Cross Country Inn

Marketing Plan

Group 35

Marketing 202

March 11, 2002

Table of Contents

Group 35 Marketing Plan

Cross Country Inn

Marketing Summary………………………………………………………...Page 1
Current Situation……………………………………………………………Pages 2-5
Environmental Analysis…………………………………………………….Pages 2-4
Company SWOT…………………………………………………………….Pages 4-5
Target Markets………………………………………………………………Pages 6-7
Size……………………………………………………………………………Page 6
Buying Power……………………………………………………………….. Pages 6
Needs…………………………………………………………………………Pages 6-7
Objectives……………………………………………………………………Pages 7-10
Marketing Mix………………………………………………………………Pages 10-13
Product Considerations…………………………………………………….Pages 10-12
Distribution Plan……………………………………………………………Pages 12
Promotion Overview……………………………………………………….Pages 12-13
Pricing Structure…………………………………………………………...Pages 13
Conclusion…………………………………………………………………..Page 13
Bibliography…………………………………………………………………Page 14

Executive Summary

Overview

Our group intends to provide an affordable and comfortable lodging option for the Athens area. In accomplishing this task we intend to purchase and extensively renovate the existing Days Inn building. So that we may provide the exact service and amenities that Cross Country Inns across the Midwest possess.

Marketing Environment

The Cross Country Inn will be technologically advanced within the economy hotel market so that it can compete, yet also provide the economy with a substantial financial contribution. The establishment will not only provide jobs but also make a tremendous effort to be involved throughout the community. The new hotel will also create a competitive environment amongst the industry so that it may supply the customer with an alternative option within the hotel/motel market.

SWOT Analysis

Cross Country Inn takes pride in itself through providing the cleanest rooms available, and is sure to be economically priced for the cost-conscience traveler. The company recognizes that visitors to the Athens area seek quality affordable lodging. The recent downturn in the economy has caused reanalyzing amongst travelers, and directly influences the down sizing of travelers to all areas including Athens. However special events that take place at Ohio University in Athens will provide adequate opportunities for the hotel to fill vacancies. Cross Country Inn must capitalize on these opportunities.

Target Market

The main focus of the target market for the Cross Country Inn includes all those visitors associated with Ohio University; including parents, alumni, and visiting schools athletic teams. The secondary focus will be tourist traveling to Athens, and the final group will be visiting construction workers.

Objectives

The main objectives are to capture 30% of the market share, attaining a 65% occupancy ratio during the week, 90% during the weekend, and reaching 70-80% of our target market through vast forms of advertising. In order maintain these objectives, the intent is to purchase an existing building, renovate, and staff it with 12 full-time employees. Through good service and advertising we will achieve an increase in occupancy.

Marketing Mix

The new Cross Country Inn’s intent is to provide the cleanest most accommodating hotel with various amenities for our customer. Also to distribute these services to the best of our ability and to promote our cleanliness and low pricing of $75 nights and $90 weekends, so that it will exceed the expectations of the industry.

Marketing Environment

Economic Environment

According to The Ohio Division of Travel and Tourism and Longwoods International, total visitor spending in year 2000 for Ohio was $25.7 billion. This figure is down from the 1999 figure of $27.1 billion. According to the Travel Industry Association of America’s Statistics, Ohio will return its current tourism spending levels for fiscal years of 2002 and 2003. $2.7 billion of which comes from accommodations, based on surveys mailed to 2,300 households in Ohio’s advertising markets (www.ohiotravel.org).

Technological Environment

Advancements in Internet technology enable businesses to vastly advertise. It also assists in the accessibility to the firm providing information on reservation availability, the specific establishment, and also aiding in communication between the customer and provider. Providing data ports in hotel rooms is beginning to become the norm, so that the Internet is easily accessible for the customer especially those business-oriented. Fax and copy machine accessibility are a must for customers in the hotel/motel industry.

Advancements in technology can also provide better security devices for all aspects of the company. Electronically coded key-cards are replacing the traditional metal key as room entry devices. The codes that are installed within the keys to access the doors can be easily changed if one is misplaced. Cameras are also being installed in parking areas as well as in hotel lobbies for security purposes (www.crimedoctor.com). As the array of technological advances continues the hotel/motel industry will continue to be affected.

