SALES & MARKETING PLAN (For 2011 2012)

THE IMAGERY HOTEL,

XYZ CITY, INDIA
The presented sales and marketing plan has been worked upon while covering the
theoretical knowledge gained during the duration of module. The sales and marketing
plan covers only the rooms division strategy due to word count limitation (Revenue
aspects such as Food & Beverage outlets, other revenue etc are not being discussed).
Glossary at the end of appendices features the key industry specific terms used in the
plan.
Executive summary
The Imagery hotel is an established luxury hotel located in the XYZ city of India. The
hotel is part of a renowned chain of hotel. The hotel has been an industry leader in the
city since its inception in 1991.
The hotel follows the objectives that are consistent with the companys goals and mission
statement. In the year 2011, The Imagery Hotel is targeted to contribute sales revenue of
INR 165 Million against a projection of INR 140 Million. The Imagery Hotel, has to
further maintain its market leadership in the city by achieving the highest RevPAR
Premium.
The marketing plan addresses following major attributes:
Growing need to increase the high rated businesses
Increasing the market share
Segment wise in depth analysis to gain competitors business
Channel wise in depth analysis to gain competitors business
Laying down the processes to ensure the customer is satisfied
Introduction
The Imagery hotel located in XYZ city offers breathtaking views of the sea perched on
the shore of Bay of Bengal. Imagery hotel is a part of renowned hotel chain of India that
has been a domestic market leader closely competing with 2 more major players. The
brand recall among the travelers is high and customer perception is of high service
standards at a high price.
Imagery is the first five star hotel to have appeared in the city in year 1991 followed by
two additional competitors following similar price guidelines and similar room
occupancy patterns.

Current Product Offerings

The Imagery hotel is a well known 95 rooms small high end hotelthat not only provides
accommodation facilities to its guests but also a host of other services such as food and
beverage (One Chinese Specialty restaurant, one coffee shop and one bar), spa,
healthclub, pool, massage etc. 65% of the revenue share is contributed by the room
division sales. All the rooms in the hotel have recently been refurbished and the
technologies have been upgraded to ensure a better guest satisfaction on the product
front.
The Physical Product Ansoffs product growth matrix in appendix 2 indicates the
hotel to increase the market penetration. While considering the GE portfolio matrix (As
appended in Appendix 2), we should hold our position by holding onto the current share
and margins. In order to defend our share, following strategies can be applied:
Maintaining the customer value
Maintaining the market communication
Continuous product improvement
The Brand The brand of The Imagery Hotel is well established and gives a high end
luxury perception in the market. The parent chain of The Imagery Hotel uses House
Branding strategy.

Business Market, trends and expected future

City XYZ, located on the eastern coast, is a tier 2 city of India. It is a major centre for IT
support, Defense, Shipping, Logistics, Exports and heavy engineering industries with a
large sea port. The city also serves as a major transit point for the smaller industrial
locations and set ups around the area and is about to witness a flurry in hotel development
with one additional 5 star hotel aiming to open by the 2nd quarter of 2011 and another two
big hotel projects to be operational by mid of 2012.
Taking in account the past data, domestic feeder markets to the city are Chennai,
Mumbai, Delhi, Hyderabad and Kolkata. Internationally, Russia, Spain, Italy and China,
are the major feeder markets. The recent economic meltdown affected all these countries
and thus the business in the sectors like IT support, Logistics and Shipping was affected.
However, the hotels managed to sustain due to an increase in the visitors working on the
long term government projects. This however, decreased the hotel ARRs due to lower
entitlement of these visitors (As declared by the government). Imagery hotel believes that
since hotel accommodation service is highly perishable with a shelf life of just one day, it
needs to be sold at the highest possible rate for the day, thus it chose to accept the lower
rated government businesses in order to accommodate for the lost chunk from higher
paying sectors such as IT support, Shipping etc and attained market leadership in the city.
Appendix 3 refers to the past performance of the city hotels and industry trends. The city
occupancies have dropped by 15% over the period of last one year due to economic
instability. In order to sustain, hotels were forced to reduce their prices and thus ARRs

