Tuesday, June 4, 2013

Motel on-line marketing campaign

1.1 Background In recent years, the competition is very fierce in hospitality industry. As the market is highly saturated, company should constantly improve the quality of product and service, and also urgently required of creating new product and service. Thus only innovated businesses can survive in this industry. As an innovated UK-based hotel business, Motel has modern architectural style, spectacular views of the surroundings, entertainment piazza, and excellent services. In addition, this company realised internet is a very powerful marketing tool and they already has a good website and client database. The hospitality industry in the UK has been affected by the recent recession which greatly reduced the purchasing power of the various customers. Also, there has been an increase in the use of internet shopping for hospitality packages. This has created a scenario where the customers are more critical and sophisticated in their shopping habits. The internet has made it possible for customers to shop around for the cheaper offers in the market while also purchasing very less (Brotherton, 2000). There has also been growing movement towards ethical consumption where customers become so keen on knowing the origin of the various products which they are consuming. On top of the above, there has also been the increased consideration of the corporate responsibility of the business especially regarding their commitment to the issues of the environment, their involvement to the activities of the communities where they live. This is used by the businesses as an indicator that the businesses can achieve their objectives while also doing the right thing. In the recent past, the industry in the UK has been faced with a variety of outsourcing especially for schools, local authorities, and other businesses who are seeking to reduce their costs and concentrate on their core businesses. This has been a point of major opportunity which marketing campaigns of the firms in the industry should target. The growth in the use of technology has changed the way business is carried out in the industry especially through the various innovations such as user-generated content (UGC) websites, online booking and check-in, an increase in the use of internet to purchase products, database mining techniques and finding new customers through the use of social networking sites (Barrows, C. and Powers, 2009). This paper is aimed at creating an on-line marketing campaign using paid-advertising for a new service from Motel Company, a hypothetical business that does not exist in reality. The second part of the paper is a PMI analysis of the major on-line competitors of the firm. 1.2 A Creative Service Recently the business carried out a creative service called an unrivalled standard of personal service. This service system records everyone’s personal preference and favourites, thus helps maximising positive living experience not only for retained customers but also for new customers (Kandampully, Mok and Sparks, 2001). The above was carried through the use of a customer satisfaction survey where customers answered questions about their perception of the values of the products which they are offered by the firm. After the surveys, the firm has been able to offer tailored products thus helping the firm to have a competitive advantage. Blogs are developed by Motel so that the customers of the firm can be able to effectively give feedback about what they thought about the services of the firm. The other people who are currently not the customers of the firm can be able to query the services and establish those that can suit them. The firm will be able to provide hospitality services which are highly personalised thus a high sales levels thereby creating a higher level of revenue for the firm (Reid and Bojanic, 2009). 1.3 Segmentation Market segmentation is important as the hospitality industry in the UK has become so saturated that all the additional spending on promotions are yielding diminishing returns. Segmentation is important since it helps to leverage on the scarce resources that the firm has (Jenkins and McDonald, 1996). Segmentation can be carried out through the use of consumer criteria for instance the behaviour of the consumers which may include elements such as the transactions or purchases they make, the way they use technology etc. The second element is the psychological which involves element of personality, motives, perceptions, attitudes, lifestyles and the benefits that are sought after by the customers (Plummer, 2007). Finally, there are the different profiles of the potential consumers especially regarding their geographical locations, demographic as well as socio-economic factors (Weinstein, 1994). To target the correct market efficiently for this new service, Motel has divided three groups of segmentation by age. The three segments are listed below: 18-30 The young people aged from 18-30 are easily access to newest technology and innovative ideas. And they are high education, mobility and highly motivated. However, this segment composed of students and unemployed people who have low consumption levels. This group is mainly made up of the solo travellers and the backpackers who are typically explorers who are more inclined on the provision of low pricing without any great regards towards the services and the amenities that they are provided with in the hotels. The people in this group are highly social ad thus they would occasionally need services which can give them access to the other customers for instance creation of common areas in the motel or lounges which are shared (Plummer, 2007). 