Social-Cultural Environment

Within Athens County, our organization can provide not only jobs directly within the business, but also throughout all of the expected renovations. “Every dollar travelers spend in the county creates a ripple effect of economic activity as it re-circulates in the local economy,” said Sally Dunker, executive director of the Athens County Convention and Visitors Bureau, after discussing the $34.8 million income and $2.3 million in state taxes generated by visitors into the county in 1998 (Smith, 1999).

We intend to create a family-friendly/ethnic sensitive environment for all of our consumers, within our market society.

Competitive Environment

Within the Economy Hotel market, our hotel will face minor competition with Budget Host Coach Inn, Budget Inn, and Super 8. We will easily be able to compete with their room pricing and provide the same, if not better, service and amenities. Our major competitor within our economy hotel market region will be the AmeriHost Inn.

The Amerihost is much closer to campus then the Cross Country Inn and currently offers amenities that we do not. The Amerihost offers an indoor pool, whirlpools, and an exercise facility. Their building contains 40 more rooms than ours, and also provides the luxury of a meeting/banquet facility. In addition each room is supplied with data ports.

The Amerihost also not only provides the luxury of whirlpools outside the rooms, but also accommodates rooms that contain whirlpools within them. These “executive whirlpool rooms” however are non-smoking and range in the $139.99-$199.99 price range. Though, both Smoking and Non-smoking rooms are available for the king and double size rooms. The king bedrooms, as well as the executive rooms, include refrigerators and microwaves. These rooms range from the $94.99-$144.99 price range.

Though the doubles do not contain these few luxuries, they do contain every other amenity that the king’s do including TVs, tea/coffeemakers, hair dryers, clock radios, and safe deposit boxes. The doubles range from the $89.99-$139.99 price range. Other personal consumer services the Amerihost provides are children under 18 stay free, provided cribs, and a dry cleaning/laundry service. They also offer 24-hour front desk service, free parking, and express checkout (Places to Stay.com).

Though our facility is currently not able to provide many of these services, our newly renovated Cross-Country Inn will be able to significantly compete with the Amerihost. We will install our signature drive-thru check-in and checkout service to compete within our target market and provide 24-hour desk service. This will allow the customer to check in/out more readily and easily. We are installing data ports in each room so that all customers will be able to access the Internet. The newly renovated hotel will contain a new meeting room and a small workout facility.

We choose not to compete with the executive rooms of the Amerihost. However, we will provide the similar services within our rooms including, TVs, Tea/Coffeemakers, Hair Dryers, iron and ironing boards, and clock radios. The Cross Country Inn will provide both smoking and non-smoking rooms. The hotel will also offer the services of Children under the age of 18 staying free, complimentary cribs and bedding, and free parking. The Cross Country Inn will be able to successively compete within our market with prices ranging from the $70-$90 range.

Our only other competition is outside our market and that is the Ohio University Inn and Conference Center. It is the only full service hotel in southeastern Ohio (http:// areaguides.net). It will take the majority of upper-class customers away from our business, but because they are outside our market they are not a main focus.

SWOT Analysis

Strengths

Cross Country Inn prides itself in providing the cleanest rooms available that are also economically priced for each visitor. Customers value a clean and comfortable room that is priced affordably. Many other hotels can only offer one or the other but Cross Country Inn is able to easily provide both.

All Cross Country Inns are franchised, which enables each franchisee to oversee all operations of the hotel and make any attempt to serve the customer better. The staff at every hotel is friendly and is willing to make the customer’s stay as comfortable as possible.

The external strengths of the company include the high demand for affordable lodging in many areas of Ohio, Michigan, and Kentucky. Due to the recent downturn in the economy those who are traveling are looking for me economically priced lodging that is convenient to the area they are visiting.

Cross Country Inn is dedicated to staying at the forefront of technology by offering their customers many high-tech features. The online reservation system allows a customer to go the Cross Country Inn website to make a reservation at any of their hotel locations. The online system also gives a guest the ability to view or cancel an existing reservation. Cross Country Inn also provides a data port for any guest needing to access the Internet.

Weaknesses

Cross Country Inn is a small, privately-owned hotel chain currently with 24 locations serving Ohio, Kentucky, and Michigan. The chain is smaller than most so it is difficult for it to have the strong financial resources that many other large hotel chains have. The company and franchise owners must budget their resources properly in order to maintain a profitable business.