decreased by 10%. An overall decrease of 25% has been cited in room revenues in the
city. Imagery hotel has shown a 17% increase in its RevPAR Premium owing to
following factors:
Imagery hotel decreased ARR by 19% in order to achieve 4% increase in the
market share.
Competitor 1 losing 25% of its market share because of its reluctance in
compromising with the rates (Competitor 1 has increased its ARR by 8% over the
Last year).
Least degrowth in room revenues of Imagery hotel.
Gaining the competitor 1s business (Increased by 18%)
With a bumpy economic improvement in EU and an uncertain future of USA (IMF,
2010), the imagery hotel will have to continue with the last years strategy. During the
economic downturn, the potential of government sector did not suffer (as per the past
records available with the hotel). The sector kept contributing 128 rpd in the city (64% of
the total business for 5 star hotels) in the year 2010.
New projects (Majority of them being government backed) in the city is expected
increase the footfalls in XYZ city thus generating an increased demand as compared
Last Year (The data collated from various market sources Various MNCs, SMEs
industry development authorities of the state.). Data shows an upward movement
RPDs from 200 in 2009 to 300 in 2010. From the data collected, the 300 footfalls
expected to increase to 375 in 2011.

to
to
&
in
is

By 2nd quarter of 2012, however, ABC hotel will open up to add up another 120 room
inventory (Increasing the available city supply from 260 rooms to 385 rooms). As per the
calculation the overall occupancy percentage may go up by 1.2%. The addition of fresh
inventory will allow end user to witness a better playground of bargaining. As a result,
while 1st quarter will show a consistent upward trend in city ARR, it will start falling with
the advent of 2nd quarter. Hotels will thus have to strive & increase as much revenue as
the possible in the 1st quarter itself in order to fill up the deficit that may arise from 2 nd
Quarter of 2011 onwards.
Environment
The current environment in the city seems to be highly volatile with following forces
changing the market dynamics on an uncertain basis:
Political Environment The current state of politics in the state is highly
unstable with a group of politicians working in order to get the region passed as a
separate state. In such a case, there might be instances of MNEs pulling off their
investments around the city affecting the hotel business adversely. However, on
contrary, since the city will gain a reputation of state capital, it may attract further
investment thus generating business for hotels. The matter is unpredictable and
makes the future highly uncertain.

Economical Environment The regional economy is going through the ripples

of economic instability of EU and USA and affecting the business as discussed
initially.
Social Environment The parent hotel chain is run by a trust under a bigger
brand. The trust believes in social causes and donates a part of Profit into a charity
that helps the victims of any terrorist attack across the world.
Technological Environment Continuous improvements and technological
enhancements call for a need of constant updating in order to maintain the product
superiority over competition.
Legal Environment With an unpredictable political future, the legal
environment also is subjected to controversy since new legislative regulations will
come into play ones the verdict is given by the government.
Ecological Environment The hotel has acquired various initiatives for
sustainability. Some of these are waste reduction, reusing and recycling, constant
monitoring of gas, oil and electricity usage etc.

The environmental factors can further be explained on the basis of Porters five forces
model in the appendix 4.

SWOT Analysis
Imagery hotel, on one hand has various advantages to its side that it can leverage to its
advantage, while on other hand; it has some disadvantages that need to be looked into.
The SWOT analysis below will discuss the same.

Market overview
Imagery hotel currently has six well defined market segments with eight subsegments as
shown in the model below:

Figure 1
Each of the market segment has been coded (Codes are mentioned next to each segment)
for an ease of reference at later stages. The structure of the past segment mix for
competition was also made in year 2010 2011 based on the market feedback, resident
guest feedback, taking information from competition employees, our own employees and
meeting competition guests on various occasions. The data was then verified with the
market figures being shared on a regular basis to prove the genuineness of figures.
Following graphs give a segment mix of the competitive set in the city in terms of
occupancy level contribution and revenue contribution.

Figure 2
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Sales and Distribution

The segments as mentioned above utilize our services from the following distribution
channels (Please refer to segment codes in Market Overview):

