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    Hotel marketing-plan Hotel marketing-plan Document Transcript

    • H tl reigPa oe Mak tn lnRv riw H tl ieve oeT iiac mp t e a l o amak t gp n Y uaew l met u eti h s o l e x mp f s e e rei l . o r e o o s h n a c sc ne t s g i w e p n i y u o nmak t ga ti s o tn a a u e h n l n g o r w d a n rei cvi . n iteT ce t amak t gp no y u o nt go y u b s e s p a e o rae rei l f o r w o rw o r u i s, l s n a n ec n i r u p p l Mak t gPa Pos f ae L anmoea o s e o r o u r rei l r ot r. e r r t d a n n ww wp l l . m. w .a a oc ot o Ce t amak t gpa ta g t rs l rae rei ln h t es eut n s B ssln s f r. o p wee b D c Tp Mak t g etel g ot e N w o rd y u t a e rei . i wa n “ i listepo e so b i igs p ot g Smpie h rc s f ul n u p rn f d i •F c s nat na drs l ! o u o ci n eut o s d c me tt nfr o r reiga e d . o u nai o y u mak t o n g n a” •P ce wi a v e n e a l ak d t d i a d x mpe h c s •E s frcs &b d es ay oeats u gt “ raea a t npa fr o r C e t n ci ln o y u o •Pee t o r l wi s l rsn y u pa t t e n h y mak t gt go y u b sn s . rei o rw o r u ie s” n •Is n d wno d n t t o la ! a V rin1 . eso 10 $ 7 .5 1 99 L anmoea er w wp lat.o r tw .ao l c m oA o thsmak t gpa b u ti rei ln nN me , c t n , n n mb r i teoin l l ma h v b e c a g d a ds b tni p ro s fh oin l l tx ma a s l ai s a d u esn h r i p n y a e e n h n e , n u s t l ot n o te r i p n e t y o o ga a a a i ga ah v b e o t dt pe ev c ni nii a dpo r tr i omai . a e e n mi o rs re o f e t l n rpi ayn r t n t e d at y e f oG ieie o u igti pa ud l s n sn hs ln nY uaew l met u etip na as rn p i t ce t y u o n b t o d n t a ep r si t rpo u e p bs , o r e o o s h l s t t g o to rae o r w , u y u o o h v emi o o e rd c , u lh c s a ai n sn id tb t o e e c p tip na i x t h r. e u s fre r t a a e c s , n oh r i e n t no tis mp p n ir ue r v n o y h l st is ee R q e t o rpi s c d miu e a d te d s mi i fh a l l si s a es s n, s ao s e as o l b e idt temak t gd p r n o P lAt S f aea mak t g a a oc m. o po u t fr t nv i u h u e mae o h d l rei e at t f a l ot r t rei @p l l . n me o o w n o t o F r rd c i omai it r n o sow b i a w wp l l . m o c l -0 -2 -5 6 e se t w .a a oc t o t o r a 18 02 97 2 . lC p r h ©P lAt S f ae Ic ( w .a a oc m)Ali t rs re . o yi t a l ot r,n .w wp l l . . l g s e ev d g o o w ot o rh
    • Confidentiality AgreementThe undersigned reader acknowledges that the information provided by _______________ in thismarketing plan is confidential; therefore, reader agrees not to disclose it without the express writtenpermission of _______________.It is acknowledged by reader that information to be furnished in this marketing plan is in all respectsconfidential in nature, other than information which is in the public domain through other means andthat any disclosure or use of same by reader, may cause serious harm or damage to_______________.Upon request, this document is to be immediately returned to _______________.___________________Signature___________________Name (typed or printed)___________________DateThis is a marketing plan. It does not imply an offering of securities.