30-50 The people aged from 30-45 has high mobility due to this group people already has a job and standard income. And also most of them have family and child. Thus they requires much more travels whether for work or for family. When travelling as couples or romantic partners, they will require quiet premises and high quality of service for instance they will need very high quality bedding. The other areas of focus for this group of people are the condition of rooms; this includes both the internal and the external areas of the hotels (Plummer, 2007). Over 50 This segment of people is highly experienced in travel, thus they already have their own loyalty hotels. But the new service brings much benefits may cause the change of their loyalties. This will be achieved through positioning the motel as a high quality service outlet where the customers will walk out more satisfied than they walked in. This category may include people who travel for business meetings who have established a long tradition of boarding in certain hotels (Plummer, 2007). The company’s main target audience is the people aged from 30-45. This group of people have not established any great loyalties to the hospitality outlets that are in the market. They pay attention to the prices at which the products are offered. Also, this group also highly pay attention to offers which are targeted at the children whom they may go with to such travels. These discounts may come in the form of reduced room services, and other children attraction features such as amusement parks. On top of the above reasons, this is the group that also records a very high usage level of the opportunities created by the development of technology (Plummer, 2007). They are more inclined to make use of the internet to connect with their peers, to share and acquire information. Also, they have the financial capability to back up their spending needs. 2.0 Online Marketing Campaign 2.1 E-Advertising E-advertising also called online advertisement and refers to the form of promotion which uses World Wide Web and the internet marketing messages so that the customers could be attracted to the products of the firm. E-advertisement may contain elements of animation. There are a variety of benefits that are enjoyed by businesses when they use e-advertising as compared to the traditional methods of advertising. First is the fact that contents and information can be published immediately without any delays created by either time or geography. Secondly, e-advertising allows for easier customisation of the various adverts for instance the contents of the various websites are customised to the needs of the targeted customers. Examples of this customisation can be found in the AdSense by Google and the Yahoo search marketing. The spending on e-advertisement has continuously grown over the years as more companies and firm have continued to appreciate the capabilities brought about by the technological advancement. E-advertisement has an ability to publicise a product and reach the targeted niches of audience (Kurtz and Boone, 2010). E-advertising can be purchased through a number of ways. They include Cost-Per-View (CPV), where the advertisers pay for each viewer of the advertisement or the website. Cost Per Mille (CPM), the advertisers pay for the exposure of their message to a given audience. There are also charges that are levied when targeted visitor is brought to the website in the form of Cost Per visitor (CPV). Finally, there is Pay per click (PPC) where advertisers pay every time a user clicks on the adverts. It is different from CPV in that payment is made every time a click is made regardless of whether the person viewed the contents or not (Shim, 2000). 2.2 Comparison of different channels The firm can use a variety of channels to make their targeted customers acquire the varied information which they wish to pass to the customers. The channels include: AdWords is a program that was developed by Google to generate revenues for the firm. AdWord uses key words which consist of headlines, mostly less than 25 characters long, which are displayed on the right side of the screen when someone types the same key words in Google search. In some instances, the AdWords are displayed on the top of the search results. There are certain features of AdWords which make them very important for targeted advertising. The first is IP address exclusion which allows the advertisers to specify where the ad will not be shown in terms of geography and language (Goodman, 2009). Facebook advertisement makes use of the Facebook social