Figure 3
Mission, Direction and Objectives
The parent companys vision is to operate 30,000 hotel rooms in 30 major destinations
across the globe to earn a group turnover of 2 billion USD and to maintain market
dominance in each of the locations.
In line with the parent companies vision, The Imagery hotel follows following objectives:
Financial Objective: To achieve the budgeted revenues of INR 165 Million for the
financial year 2011 2012
Competitive Objective: To achieve the market dominance by achieving the
highest RevPAR premium in the competitive set.
Targeting and Positioning Decisions
Referring the market overview section (Figure 2), our targeting and positioning should be
based on different strategies depending on the market segment, viz:
Corporates: Since corporate market segment contributes maximum share to the
revenues (55%) and has the highest paying capacity, hotel should continue to
retain its share. Another notable aspect is the historical data that shows the paying
capacity is higher in Non Negotiated Territory Accounts and Negotiated National
Accounts is higher in comparison to Negotiated Territory accounts. So the efforts
should be more concentrated on the earlier 2 subsets. The segment contributes
maximum on weekdays (i.e. Monday to Friday). Competitor 1 has traded off this

segment with groups since the location of the competitor gives it an advantage to
attract leisure groups to fill up on the weekends. The competitor 2 has traded this
segment with Long stay.
Long Stay: The imagery hotel has taken a conscious decision to use this segment
as filler so that the gap created by corporates on weekends can be traded off with
this segment. In case of Imagery hotel, this segment contributes to 35%
occupancy share but only 20% revenue share. There is a huge gap evident in this
case when this figure is compared to the competition figures. Competition hotels
seem to have customers who are paying comparatively more to them. The reason
of the same could be our historical data that shows we do not receive support
from Negotiated National Accounts sub segment. This segment has higher paying
capacity and our reports confirm their usage of competitors. The field sales team
will play a major role in identifying the competitor customers in this segment.
Conferences: The imagery hotel has maintained highest share from the
conferences due to the largest conference hall that the hotel built two years ago
within its premises. Since the hotel has largest conference hall, it charges a
premium to the guests attending the conference and using its accommodation
facilities. This segment contributes to 15% to occupancy and 15% to the revenue
of The Imagery hotel. The strategy of charging slight premium to this segment
will be continued.
Groups: Since Imagery hotel is a business hotel, the share of groups is lower it.
The highest share for Groups is for Competitor 1 due to its location advantage
(Located on the beach). It will be wise not to disturb that segment from
competition since The Imagery Hotel is not fully equipped to provide a beach
resort experience. However, the plans could be taken up by the corporate office at
a later stage to revamp the facilities and connect the hotel directly to one of the
close by beaches.
Events: The XYZ city due to its size is not able to attract a lot of events. This is
evident in the overall city performance as well. Being a competitive product in
terms of brand value and domestic recognition, Imagery hotel can continue
charging a premium to this segment.
Crew/ Layover: City XYZ does not have any crew base due to its size and
location.

Product and Brand Decisions

Product Marketing Decisions The Imagery Hotel offers distinct product with
exclusive service levels. Renovation and product upgrade was finished in the 2010. In the
forthcoming year, the hotel plans to promote its product by its improved interiors and
established service levels. Following aspects will be covered:
Theme of advertisement and media releases will focus on upgrades done at the
hotel. Concentration will be on print media.
Printing of new brochures to be distributed across the hotels in the chain, sales
offices and to be handed over to the major business sources.

Organizing familiarization trip for sales office employees working in different

locations and major business sources in order to showcase the actual product
offering

Brand Marketing Decision Brand value enhancement to be undertaken in line with the
corporate marketing strategy. Owing to renovation and product upgrading, brand value
can be revamped this year to maximize the room revenue. On a local level, the hotel will
get associated with the high end exclusive shopping arcades, monthly magazines etc for
joint promotional activities.
Pricing Decisions
In line with the overall company strategy, The Imagery Hotel plans for 10% increase in
published tariff. The expected published tariff is attached in Appendix 5. It also carries
the pricing template to be followed in order to load rates on all the channels. For
corporate rate negotiations, rate tie up negotiation guidelines are also given in Appendix
5. The hotel has prepared an expected demand calendar that considers the past occupancy
trends and future Business on Books. Accordingly, dynamic discounted price (Rate of the
Day) has been set against each day of the year. The rates are to be loaded on the system
and will be visible on all the distribution channels simultaneously. These rates can be
changed by the hotel as and when required.
Channel Decisions
Figure 3 shows the distribution system of The Imagery Hotel. As per historical data,
maximum revenue for the city hotels is achieved from reservations offices, sales offices
and electronic channels (GDS Channels). The Imagery Hotel will attain a strong channel
support by concentrating on following aspects:
Sales Offices: Sales blitz to the domestic feeder markets to be done by the hotel
sales team. An aggressive push is required from Sales offices to increase the
business. For this, new brochures will be helpful.
GDS Channels: The hotel receives GDS/ Electronic channel booking requests
from Galileo, Sabre, Worldspan and Amadeus. Out of these, Galileo and Amadeus
contribute maximum to the city hotels. In year 2010 The Imagery hotel received a
fair share of 46% from Galileo which is highest in the city, however, there is a
scope of improvement in the Amadeus channel wherein the hotel received only
24% of fair share. In the year 2011, The Imagery Hotel needs to promote itself
more aggressively on Amadeus by joint marketing programs and tie ups, online
virtual store and channel advertising.