    • Table of Contents1.0 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.0 Situation Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2.1 Market Needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2.2 The Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2.2.1 Market Demographics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 2.2.2 Market Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 2.2.3 Market Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 2.2.4 Macroenvironment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 2.3 The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.3.1 Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.3.2 Service Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.3.3 Positioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.3.4 SWOT Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.3.4.1 Strengths . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2.3.4.2 Weaknesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2.3.4.3 Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2.3.4.4 Threats . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2.3.5 Historical Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 2.4 Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 2.4.1 Direct Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 2.4.2 Indirect Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113.0 Marketing Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 3.1 Value Proposition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 3.2 Critical Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 3.3 Financial Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 3.4 Marketing Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 3.5 Target Market Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 3.6 Messaging . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 3.6.1 Branding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 3.7 Strategy Pyramids . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134.0 Marketing Mix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 4.1 Product Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 4.2 Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 4.3 Promotion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 4.3.1 Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 4.3.2 Public Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 4.3.3 Direct Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 4.4 Web Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 4.4.1 Website Goals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 4.4.2 Website Marketing Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 4.4.3 Development Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 4.5 Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 4.6 Implementation Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 4.7 Sales Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 4.7.1 Sales Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 4.7.2 Sales Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 4.7.3 Prospecting Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195.0 Financials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 5.1 Break-even Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 5.2 Sales Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 5.3 Expense Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 5.4 Linking Expenses to Strategy and Tactics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 5.5 Contribution Margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
    • Table of Contents6.0 Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 6.1 Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 6.2 Keys to Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 6.3 Contingency Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 6.4 Marketing Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
    • Riverview Hotel1.0 Executive Summary The Riverview Hotel, Notown USA, is representative of the five star brand within the Exclusive Business Hotels of the World group. All Riverview Hotels are boutique properties, offering between 25 and 35 exclusive rooms. The Riverview properties are renowned for their convenient and strategic locations within major cities throughout the country. Also synonymous with the brand are the high level of personal service guests receive, and the extensive range of comprehensive business facilities available in luxurious settings. The Riverview Hotel, Notown has 35 exclusive rooms and is targeting corporate guests with a two to three night stay requirement. Target business segments include the IT sector, due to the proximity of the property to Silicone Hill, USA; the automotive industry in order to capitalize on the strategic location of the hotel in relation to the Overall Motors Plant and HQ in Notown and travel trade guests attending National and International Travel Fares at the Notown Exhibition Halls. Differentiating the type of business service offered, from that of the competition, will assist not only in building the Riverview brand as a whole, but