networking site to deliver advertisement content to the various potential customers of the firm who may be users of the social network. The core element which make up Facebook advertisement include a link to a Facebook account, or a web page, a title with a maximum of 25 characters, an advert with a maximum of 135 characters and an image which is optional. Facebook advertising can offer targeted advertising more easily as compared to the other e-ad methods due to the huge user information data that it has. The advantages of Facebook ads include clickable ads that remain on the original webpage, and the ability to gather response from the users (Zarrella and Zarrella, 2011). Banner advertising refers to a form of advertisement on the World Wide Web where contents are delivered by embedding adverts into the web pages. The traffic is attracted to a website by linking to the website that is owned by the advertiser (Shimp, 2010). The affiliate websites earn money when users click on the ads. In the US, the CPC is around 5 US cents per click on the banner ad. Email advertising refers to the sending of promotional materials directly to the potential customers to help in the acquisition of new customers or to urge those who have bought from the firm to remain faithful. Email ads may also entail cases where advertisement or marketing messages are embedded in the email messages that people send and receive. However, emails are very prone to be treated as spam and thus in most cases; they are never looked at by the people whom they are intended for. Email ads can be considered due to the facts that; it’s driven by data, it can build trust, loyalty and relationship between people and also allows for targeting (Napier, 2006). Websites can be developed by firms to act as communication hubs and the organisational visible point on the internet where the customers of the firm can see what the firm offers as well as interact with the firm. It is therefore very important to present the organisation well if the contract between the organisation and the current customers is to continue. Websites contain such information as the services and the products of the firm, the price listings, and the contact persons, various announcement and ways through which the public can communicate with the firm either through emails or other avenues (Canzer, 2006). Website advertising is important for a number of reasons; promptly answering customer questions, saves shopping time thus good customer experience, collect information about the behaviour of the customers, and also has an effective order collection and payment system. Finally, websites can be accessed by a very huge audience base at the time that is comfortable for the targeted consumers. 2.3 Estimated cost AdWords cost between $4.47-$5.5 per click traditionally. However, there have been changes that have ensured that the AdWords cost are determined by the company through a competitive bidding process. The firms that bid higher amounts will get better ranks on the pages. The bids are based on CPC (Goodman, 2009). The AdWords are simple to set thus can be done by the normal IT technicians in the firm. This cost per click can create a situation where the spending of the firm highly fluctuates as it cannot determine the number of customers who will click the ads. Facebook ads were costing around $0.49 per click in 2010. However due to the increasing demand for Facebook advertising, there has been an increase in charges per click due to limited ad spaces. Big firms have turned to Facebook advertising thus limiting the space fro the ads. To keep up with the demand, a price increase will suffice. Since the motel targets people between 30 and 45 years old, there are almost 10 million UK users in this group (Zarrella and Zarrella, 2011). The charges are 68p per lick. If all the 10 million click the ad in a day, the cost would be overwhelming to the firm. Banners are comparatively less expensive if compared to Facebook ads. A 160 by 600 pixels banner supporting 20 clicks goes for $3 while the same size banner supporting 900 clicks goes for approximately $245. The advertisers have the choice of the network sites where their ads appear. The firm will spend approximately $30,000 per month (Shimp, 2010). However, when the firm seeks premium positions on the website, the price is likely to increase. Email ads are also barely expensive. Providers of the services in the market currently charge between $150 and $400 for one million email ads. When this amount is multiplied by the 10 million targeted customers, the amount will come to between $1500 and $4000 (Shimp, 2010). This is fairly a little sum of money if the firm was sure the emails would not be treated as spam. Finally, there are website advertisements which can be done through the pay per click for the external websites or the firm can develop its own website which can cost between $7,000 and $15,000. The advantage would be that the once a customer is directed into the website. The firm will develop its own website that may be connected to the other popular website through the use of banners, Facebook adverts and email components (Zarrella et al., 2011). 