Marketing Communications Decisions

Advertising: Advertisements to appear in print media in feeder markets.
Advertising this year will concentrate on the enhanced product features which
have been added during the renovation of the hotel.

Public Relations: Press meets will be conducted before every food promotion
and will include all publications from the city. The press meet will also be
conducted in order to showcase the renovated rooms to the general public. Cricket
teams that are scheduled to stay with us in March, June, August and September
will increase the buzz surrounding the hotel.
Sales Promotions: Channel selective sales promotion for Amadeus will be
initiated as earlier discussed. Familiarization Trip is to be arranged for the major
business sources in order to showcase the improved product (As discussed
earlier).
Personal Selling: Sales team will continue to visit the corporate houses and
maintain the relationship with existing users (Retention Accounts) and to flourish
the relationship with the competitor users (Hit Accounts).
Direct Marketing: Reservation department has been given an authorization to go
1 level below the approved Best Available Rate as mentioned on the Demand
Calendar in case they feel the customer is not willing to pay the rate of the day.

Customer Service and Internal Marketing

Customer Feedback System is in place as per the corporate office guidelines. All the
feedback as received is being addressed by the General Manager within 24 hours of
feedback receipt. The practice will continue to be followed. The sales team will send E
Mailers to their respective clients about any new activity taking place in the hotel or is
related to the hotel. The sales team will take customer feedback after the sale and feed it
into the online Customer Feedback System as per the process.
People Decisions
The Imagery hotel attracts a healthy talent pool due to its brand and generous salaries. In
the forthcoming year, employees in direct guest contact especially the once from Front
office and reservations will be authorized to take their own decisions which is discussed
further in the next section.
Process Decisions
In order to make the decision process faster, employees working in the Front Office
Department are authorized to do the following in order to do customer recovery in case of
a complaint:
Charging one slab lower than the Best Available rate of the day.
Including a breakfast/ lunch/ dinner complimentary in the rate
Including a complimentary airport pick up/ drop in the rate.
Including a complimentary fruit basket/ cookies platter in the room.
Marketing Programs
A calendar has been prepared for the marketing activities to be conducted in 2011 and can
be referred to in Appendix 6.

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Forecasts and Financial Details

Budgeted forecasts show room revenue of INR 140 Million for the Financial Year 2011
2012 with an average occupancy rate of 74%.
APPENDIX 1
The 7 Ps Marketing model

The Sales and Marketing plan uses the above 7 P model to attain the objectives as
mentioned in the plan.
APPENDIX 2
Ansoffs Matrix

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The Ansoffs Matrix is showing the current hotel positioning in the market. The product
exists in an already existing market. So the strategy should be of market penetration
GE Portfolio Matrix

The GE Portfolio matrix above shows the positioning of the 3 hotels in the city. The
circles carry the revenue share of each of the hotels. The Imagery Hotel has a very high
competitive edge but located in an unattractive market due to low demand. Thus, as per
GE portfolio matrix, it falls under zone 2, which suggests following strategy (Maximize
profits while maintaining position):

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APPENDIX 3

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APPENDIX 4
PORTERS FIVE FORCES ANALYSIS
Following is an analysis done in order to find the effects of factors on hotel industry in
the city as per Porters 5 forces model:
THREAT OF NEW ENTRANT
Very High - - High - - Moderate - - Low - - Very Low
ENTRY BARRIERS
High capital expenditure and costs

NEW PROJECT ATTRACTIONS

Long term perspective of increase in
demand
Government
efforts
in
creating
attractive environment by tourism
promotion channels
Development of corporate and industry
environment.