will attract frequent business travelers, who require a higher level of personal service and recognition than they can receive at competitive five star properties in Notown. This will provide the Riverview with an opportunity to leverage its core competencies as regards servicing the business traveller in a luxurious environment.2.0 Situation Analysis The Exclusive Business Hotels of the World group is the ninth largest International Hotel chain in the world, with over 320 wholly owned and managed properties. The group specializes in occupying strategic, inner city locations and serving primarily corporate clients. The properties range from three to five star plus categories, and include the following brands: River Inns (3*), River Post Houses (4*), and Riverview Hotels (5*+). The group has a high instance of repeat business across all its brands, particularly the Riverview Hotels properties, which account for 68% of total revenue across the group. The Riverview Hotel, Notown, is dependent on annually contracted clients from the travel trade, automotive and IT sectors with guaranteed room nights per year. This area of business accounts for 70% of the propertys revenue. The current market is somewhat depressed, due to the economic downturn and restrictions being made on corporate travel within the U.S. This threat to the critical corporate sector could be considered as short to medium term, as indications of a return to business travel are observed. Riverview Hotel, Notown, must continue to focus on delivering an exemplary business service, at affordable rates, in order to develop the customer relationship beyond one stay. Competitive room rates have been cut dramatically in order to attract contract clients over the next 10-12 month period. The Riverview Hotels survival in the current environment, will be dependent on repeat corporate contract business and customer loyalty to the brand. The brand must therefore continue to deliver on its promise and values. Page 1
    • Riverview Hotel2.1 Market Needs The Riverview Hotel offers value and benefits to our clients, over and above the standard of our facilities and affordable rates. We seek to provide our guests with an exemplary personal service, and level of recognition that they have come to rely upon. We provide our guest with a luxurious, relaxed environment within which to conduct their business. An environment which they cannot find at our larger, more impersonal competitors. Our guests need to know that they can develop a relationship with the hotel that will ensure efficiency, value for their money and reliability in supplying them with the support they need, when they need it. The Riverview Hotel operates in a city with a very strong sense of community, and we want to stay an integral part of that community.2.2 The Market The Riverview Hotel is a boutique 5*+ hotel comprising 35 luxury guest rooms and specializing in servicing business and corporate clients. It serves the business community, and visiting business traveller, in the city of Notown USA. Our key clients are contracted corporate clients originating from both international and domestic markets from within the travel trade, automotive and IT segments. The strategic location of the property is key to its success in these areas due to the proximity of the Exhibition Halls, Overall Motors and Silicone Hill, USA. Key to our business success is the level of customer loyalty and repeat business we receive on an annual basis. We offer our guests the most up-to-date technical business facilities, both inside the rooms and within the hotels conference facilities. Our guests feel that they can conduct their business from within a less austere atmosphere than can be experienced in our competitive properties, where there is less personal recognition. They appreciate being called by name when they arrive, and having staff remember their specific requirements, time and again. This is key in developing the relationship beyond an initial stay and evidences our added value in relation to competitive properties in the vicinity. Table: Market Analysis Market Analysis 2005 2006 2007 2008 2009 Potential Customers Growth CAGR Travel 7% 1,000 1,071 1,147 1,228 1,315 7.09% IT Industry 8% 1,200 1,296 1,400 1,512 1,633 8.01% Automotive 10% 1,500 1,643 1,799 1,970 2,157 9.51% Total 8.38% 3,700 4,010 4,346 4,710 5,105 8.38% Page 2