2.4 Justification of choice The choice to develop a website is arrived at due to the limited cost that the firm would incur to have a well functioning website. Secondly, websites allows for easier tracking of the web browsing histories of the users thus allowing for targeted marketing. Also, websites allows for easier customer feedback as well as the firm easily answering questions that the users may have, commonly in the FAQs section. The advertising can also be geo-localised so that it can be received by people who come from the geographic location (Canzer, 2006; Zarrella et al., 2011). 3.0 Measurement and track The measurement of the effectiveness of the website will be done through considering the number of clicks that the website records. Secondly, the feedback especially positive feedback that is received will also be used as a measurement parameter. The tracking of the movement of the potential customers will be done through the information that is collected by the cookies (Canzer, 2006). 4.0 Competitors The main competitors of the firm include those that are found in the hospitality industry who target the people between the ages of 30 to 45 years. 4.1 PMI analysis The competitors of the firm use various methods of e-advertisement to reach their potential consumers. Due to the similarities of the on-line activities of the various firms, an analysis will follow of three main firms which have employed slightly different online activities in their activities aimed at advertising the products which the firm offers. To aid in the analysis, PMI analysis tool will be used. PMI analysis is a tool that is used to screen ideas so that the most appropriate technique is implemented. PMI makes use of three main considerations: the plus, the minus and the interesting. When there are many positives recorded about an idea, it should be implemented while in the case where there are many negatives about an idea, it should be shelved (Rebernik and Bradac, n.d.). A hypothetical firm 1 exclusively uses email advertising to reach its potential customers. The firm has been spending considerable amounts of money in acquiring these services from the providers so that they can be able to reach there customers. Email advertising by firm 1 Plus Minus Interesting Low cost; Instant delivery of messages; Prompt response; Message integration for reinforcement; Ability to reach large number of people directly. (Shimp, 2010). High rate of undelivered messages; Email overloads thus no reading; Renderability problems due to different reading systems; Different communication preferences (Schneider, 2011). Ability to personalise messages thus allows for targeting. A hypothetical firm 2 exclusively uses Facebook advertising to reach its potential customers. Facebook advertising by firm 2 Plus Minus Interesting Ability to reach many users, 20 million in UK; Customisation of ads; Low cost; High number of modes of ads payment. (Zarrella and Zarrella, 2011) Facebook is visited for socialisation; Facebook holds only moderate information about people; Clouding of the system due to irrelevant ads; High costs of PPC. Ability to reach a high number of people; Allows for target marketing. The hypothetical firm 3 uses banner ads as a way to reach their potential customers. Banner advertising by firm 3 Plus Minus Interesting Capability for consumer targeting; (Longenecker, Moore, and Palich, 2006) High consumer scepticism as the customers are not sure of where the banner click will lead them; Oversaturation resulting from poor design of the banners. Lower costs of maintaining; Increased credibility when well designed. 4.2 Redevelop website The website of the firm should be redeveloped to include the various leverage points of the other firm in terms of the methods that they have used to advertise their products online. All the three components of email advertising, Facebook advertising and banner advertising will be incorporated into the website of the firm. The website of the firm should be designed in such away that it’s able to have an integrated system that can send emails to the people who visit the website (Brown, 2011). The information of the people who visit the website should be collected for instance in a feedback section where they leave their email addresses and comments about what they felt about the company. The browsing history especially through cookies will then be used to analyse the preferences of the potential consumers. Secondly, the banners of the firm should be well positioned in relevant websites. Upon clicking these banners, the users will be directed to the website of the firm. The banners should be unique and be in the direct eye contact of the viewers of the websites where the banners are placed. Towards this endeavour, the firm should be able to bid for the positions on the website where the banner was more likely to be seen (Shimp, 2010). The third component that must be integrated into the website are the Facebook like and share icons, where the users can click. Upon clicking, the users will be able to receive pertinent information regarding the firm for instance the pricing and the various product offerings of the firm. The firm should also have Facebook in pages where the web address of the firm is indicated and the interested consumers can click and visit the website (Thatcher, 2006). 