How Differentiation Will Make Spring Motel Successful

How Differentiation Will Make Spring Motel Successful

Instructions/Descriptions

How Differentiation Will Make Spring Motel Successful

Lawrence Ward

MGMT 3850

Prof. Sexton

10/11/2019

How Differentiation Will Make Spring Motel Successful

Introduction

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The goal of this upcoming motel business is to be a successful one that will merge as one of the best service providers in the industry. Therefore, will purchase an infrastructure located in the outskirt of Dallas in Corinth and reestablish it to be a successful investment in the industry named Spring Motel. After choosing differentiation as a Porter’s Generic Model of Competition, this motel is to lead by offering high quality products and services to the customers. The motel is priced at $ 1.5 million and has 150 units to rent out. The dominating motels in the city, Irving, Garland, and Mesquite are offering good quality accommodation services, but there are some loopholes they have not yet been covered. This is where the idea of my business comes in. The big competitors are not taking advantage of the attraction sites in the outskirt of the city. Most of them are located closer to the center of the city, making their services even more expensive to the customers.

Target market

Spring Motel will take advantage of the foreign tourists who come to the city. These will be people who come for business meetings, as well as those who come for vacation holidays. The city expects about 27,000,000 foreign tourists every year, with the population being high during the summers (VisitDallas, 2019). Also, these will be customers who will want quality accommodation, with good deals and packages, to justify their expenses.

Customers’ motivation

One of the reasons that will motivate our target clients to buy our accommodation services is that we will provide value for the amount they pay. The big motels in the city offer quality service but do not meet satisfaction. At Spring Motel, we are located a few miles away from Golden Triangle Mall and Music City Mall, near lots of food and gas stations like Buckees, and close to Lewisville lake. Therefore, our customers will get to enjoy these beautiful sceneries, and conveniences.

Market size

There is a big population in the industry to attract. The visitors to the city are about 27,000,000 tourists. This size will need good quality accommodation services including technology to back them up. Dallas is also growing to be one of the largest metropolitans in the nation, and the number is expected to rise shortly.

Personal selling efforts

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The main persons entitled to the sales are the manager, front desk person, and social media experts. They will be involved with the follow-up customers through telephone and will not be directly involved in sales and promotion. We will be outsourcing out promotion’s services to digital marketing agencies, as well as web developers to ensure that we have a successful website. The company will spend $ 200,000 annually on sales.

Advertising and promotion

Most of the advertisements will be done through online tactics like social media. We will also use bogs and websites to reach out to our esteem customers. The traditional promotional tactics like the use of billboard will also be used to attract local tourists. Also, we will be using questioners to get more clients, both online and locally. This will be including in the 200,000 spent on sales and promotions.

Pricing

The structure that will be established as Spring Motel is priced at 1.5 million dollars. It will be an upcoming motel, known for combining technology and good customer care in the provision of accommodation service. The average motel costs between $45.00 and $100.00, depending on location and demand (Victor, 2019). However, Spring Motel will provide its accommodations at $ 45. There will be free breakfast for those who spend the night, beside the gym. Therefore, in a year, Spring motel is expected to make $ 1.16 million per year as gross profit. This means that its possible to make some revenue and compete with the big motel competitiors.

Survey to target client

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What packages and deals will you be interested in a hotel?

Do you need Wi-Fi in your hotel room?

How do you want your breakfast served when you spend a night in our hotel?

Rate the need to have a gym in a hotel

Do you like to have an animal farm in the hotel?

Do you like to have a view of the sea from your hotel window?

Calculation of gross profit (per year)

Expenses

Payment of loans (per year) 2.5 million/ 10 years

250,000

Sales and promotion 200,000

Renovation and repairs 150,000

Payment of staff 500,000

Miscellaneous 200000

Total 1,300,000

Income

45 x 150 x 365 2.46 million

Gross profit 1,16 million

Work: GP= Income-total exp.

GP= 2.46 – 1.3

=1.16 million

References

A Hotel Boom Comes to Texas. (2019). Retrieved 11 October 2019, from https://www.nytimes.com/2017/03/20/business/texas-hotels-dallas-houston-austin.html

Victor, V. (2019). Cheap Motel Chains in USA Ideal for a Road Trip – [2019]. Retrieved 11 October 2019, from https://www.travelinglifestyle.net/cheap-motel-chains-usa-ideal-road-trip/

VIsitDallas. (2019). Retrieved 11 October 2019, from https://www.visitdallas.com/about/mission-and-impact/index.html

How Differentiation Will Make Spring Motel Successful

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