    • Riverview Hotel Market Analysis (Pie) Travel IT Industry Automotive2.2.1 Market Demographics Market Geographics: Notown, USA is a suburb of Seattle, Washington, with a population of 150,000. Market Demographics: The community is made up predominantly of households having two to four children, either at home or away from home, with at least one parent/guardian having attended college. Market Psychographics: There is a strong small business ethic in the community, and many family-run enterprises have been prospering for generations. There is also a strong sense of community and a high level of awareness as regards to caring for the environment. Market Behaviors: Businesses in the area choose to support one another wherever possible, be remaining loyal to long standing relationships with customers and suppliers. This acts as a means of investing in, and supporting the community structure, rather than shifting alliances to large newcomer suppliers, despite the potential cost savings involved. This attitude supports the brand principles of the Riverview Hotel, which has had a presence in the city for 15 years, and is well supported by local business requirements for rooms, conference facilities and catering business functions. Based on research carried out in 2001, more than 68% of the population had some awareness of the Riverview Hotel. Awareness levels were highest amongst small- to medium-sized businesses with 20 or more employees, who had utilized the hotels facilities either for visiting business guests, or for their own functions. Page 3
    • Riverview Hotel Table: Market Demographics Market Demographics Market Segments - Characteristic Characteristic Characteristic Characteristic Travel - - - - - IT Industry - - - - - Automotive - - - - -2.2.2 Market Trends Market trends can be categorized as follows: Corporate Travel Policies, Local Business Trends, and Economic Cut Backs. Corporate Travel Policies: As a result of various security issues, as regards travelling in both domestic and international markets, there has been a significant drop in corporate guests visiting the city. Although the level of corporate room business appears to be increasing again, it has had a significant affect on last years result and consequent projections for the future. Local Business Trends: There has been a period of low activity in the area of conferencing and business catering with local companies electing to conduct meetings and seminars on their own premises in order to cost cut. This is changing however as group bookings, incoming visitors and day use of conference facilities is on the increase. Economic Cut Backs: The city cancelled three major trade events over the past three months, and exhibitions held at the halls had attendance figures much lower than expected. All booked events for the upcoming 12 month period however, including the Motor Show and the Northwest Tech Exhibition, have pre-booked attendance figures in line with expectations and in some cases in excess of projections. Market Analysis (Trends) 2,500 2,000 1,500 Travel IT Industry 1,000 Automotive 500 0 2005 2006 2007 2008 2009 Page 4
    • Riverview Hotel2.2.3 Market Growth The growth rate of the target markets has been steady over the past five years. The travel trade sector has grown at an average of 7.1%, the automotive sector at an average of 9.5% and the IT industry at 8%. Recent world events have caused a reduction in the growth rate, but current trends indicate a return to projected growth figures within the next three to six months. Once re-stabilized, growth is anticipated to continue at a steady pace in line with the expansions in the regions IT activities, the annual program of travel trade events taking place and the launch of a new overall motors model this year. Market Analysis (C.A.G.R) 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% Travel IT Industry Automotive2.2.4 Macroenvironment The external, environmental issues that affect the Riverview Hotel are: • Political: a stable environment where little affects our ability to generate revenue. • Economic: the recent recession has seen many smaller business-oriented hotel chains go into liquidation, as they do not possess the infrastructure to support under- performing properties as the larger chains do. Although recovery is beginning, it may take some time before corporate travel policy restrictions are fully lifted and business travel returns to the same levels of the past three years. • Social: the trend towards cost effective business travel leads hotel guests to seek more value for money, which is where our added value differentiation strategy comes into play. • Technological: the installation of on board room reservations systems on certain aircraft, will require a systems integration with the hotel groups own central reservation system. This will require a high level of investment. Page 5
    • Riverview Hotel2.3 The Company The Riverview Hotel, Notown USA, is representative of the five star brand within the Exclusive Business Hotels of the World group. All Riverview Hotels are boutique properties, offering between 25 and 35 exclusive rooms.2.3.1 Mission The Riverview Hotel is dedicated to providing its guests with the highest quality of service and standards. We seek to deliver on our promise of value and quality above all else. We value our place in the community and will work to develop those relationships and to respect and protect our environment. We will continue to strive to create value for both owners and shareholders whilst honoring our brand values and encouraging our personnel to develop themselves in an environment of trust, loyalty and encouragement.2.3.2 Service Offering Service: high-quality facilities accompanied by exemplary personal service, differentiated from competition in line with the overall brand strategy has proven to