4.3 Benchmarking the competition The hypothetical firm 2 which employs Facebook advertising uses free gifts and giveaway rates to the consumers who like their profile and follow it up with actual purchase. This is an area that the firm must consider if it is to significantly increase the level of their brand awareness in the highly competitive market place. The firm should develop its banners better than those of firm 3, so that the click can be greater than those currently being experienced. The firm can also capitalise of the leverage point of firm 1; where the firm is able to reach a high number of consumers at lower costs. All of the three competitors of the firm seek to reduce their overall costs, especially those that they use in the advertisement, thus the firm must also device ways through which it can significantly reduce its own costs. Finally, all the competitors of the firm use targeted marketing to reach their customers. Motel is therefore able to use methodologies such as use of Facebook advertising, carrying out of customer survey and the monitoring of the browsing histories of the customers to know their preferences (Barrows and Powers, 2009). Figure showing ROI in using the three media High ROI Medium ROI Low ROI Facebook ads 29.70% 51.50% 18.80% Banner 7.60% 49.70% 42.70% Email marketing 23.40% 48.60% 27.90% Source: Author generated From the data, it can be established that the use of Facebook ads has a high returns on investment as compared to Banner ads which are least effective and email advertisement which is moderately effective. Firms should therefore strive to incorporate Facebook ads in their e-advertisements. 4.4 A list of functions The firm will need to undertake a variety of functions to redevelop the website of the firm. i. Reduction of the weight of the graphics to allow ease of loading; ii. FAQs section will be developed in the website; iii. Banners prompting the users to share the contents over their Facebook networks will also be incorporated into the website. iv. An email sending capability will be added to the website; v. User comments section will also be developed to allow for ease of feedback. 5.0 Conclusion Motel is operating in an industry that has a very high level of competition thus there is a growing need for the firm to increase its competitive advantage over the competitor if it’s to have any significant revenue levels. This calls for the redevelopment of the website of the firm to incorporate other elements which will help the firm to be well established in the minds of the consumers. The changes that have been proposed include; the incorporation of the elements such as banners, email generation capability and the introduction of banners, both in the website and in other websites such as Facebook.com to be able to increase the ability of the firm to be seen by the potential consumers. Bibliography Barrows, C. and Powers, T. 2009, Introduction to the hospitality industry, Hoboken, N.J.: John Wiley & Sons Brotherton, B. 2000, An introduction to the UK hospitality industry: a comparative approach, Oxford: Butterworth-Heinemann Brown, B. 2011, How to use the Internet to advertise, promote, and market your business or website- with little or no money, Ocala, Fla.: Atlantic Pub. Group Canzer, B. 2006, E-business: strategic thinking and practice, Boston: Houghton Mifflin Goodman, A. 2009, Winning results with Google AdWords, New York: McGraw-Hill Jenkins, M., and McDonald, M. 1996, "Market segmentation: organisational archetypes and research agendas", European Journal of Marketing, 31(1): 17–32 Kandampully, C., Mok, C. and Sparks, B. 2001, Service quality management in hospitality, tourism, and leisure, New York: Routledge Kurtz, D. and Boone, L. 2010, Contemporary business, Hoboken, N.J.: Wiley Longenecker, J., Moore, C. and Palich, L. 2006, Small business management: an entrepreneurial emphasis, Mason, Ohio: Thomson/South-Western Napier, H. 2006, Creating a winning E-business, Boston, MA: Thomson Course Technology Plummer, J. 2007, The online advertising playbook: proven strategies and tested tactics from the Advertising Research Foundation, Hoboken, N.J.: Wiley, cop. Rebernik, M. and Bradac, B. n.d., Idea evaluation methods and techniques [online] Accessed 19 January 2012 Reid, R. and Bojanic, D. 2009, Hospitality marketing management, Hoboken, N.J.: John Wiley & Sons Thatcher, J. 2006, Web accessibility: web standards and regulatory compliance, Berkeley, CA: Springer-Verlag Schneider, G. 2011, Electronic commerce, Boston, MA: Cengage Learning Shim, J. 2000, The international handbook of electronic commerce, Chicago: Glenlake Publ. Shimp, T. 2010, Advertising, promotion, and other aspects of integrated marketing communications, Mason, Ohio: South-Western Cengage Weinstein, A. 1994, Market Segmentation, Chicago: Probus Publishing Zarrella, D. and Zarrella, A. 2011, The Facebook marketing book, Sebastopol, Calif.: O'Reilly