The external weaknesses of Cross Country Inn are primarily affected by the recent downturn in the economy. Today’s travelers now have smaller budgets and are more cost-conscious when choosing somewhere to stay. This not only affects Cross Country Inn but also other hotels as well.

Tourism in the Athens area is very minimal. The main attraction of Athens is Ohio University. Because of this narrowed range of visitors coming to the area the hotel only has a small amount of customers to target. There are on and off-peak seasons in which the hotels in and around Athens see little business.

Opportunities

Ohio University has a variety of special weekends where the number of visitors to the area creates a high demand for hotel rooms. Special university events weekends including Sibling’s, Dad’s, Mom’s, and Parents’ Weekends and other events such as Halloween, homecoming, and graduation draw a large amount of visitors to Athens. Even with the number of hotels in the area many visitors are still forced to stay in hotels outside of the Athens area.

Currently there are eight hotel options to choose from around Athens. This creates a lack of choices to and rooms to stay in when visiting Athens. Hotels such as the Sunset Inn and The Highlander Inn are the only hotels that provide a choice for the budget traveler. These hotels do not provide the cleanest and most comfortable hotel rooms. A Cross Country Inn Hotel would provide a price-conscious consumer with an affordable and inviting room to stay.

Threats

Cross Country Inn is dealing with a limited target market in the Athens area. Most other Cross Country Inns have been able to draw from a large amount of guests from the visitors frequenting the area. There is a relatively small amount of people that travel to the Athens area and plan to stay the night. Many of those visiting are often only traveling from a few hours away allowing them return back after their trip.

The fact that Athens is a college town hurts the hotel industry. The town thrives during the eight months that classes are in session. The other four months when students are back home away from Athens could seriously hurt the business of a hotel. Cross Country Inn would have to prepare for this yearly downturn in business and would have to tailor its operations to fit these tendencies.

The financial costs of starting a new business including employee salaries, operation costs, advertising costs, and many other costs associated with doing business begin to add up quickly when a business first opens. The successfulness of a Cross Country Inn in Athens is not a guarantee for the company. The investment involves a serious risk to the investors. Each investor must carefully way their options when considering this endeavor.

Target Market

In order to have a successful marketing plan, the first thing that needs to occur is identifying a target market. Once this market has been identified, you need to analyze them and create a marketing mix that will keep them satisfied by fulfilling their needs and wants. For this to occur positively, the organization must work together as a team.

Target Market Demographics

By bringing a new hotel to the Athens area, there are many factors that need to be considered. Certain components of demographics, psychographics, and geographics must be focused on when identifying the target. These factors include age, income, occupation, and lifestyle.

Our main focus for the Cross Country Inn will be those associated with Ohio University including parents, alumni and visiting athletic teams. The city of Athens is centered around the University, and is not a prime location where many business entrepreneurs will be traveling through, so it is not necessary to include them in the target market.

During the year prospective Ohio University and also current Ohio University students will have parents in town to visit the campus. The parents will need an affordable yet comfortable place to stay for the weekend. Some needs they may have include in-room telephone usage, cable television, continental breakfast, and friendly service. The age of these parents usually ranges from 40 to 60.

There will also be alumni in town to visit. These alumni might come in town for special-event weekends. They will generally range in age anywhere from 25 to 50. Since there are competing hotels in town, it may be necessary to raise the rates on these special-event weekends. It is more than likely that alumni will pay any price to get a room.

Another group that should be taken into consideration is visiting athletic teams. Ohio University is part of the Mid American Conference, which includes twelve teams scattered throughout Ohio, and also located in states such as Indiana, Michigan and West Virginia. When there are two-day events such as swim meets, wrestling tournaments and baseball and softball double-headers there must be enough hotel accommodations for all participating teams.

These teams would want some sort of discount rate for how many rooms they will be requesting. They also may want internet access available in the rooms, and possibly, and exercise type workout room.

Our next focus will be tourist. Though, Athens is not a big town for tourism, you do have your occasional groups traveling through. Athens County has many great tourist

attractions including art galleries, many seasonal festivals, numerous state parks, and some great historical sites. With these attractions in town, we will need to provide hotel lodging for those who are staying for a few days at a time.

Finally, we will take construction into consideration with our target market. Athens is always building and there will always be construction going on throughout the town. With the new restaurants and Wal-Mart moving in on State Street, there are many construction workers who must relocate for weeks at a time. These workers need somewhere to stay when they are working in the area.