be a successful approach generating high levels of repeat business.2.3.3 Positioning The Riverview Hotel is positioned as a five star plus, business travelers hotel, strategically located and offering a high level of personal service. Our focus is on offering our guests added value and differentiating ourselves in our levels of personal service. We provide a quality hotel experience where guests are valued, respected and their business is truly appreciated.2.3.4 SWOT Summary The following analysis highlights the internal strengths and weaknesses of our organization and the opportunities and threats facing the company in our external environment. We must work to improve our areas of weakness. Organizational strengths must be leveraged in order to capitalize on external opportunities as they arise, and contingency plans formulated in order to deal with threats presented by the environment. Page 6
    • Riverview Hotel2.3.4.1 Strengths • Strategy: established differentiation strategy. • Structure: flat, decentralized structure. • Skills: diverse range of service skills within management and staff. • Style: strong, participative culture. • Staff: specialized and experienced staff that are motivated and highly skilled. A well trained team who are proud of their hotel and respect and promote the brand values. • Shared Values: clear and well communicated. • Brand Strength: brand values well represented engendering brand loyalty amongst existing and new guests. • Reputation: a strong reputation within the local market and corporate and travel trade markets for reliability, exemplary service and quality.2.3.4.2 Weaknesses • Strategy: differentiation strategy needs to be more clearly communicated externally, within local and national markets. • Systems: formal systems result from the detail oriented work and environment. Interdepartmental communications could be improved. • Staff: seasonal turnover requires ongoing training and orientation of new staff. • Facilities: certain rooms require renovation and upgrade as regards technical equipment, such as high speed Internet access and laptop links.2.3.4.3 Opportunities • Market: returning growth after a period of slump. • Competitors: no direct competition exists at present, in terms of the five star boutique business property niche. • Suppliers: strong, long-term relationships established with suppliers. • Guest Dependency: repeat corporate business based on personal service and quality, in a small but luxurious environment.2.3.4.4 Threats • Market Entry: potential for a competitive, global brand to enter the market with a similar product. • Substitutes: fully furnished and serviced business apartments offering lower daily rates. • Economy: recovery from slight recession may take time. Page 7
    • Riverview Hotel2.3.5 Historical Results Marketing activity in previous years, has produced positive results. The areas that have produced the best results have been: • Service: high-quality facilities accompanied by exemplary personal service, differentiated from competition, in line with the overall brand strategy has proven to be a successful approach generating high levels of repeat business. • Price: pricing strategy has been consistent with the differentiation objective, to provide added value for a reasonable rate as opposed to discounting and devaluing our products and services. • Place: service information is provided to the guest via personal selling, direct marketing, advertising and the Internet. Delivery channels include travel agents and international reservations systems. • Promotion: primary focus has been on mass communication via print ads in trade publications and on the Internet, direct mail campaigns to existing and prospective clients and personal selling in the local market. Personal selling provides the means to develop relationships within the local community and generate high levels of corporate activity through the business community. Public relations plays an important role in the marketing mix, presenting the hotel as a supportive member of the community and participating in significant local events to assist in developing ongoing cooperation, assures repeat business and good working relationships. Table: Historical Data Historical Data Variable 2002 2003 2004 Industry Revenue $100,000,000 $110,000,000 $115,000,000 Company Market Share 2% 2% 3% Company Revenue $2,000,000 $2,200,000 $3,450,000 Industry Variable Costs $70,000,000 $80,000,000 $80,000,000 Company Variable Costs $1,500,000 $1,700,000 $2,700,000 Industry Gross Contribution $30,000,000 $30,000,000 $35,000,000 Margin Company Gross Contribution $500,000 $500,000 $750,000 Margin Marketing Expenses $300,000 $350,000 $650,000 Company Net Contribution Margin $200,000 $150,000 $100,000 Page 8