High investment recovery time

Political instability in the state
Existence of existing brands with a first
mover advantage

BARGAINING POWER OF BUYERS

Very High - - High - - Moderate - - Low - - Very Low
FACTORS DISCOURAGING THE
CUSTOMER TO BARGAIN
Top end brand perception.
High service delivery standards

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FACTORS ENCOURAGING THE

CUSTOMER TO BARGAIN
Long term business potential
Overall brand usage of the company
(Customer using services at all the

locations)
Superior product standards
Bulk Businesses
Physical location of the hotel In close Size of the company using our service.
proximity to client premises Easy to
commute.
Similar pricing structure of competitive More supply then demand
set
Ease of access to senior management
for feedback. Opportunity to negotiate
effectively in future.
Highly perishable product
THREAT OF SUBSTITUTE
PRODUCTS AND SERVICES (Example Guest houses, alternate accommodation
etc)
Very High - - High - - Moderate - - Low - - Very Low
FACTORS DISCOURAGING
FACTORS ENCOURAGING
SUBSTITUTES
SUBSTITUTES
High service standards
Cost consciousness of consumers
High brand perception
Increase in the transit travel
High levels of security, cleanliness and
staff training
BARGAINING POWER OF SUPPLIERS
Very High - - High - - Moderate - - Low - - Very Low
FACTORS DISCOURAGING
FACTORS ENCOURAGING
SUPPLIER BARGAINING POWER SUPPLIER BARGAINING POWER
Long term relationship
Increasing inflation
Bulk purchasing from suppliers
Flexibility for supplier in order to meet
demands as per fluctuations
More supply then demand
On analyzing the above five factors, we can establish the given diagram on the basis of
Porters Five Forces model.

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APPENDIX 5

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Appendix 6
Marketing Activities Calendar

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Glossary
RPD
ARR

Occupancy

Rooms Sold per day

Also known as ADR is a statistical unit that is often
used in the lodging industry. The number represents
the average rental income per occupied room in a
given time period. ADR along with the property's
occupancy are the foundations for the property's
financial performance. The ADR can be calculated by
dividing the room revenue by the number of rooms
sold (Wikipedia, 2010).
Occupancy is the percentage of available rooms that
were sold during a specified period of time.
Occupancy is calculated by dividing the number of
rooms sold by rooms available (STR Global, 2010).

Competitive set
A competitive set consists of a group of hotels by
which a property can compare itself to the groups
aggregate performance. There must be a minimum of
three hotels in any competitive set and a minimum of
four hotels in Europe, excluding the subject hotel. To
protect proprietary data, a single hotel or brand can
not exceed 40% of the competitive set for North
American hotels and 50% for hotels outside of North
America. A single hotel company (i.e. Marriott brands,
Choice brands, etc.) may only comprise 60 percent of
the competitive set room supply (STR Global, 2010).
Market Share Percentage
Also referred to as Occupancy Penetration Index. An
index designed to measure a hotel's share of the
segment's (comp set, market, tract, etc.) demand
(demand = rooms sold). It is calculated as: (Hotel
Occupancy / Segment Occupancy) x 100 = Occupancy
Index. (STR Global, 2010)
Other Revenue
Includes all other revenue excluding room revenue
and F&B revenue (STR Global, 2010).
RevPAR (Revenue Per Available
Room)
Revenue per Available Room (RevPAR) is the total
guest room revenue divided by the total number of
available rooms. RevPAR differs from ADR because
RevPAR is affected by the amount of unoccupied
available rooms, while ADR shows only the average
rate of rooms actually sold (STR Global, 2010).
RevPAR Premium
Also referred to as RevPAR (Yield) Index. A
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RevPAR (Yield) Index measures a hotels fair market

share of their segments (competitive set, market,
submarket, etc.) revenue per available room. If a hotel
is capturing its fair market share, the index will be
100; if capturing less than its fair market share, a
hotels index will be less than 100; and if capturing
more than its fair market share, a hotels index will be
greater than 100 (STR Global, 2010).
Room Revenue
Total room revenue generated from the sale or rental
of rooms (STR Global, 2010).
Bibliography
International Monetary Fund, 2010. World Economic Outlook 2010, Chapter 2.
Washington DC: International Monetary Fund.
STR Global, 2010. A Guide to our terminology [Online]. Available from
http://www.strglobal.com/Resources/Glossary.aspx#R [Accessed: 1st January 2010]
Wikipedia,
2010.
Average
Daily
Rate
[Online].
Available
http://en.wikipedia.org/wiki/Average_daily_rate [Accessed: 1st January 2011]

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