hotel’s goals and purposes is called public relations (PR). Unlike the other promotional mix elements, public relations are concerned primarily with people outside the target market, although it may include them.

Publicity is news carried in the mass media about a hotel – its products, policies, services, personnel, or actions – at no charge to the organisation for media time and space. Unlike the other tools in the promotional mix, public relations does not require the purchase of airtime and space in media vehicles, such as T. V or magazines. And compared to the other promotional tools, public relations have higher credibility because the decision whether or not a hotel’s public relations messages are delivered is not down to the hotel, but those charged with managing the media resource.

Another big advantage PR has over other tools is that it has such low absolute costs(Kitchen, 2000). Within the communications programme of a hotel, public relations have two major roles to play. “These are the development and maintenance of corporate goodwill and the continuity necessary for good product support. ” The first task of PR is to provide a series of cues by which the stakeholders can recognise, understand and position the hotel in such a way that it builds a strong reputation.

Sales Promotion Sales promotion communicates with targeted receivers in a way that is not feasible by using other elements of the promotion mix. It involves any activity that offers an incentive to induce a desired response by staffs, intermediaries, and/or final customers/guests. Sales promotion activities add value to the service because the incentives ordinarily do not accompany the service. According to the Institute of Sales Promotion, sales promotion is “… range of tactical techniques designed within a strategic marketing frameworks to add value to a product or service in order to achieve specific sales and marketing objectives. ” This added value could be in the form of an inducement, (for example, price-offs, coupons, premiums, seasonal-offs) and is intended to encourage guests to act now rather than later. PR and Publicity Public Relations is perceived the most important in terms of marketing Lilybank Lodge. Journalist, media representatives and travel writers have a key role to play in establishing a positive profile.

Also, popular sporting events, festivals, or visits by high profile celebrities or prominent politicians are excellent opportunities for eliminating the chronic negative image. Process by mass media such as TV, newspapers and films, and accounts given by friends, relatives or associates are powerful in the consumer’s decision. Lilybank Lodge’s image as a tourist destination greatly depends on the PR activities of its marketers and the extent to which they can influence or manipulate tourist’s perceptions of the region(Kitchen, 2003).

Tourism representatives had agreed not to underestimate the negative perceptions the prospective tourist had in his/her mind and was created by mass media, newspapers and films covering the ‘trouble’. What was needed was a strategic promotion of it’s tourism attractions on the part of tour operators and promotional bodies seeking to influence potential tourists. However many had their doubts. In McGuckin and Demick (2000) many doubts were rissen: One respondent suggested: “Positive advertising could never fully overcome negative editorial or media coverage(Ilchul, 2004)”.

Another that: “It is difficult for us to control the negative publicity particularly that created by the media”. Lilybank Lodge ‘s objective regarding Publicity for 2003 is to create awareness of New Zealand and portray the desired images of the island. E-Marketing and the Internet The objective is the offer the consumer information about New Zealand through Internet sites, mail and email to past enquiries in order to convert interest to booking and developing banner advertising to direct consumers to micro-sites, which have special offers and a call to action.

Trade Support Activity The objective is to educate and support the market trade so they can promoted New Zealand effectively. Promotions The objective is to offer information and create the intention among consumers to come and visit New Zealand. External Analysis: Threats Economic The industry faces major challenges in regaining its competitiveness in the light of reducing customer satisfaction ratings, in particular as regards delivering good value for money. There are a number of key factors influencing this problem:

Social, cultural, demographic and environmental With growing concerns for environmental issues, New Zealand needs to become more aware of the problems with litter and pollution. These are the issues with lowest satisfaction levels of visitors as outlined by Failte New Zealand Visitor Attitude Surveys. The increase in competition from Eastern European countries has posed a threat by taking part of the market segment New Zealand once catered for. People are changing the way that they holiday. People are taking shorter holidays, but more often.

For example, Vienna, once expensive, has reinvented itself as a reasonable conference and city break destination. In 2002, against the expectations of the industry, the number of domestic trips recorded – at 5. 8 million – represented a decrease on 2001 performance and a 10% decrease on 2000. While business trips are at a steady rate, home holidays and visiting friends and relatives is down, as the graph below illustrates. (Cornelissen, 2006) Political, Legal and Government A major decrease in NZ investment in Irish tourism poses a major threat to the industry.

NZ grants, tax incentives and infrastructure supports are not as readily available as in the mid to late 1990s. Technological With the advancements in modern communication the need to travel has become less important. Telephone conferencing and the Internet are now alternatives to one on one business meetings. More affordable and efficient means of transport now allows for shorter stays, thus decreasing potential revenue for hotels. Internal Analysis: Strengths Experience With over 20 years in the business the Hotel has an established name and reputation.

Recent and Proposed Investment The recent refurbishment and proposed expansion of 20 new bedrooms indicates that the hotel has capital to invest in its growth. Staff and customer loyalty A longstanding relationship with both employees and the cities business population creates a sense of security within the hotel Good relations with competition The hotel proposed to investigate running a training scheme in conjunction with other hotels in the area. This indicates that they have a good relationship with their competitors. Customer Focused

The hotel has identified the need to become more customer focused and flexible in their approach to the needs of their clients. Location Having a central location within the city is a major advantage. It provides easy access for customers and suppliers. There is a larger market for the restaurant and bar facilities. Other amenities are close by. E. g. : Pharmacy, Newsagents etc. Expansion The hotel is planning to expand which shows that they are forward thinking and are not complacent when it comes to competition. Identified Weaknesses (Utilizing resources)

They have identified the fact that their employees could be better utilized with some organization and planning Diverse Workforce The ages of the employees are wide ranging which enriches the company’s culture and combines the experience and know how of the older generation with the enthusiasm and new ideas of the younger one. Internal Analysis: Weaknesses Lack of Skilled Workforce The Hotel has had problems with attracting receptionists and chefs with the required level of skill. High Staff turnover There is a constant problem in certain areas for retaining staff.