    • Riverview Hotel2.4 Competition Although no direct competition exists, in terms of the five star plus boutique-style property, other five star hotels and serviced apartments do compete for the same corporate business sectors.2.4.1 Direct Competition • Hilton, Notown: 5 star city hotel, room rates on par with Riverview, older facilities. • Marriott, Notown: 5 star city hotel, room rates approximately 10% higher than Riverview, facility only four years old. • Glendale Apartments, Notown: 5 star furnished apartments, daily rates vary between Riverviews double deluxe and suite rates. • Hyatt Residence, Notown: 5 star furnished apartments, daily rates 15% higher than Riverviews double deluxe rates. These properties offer similar facilities, although somewhat less focused on business needs, and incorporate more leisure facilities than we currently provide. Table: Growth and Share Analysis Growth and Share Competitor Price Growth Rate Market Share Hilton $105 6% 20% Marriot $115 8% 33% Glendale Apts $105 6% 5% Hyatt Residence $120 5% 12% Riverview Hotel $105 8% 30% Average $110.00 6.50% 20.00% Total $550.00 32.50% 100.00% Page 9
    • Riverview HotelTable: Competitive AnalysisCompetitive Analysis #1 #2 #3 #4 #5 #6Competitor Hilton Marriot Glendale Hyatt Riverview Name meProduct and/or Service Hilton Marriot Glendale Hyatt Riverview Name meQuality 6 7 4 8 9 0Selection 5 7 5 6 9 0Price 6 6 6 6 8 0Other 0 0 0 0 0 0Location and Physical Hilton Marriot Glendale Hyatt Riverview Name meAppearanceTraffic 4 5 7 7 8 0Appearance 4 7 6 8 9 0Visibility 7 6 7 9 8 0Convenience Factors 7 6 6 8 9 0Other 0 0 0 0 0 0Added Value Factors Hilton Marriot Glendale Hyatt Riverview Name mePre and Post Sales Service 3 5 4 7 9 0Experience 7 8 6 9 9 0Expertise 6 7 5 8 9 0Reputation 5 9 6 8 9 0Image 6 9 4 8 8 0Stability 6 8 4 9 9 0Strategic Alliances 0 0 0 0 0 0Other 0 0 0 0 0 0Other Marketing Activities Hilton Marriot Glendale Hyatt Riverview Name meEstablished Sales Channels 0 0 0 0 0 0Advertising 0 0 0 0 0 0Post-purchase Support 0 0 0 0 0 0Incentives 0 0 0 0 0 0Loyalty Components 0 0 0 0 0 0Other 0 0 0 0 0 0Total 72 90 70 101 113 0 Competitor by Growth and Share 9% 8% Hilton 7% Marriot 6% Glendale Apts Hyatt Residence 5% Riverview Hotel 4% 86 88 90 92 94 96 98 100 102 Page 10
    • Riverview Hotel2.4.2 Indirect Competition Riverviews indirect competition is "distance" meetings in the corporate world. The more companies decide to conduct meeting over the phone, using web conferencing technology, and video phone technology, the less business people travel and the more it affects Riverview Hotel. Riverview has to keep abreast of all new distance meeting technology, and continue to reinforce with clients that there is no better way to do business then face to face.3.0 Marketing Strategy Our marketing strategys objective is to communicate the unique set of services that we offer to discerning hotel guests. We attempt to direct the focus of our guests to the issues of quality and value for the money as opposed to simply the bottom line costs associated with their stay. Our marketing strategy will allow us to communicate our brand values, develop close working relationships with our customers and suppliers and to identify the needs of our guests in an effective manner. Continued differentiation and growth are two goals we have set for ourselves. Growth will take place by targeting new areas of business within both local and national communities.3.1 Value Proposition Riverview Hotel offers the best, most personalized service for the corporate traveler. We include business essentials in every room, such as a nice desk, internet connection, wireless access, and provide easy to access meeting rooms with all audio-visual and technology needs as well as catering for longer meetings.3.2 Critical Issues We have many strengths including our differentiation strategy, our flat structure and highly skilled and well trained staff. Our weaknesses involve the need to communicate our strategy more clearly in the external environment, our high staff turnover and training requirements due to seasonal fluctuations. Although there is a low to medium threat of a competitive brand entering the market, there are also opportunities as regards the high level of dependency of our guests for our particular service and our strong position within the community with both customers and suppliers. Critical issues for the Riverview include: • Continuing to differentiate from our competition and offering added value to our guests. • Retaining our current levels of repeat business and developing further customer loyalty in a competitive market. • Attract new market sectors such as the Notown University-based business sector. • Continue to be perceived as a supportive member of the Notown community. Page 11