Conclusion

In conclusion, the target market for the Cross-Country Inn has a broad range. You must always consider the disabled in your target market. The hotel must meet the needs of everyone. By fulfilling the targets needs, we will have a sound marketing mix and marketing plan.

Objectives

Introduction

The following are our objectives, the steps we intend to take to achieve them, and the way in which they are measured. We have decided to represent our objectives quarterly. Our success will be measured according to four standards including market share, the percentage of rooms that are occupied during the week, the percentage of rooms that are occupied on the weekend, and the percentage of our target market that we have reached with our advertising.

Our first goal before beginning operation is to obtain a suitable building with which we can provide our service. We have chosen to acquire an existing building and renovate it. The Days Inn will be purchased from Frank E. Peirsol and Co. Realty for $1,800,000. The existing building has 60 rooms but does not contain an exercise facility, a meeting room, or the necessary facilities for drive thru check out. The building also needs general restoration, a new parking lot, and the addition of internet access to fit our needs. As a result we will renovate the building at the cost of $500,000.

The second order of business is staffing our establishment. In order to clean the 60 rooms three teams of two maids will need to work 30 hours a week costing a total of $56,160. To maintain the desk on a constant basis we will need 4 receptionists working a total of 168 hours at an annual cost of $74,256. For our maintenance needs we will

employ one maintenance man for 40 hours a week at an annual cost of $20,800. Finally we will need a manager on duty between 40 and 50 hours a week who will be salaried at $30,000 a year.

Quarter 1

Following the necessary renovations and staffing issues we expect to gain a 10 % market share in the first quarter of operation. This will be achieved through our advertising as well as our introductory flat rate of $75 a night for weekends and weekdays. We expect to achieve a 25% room occupancy rate during the week and 35% on the weekends (see table on next page). These numbers are relatively modest and can be reached with a small amount of advertising. We expect to reach at least 35% of our target market in the first quarter with our mailing and our billboard on route 33.

Quarter 2

In the second quarter we hope to achieve 20% market share. This will be achieved through continued exposure and the traffic caused by our low introductory prices. The weekend price will be raised to $90. We believe this price is reasonable considering our upgrades and the demand that is present for lodging in Athens on the weekends. We expect to fill 35% of our rooms during the week and at the lowest 45% on a non event weekend. As a result of continued mailers and flyers in the dorms we should be able to reach 50% of our target by the end of the second quarter (see table on next page).

Quarter 3

We hope to continue to increase our market share to 25% in the third quarter. This will be possible as result of continued good service as well as our advertising strategy. We hope to improve occupancy to 45% during the week and 65% on a normal weekend. These numbers are realistic compared to the 75-90% reported by the competition. Visiting professors and parents will appreciate the clean environment and reasonable pricing and by the third quarter we should have reached about 60% of our target market through our various ads and flyers (see table on next page).

Quarter 4

By the final quarter of our first year in business we hope to have reached 70 to 80% of our target market through our advertising and through word of mouth. Having reached that amount of our target we expect to fill 65% of our rooms during the week and 90% on weekends. Between special events and normal traffic these numbers should be easily attainable. We hope to improve our market share to 30% and continue to hold at these levels through continued good service and customer satisfaction (see table on next page).

Quarter 1	Rooms	Price	Amount	% Occupied	Days	Gross Revenue
Weekday	60	$75.00	$4,500.00	25.00%	5	$5,625.00
Weekend	60	$75.00	$4,500.00	35.00%	2	$3,150.00
					Total	$8,775.00

Quarter 2	Rooms	Price	Amount	% Occupied	Days	Gross Revenue
Weekday	60	$75.00	$4,500.00	35.00%	5	$7,875.00
Weekend	60	$90.00	$5,400.00	45.00%	2	$4,860.00
					Total	$12,735.00

Quarter 3	Rooms	Price	Amount	% Occupied	Days	Gross Revenue
Weekday	60	$75.00	$4,500.00	45.00%	5	$10,125.00
Weekend	60	$90.00	$5,400.00	65.00%	2	$7,020.00
					Total	$17,145.00

Quarter 4	Rooms	Price	Amount	% Occupied	Days	Gross Revenue
Weekday	60	$75.00	$4,500.00	65.00%	5	$14,625.00
Weekend	60	$90.00	$5,400.00	85.00%	2	$9,180.00
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