Technology The hotel does not seem to have any computer systems in place which is to its detriment. Older staff resistant to change The fact that there are a number of older staff who have worked in the hotel for a great many years may be a problem with regards to implementing new systems. Training and Development There is currently no training for staff and a lack of foresight for future career paths within the organization. Reactionary The hotel clearly reacts to its problems as opposed to planning for unforeseen circumstances.

Although they are planning for the future, they do not take into account the problems they may face. Bad planning and Utilization Employees clearly need to be better organized within the hotel. A problem like shift change times overlapping busy checkout times is something that just should not be happening in a hotel that’s in operation for more than 20 years. Lack of facilities The hotel has only the basic facilities any hotel of its size would have. A huge competitive advantage is being missed out on due to the lack of innovative extras within the hotel.

Transport The lack of transport at awkward hours has a significant impact on staff retention in the hotel. Situation Analysis and Preliminary Assessment This section includes a SWOT analysis of the Lilybank Lodge case study and preliminary assessments based on currently available data regarding market conditions, market segmentation, and market size. S. W. O. T. Analysis of the Lilybank Lodge case study This section reviews the strengths, weaknesses, external opportunities, and external threats (SWOT) for Lilybank Lodge in its current situation. Internal Strengths There is no ordinary rooms in the hotel •Quality evaluations are very good compared to competitors •Located a within blocks of the financial district and Inner Harbor tourist sites External Opportunities •Increase sales figures •Increase net profit Internal Weaknesses •Not too many amenities •Received little promotion both locally and nationally •No kitchenettes External threats •Other hotels or units that offer similar service with the competitive price or even at the lower level • Down falling economy Preliminary Assessment of Market Conditions

This section records preliminary observations on the market advantages and disadvantages of an all-suite hotel. Advantages: • Rooms are 500 to 800 square feet compared to traditional hotel rooms which are 300 to 400 square feet •Privacy •Business people can conduct small meetings in there hotel rooms •Convenient because it’s located near the business district and near tourist attractions Disadvantages: • More staff needed •More expensive for upkeep •Some people don’t want such a big room •No big function rooms for weddings etc… Market Segmentation

All-suite hotels entered the hospitality market with the business traveler in mind, providing home-away-from-home comforts for long business trips and separate living and sleeping rooms to better accommodate in-room business meetings. It wasn’t long, however, before the benefits to traveling families became equally apparent. Private sleeping areas for parents or for children’s naptime and kitchen facilities to save money on meals as well as to accommodate children’s eating patterns are among the benefits of all-suite travel for families with children.

The market for Lilybank Lodge can be reasonably segmented into two categories: business travelers and leisure travelers. (Holm, 2006) • Business Travelers – need hotel rooms year round, but usually emphasize weekdays (M-T). They are likely to evaluate the hotel on the following criteria: price (although not very price sensitive, they can’t afford to be too free and easy with their expenses), level of personal service provided, degree of physical luxury (rooms, restaurants, lobby, decor, extra amenities) location relative to next days usiness meetings, ambiance / atmosphere of hotel and quality of upkeep (clean and fresh). • Leisure Travelers – tend to visit on weekends. They may be slightly more price sensitive than business travelers and be looking for packaged deals (special weekend rates including some meals), they will also want a location close to shops, restaurants, entertainment and attractions. If they were touring by car then on-site parking would be an issue. Preliminary Market Size Analysis In this section, a preliminary market size estimate for business travelers and leisure travelers is produced.

Business travelers •31% of hotel occupancy, 51% with groups •What is happening to business travel •Stagnation ==> high fares and technology alternatives •Still need for face-to-face meetings •Globalization is a positive factor •What do business travelers want • Location, service, reputation, appropriate product, price • Significance of women as growth business travel market Leisure travelers •68% of trips, 43% of hotel stays •Leisure trips have been growing at twice the pace of business trips Recommendations based on assessment

Lilybank Lodge has already made a good start towards a successful marketing strategy for their Baltimore Hotel. It’s going to be tough to get the hotel started due to the falling economy. The hotel needs to get a good staff. Staff is very important because they leave a lasting impression on the customers. Lilybank Lodge needs to really concentrate on customer satisfaction. If they can get customer satisfaction then they have got through half the battle. Lilybank Lodge should also concentrate on online sales.

Everyone uses the Internet and that’s where he or she will find most of there traveling accommodations. Lilybank Lodge should also go to different businesses and explain to them all the amenities that they offer. They should also reevaluate their amenities because it seems by the survey that they are low in that factor. I believe the Lilybank Lodge. Suites will do just fine. Business people are traveling all the time and they definitely like idea of all suite hotels. It’s roomier, very convenient for business meeting and they have privacy which in ordinary hotels they lack that greatly.

Lilybank Lodge’s tourism industry needs to select the correct image for the region and communicate it to the appropriate target markets. Public relations and media management(Picktan, 2005) Conclusion In this paper communication was discussed as a vital strategic element of Lilybank Lodge’s especially a new opened hotel and importance was given to integrating the various promotional tools to achieve an effective focus. The main influence for communications and other management functions must be directed by long term aims and objectives developed as part of a comprehensive strategy.

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