    • Riverview Hotel3.3 Financial Objectives • Increase overall room revenue by 10% on the past year. • Accomplish growth within the given budget of $250,000. • Increase corporate contracted rates to reflect the return of confidence in the corporate travel market. • Keep payroll expenses down and reduce the level of overtime within the workforce.3.4 Marketing Objectives • To continue to communicate our strategic objectives to our target markets effectively. • To provide a positive hotel experience to all our guests. • To accomplish our growth targets within the given time and budget. • Expand our markets and identify new markets for our product and services.3.5 Target Market Strategy Our primary targets continue to be professional visitors to the region from the following industries, where annual corporate contracts can be entered into: • Travel trade; • IT industry; • Automotive. Local firms will be targeted for day use of conference facilities, room nights for visiting executives and long stay professional guests.3.6 Messaging It is critical to the success of the Riverview Hotel to make sure that the hotel is kept up to the highest level in order to keep the high quality branding that Riverview properties are known for. Our messaging will reflect this high standard that we want to be associated with. We need to print brochures with high quality photographs as well as on high quality paper. It will be important to spend a little bit extra on marketing materials to ensure that they keep our "high quality" message in front of our customers.3.6.1 Branding The Riverview Hotel, Notown USA, is representative of the five star brand within the Exclusive Business Hotels of the World group. All Riverview Hotels are boutique properties, offering between 25 and 35 exclusive rooms. The Riverview properties are renowned for their convenient and strategic locations within major cities throughout the country. Also synonymous with the brand are the high level of personal service guests receive, and the extensive range of comprehensive business facilities available in luxurious settings. Page 12
    • Riverview Hotel Table: Target Market Messaging Target Market Messaging Market Segments Messaging Travel Most Luxurious Small Hotel IT Industry Business Ammentities and Proximity to IT Industry Automotive Best Business Ammentities3.7 Strategy Pyramids Our marketing strategy is to focus customers attention on the high quality of the services we offer. Within this strategy are three main points aimed at different market segments. We will provide: • The Best Business facilities • Personalized Services • Luxurious Amenities Strategy Pyramid Strategy Best Business Facilities Free wireless access Executive Business Rooms Personalized Service Employees trained to always provide first name personalized service Keep customer file with all preferences Luxurious Amenities Include Spa Quality Bathroom amenities Include Plush Bathrobes in every room Page 13
    • Riverview Hotel4.0 Marketing Mix Place: product and service information are sold to the guest via personal selling, direct marketing, advertising and the Internet. Delivery channels include travel agents and international reservations systems.4.1 Product Marketing Product: high quality facilities accompanied by exemplary personal service, differentiated from competition quality with the overall brand strategy has proven to be a successful approach generating high levels of repeat business.4.2 Pricing Pricing strategy has been consistent with the differentiation objective, to provide added value for a reasonable rate as opposed to discounting and de valuing our products and services. Room rates quoted are net of tax and service, are per night, per room with continental breakfast included: • Corporate single - $95.00; • Corporate double - $125.00; • Corporate double deluxe - $ 175.00; • Corporate suite - $225.00 (maximum occupancy 2 persons). Conference room rates are net of tax and service, quoted per day use with tea and coffee breaks (2) included: • The Riverview Boardroom - $260.00; • The Riverview Conference Hall - $320.00; • The Riverview Ballroom - $875.00.4.3 Promotion Promotion: primary focus will remain on mass communication via print ads in trade publications and on the Internet. Direct mail campaigns to existing and prospective clients will increase as a cost effective means of targeted campaigning. Personal selling in the local market will remain an important element of the mix in order to continue to build long-term relationships within the local community and generate high levels of corporate activity. Public relations activities will continue to play an important role in the marketing mix, presenting the hotel as a supportive member of the community and participating in significant local events. Page 14
    • Riverview Hotel4.3.1 Advertising The following table shows our primary advertising milestones. Table: Advertising Milestones Milestones Advertising Start Date End Date Budget Manager Department Contract media space 1/1/2005 4/1/2005 $20,000 Geoff Marketing Ad agency liasonon print ad material 1/1/2005 3/28/2005 $11,000 Geoff Marketing Dispatch/monitor campaign results 5/1/2005 8/1/2005 $2,000 Sally Marketing Total Advertising Budget $33,0004.3.2 Public Relations The following table shows our primary PR milestones. Table: PR Milestones Milestones PR Start Date End Date Budget Manager Department Public relations functions to schedule 2/1/2005 3/1/2005 $0 Anne PR Evaluate sponsorship requests 3/1/2005 4/1/2005 $0 Anne PR Establish list of sponsorship 4/1/2005 6/1/2005 $6,000 Anne PR events/companies Total PR Budget $6,0004.3.3 Direct Marketing Our direct marketing will be handled by our PR agency. We will buy select targeted list of corporate companies and send them information about Riverview Hotel. We know that we are no experts in direct marketing so it will be important that our PR agency handles every aspect of direct marketing for us. Table: Direct Marketing Milestones Milestones Direct Marketing Start Date End Date Budget Manager Department Direct mail lists to purchase/prepare 2/1/2005 3/1/2005 $6,000 Sally Marketing Ad agency liason on direct mail 3/1/2004 3/1/2005 $7,000 Sally Marketing material Total Direct Marketing Budget $13,000 Page 15
    • Riverview Hotel4.4 Web Plan Our website is already up and running, but needs to be revamped to give it an updated look and feel, as well as to add secure interactivity. The content is good -- it just need a little refresher. We need: 1. New home page design and navigation 2. Online reservations capability 3. Printable brochure4.4.1 Website Goals Our website needs to be able to do the following: 1. Convey our messaging of high quality, luxury business accommodations 2. Be indexed on major travel websites so that people find us 3. Be able to take reservations online and make changes to reservations online4.4.2 Website Marketing Strategy Our main website marketing strategy hinges upon making sure all major travel sites such as Expedia.com, Orbitz.com, and Hotels.com list our hotel when customers search for hotels in our area.4.4.3 Development Requirements To attain the level of interactivity we want in our redesign, we need to increase the features allowed (security for reservations and credit-card processing, daily back-ups, and real-time database linking) and service-level of our hosting service. This will slightly increase our monthly hosting fee. Sally has contracted with a database developer to update our reservations system to be compatible with the online reservation requirements. The new website will be ready to launch in April. Page 16
    • Riverview Hotel Table: Pay-per-click ROAS Pay-Per-Click ROAS Network Monthly Leads Monthly Cost-per- Cost-per- Clicks Orders ROAS Cost Generated Revenue click lead Google $3,000 600 75 10 $5,000 167% $5.00 $40.00 Yahoo! $2,000 300 40 5 $4,000 200% $6.67 $50.00 Other $500 100 30 3 $1,500 300% $5.00 $16.67 Total 5500 1000 145 18 10500 222% $5.56 $35.56 Table: Website Milestones Milestones Web Development Start Date End Date Budget Manager Department Homepage Re-design 1/1/2005 1/15/2005 $1,000 Shelly Marketing Printable Brochures 1/1/2005 1/15/2005 $2,000 Shelly Marketing Online reservations 1/1/2005 1/15/2005 $6,000 Shelly Marketing Total Web Development Budget $9,0004.5 Service Our hotel provides guests with an alternative to the impersonal, large five star properties in the city. Strategically located, our property enables our guests to be at the heart of the business community and yet in an environment of calm and professionalism. We seek to differentiate our product and services in the following areas: • Personal recognition of our frequent travelers who return time and again. • Luxurious rooms that offer a sense of doing business from home. • Staff that have a strong customer-service ethic. • Business facilities second to none in town.4.6 Implementation Schedule New marketing campaign efforts will be focused from January through April, aimed at the launch of the redesigned website in April. We will continue to track the results of this campaign for the remainder of the year. Page 17
    • Riverview Hotel Table: Milestones Milestones Advertising Start Date End Date Budget Manager Department Contract media space 1/1/2005 4/1/2005 $20,000 Geoff Marketing Ad agency liasonon print ad material 1/1/2005 3/28/2005 $11,000 Geoff Marketing Dispatch/monitor campaign results 5/1/2005 8/1/2005 $2,000 Sally Marketing Total Advertising Budget $33,000 PR Start Date End Date Budget Manager Department Public relations functions to schedule 2/1/2005 3/1/2005 $0 Anne PR Evaluate sponsorship requests 3/1/2005 4/1/2005 $0 Anne PR Establish list of sponsorship 4/1/2005 6/1/2005 $6,000 Anne PR events/companies Total PR Budget $6,000 Direct Marketing Start Date End Date Budget Manager Department Direct mail lists to purchase/prepare 2/1/2005 3/1/2005 $6,000 Sally Marketing Ad agency liason on direct mail 3/1/2004 3/1/2005 $7,000 Sally Marketing material Total Direct Marketing Budget $13,000 Web Development Start Date End Date Budget Manager Department Homepage Re-design 1/1/2005 1/15/2005 $1,000 Shelly Marketing Printable Brochures 1/1/2005 1/15/2005 $2,000 Shelly Marketing Online reservations 1/1/2005 1/15/2005 $6,000 Shelly Marketing Total Web Development Budget $9,000 Other Start Date End Date Budget Manager Department Name me 1/1/2006 1/15/2006 $0 ABC Department Name me 1/1/2006 1/15/2006 $0 ABC Department Name me 1/1/2006 1/15/2006 $0 ABC Department Other 1/1/2006 1/15/2006 $0 ABC Department Total Other Budget $0 Totals $61,0004.7 Sales Plan Our sales plan hinges upon our sales strategy, sales process and, prospecting plan. As long as we follow the plans laid below we should be in good shape.4.7.1 Sales Strategy Riverview Hotels sales strategy hinges upon repeat visits by key corporate accounts. We need to develop a relationship with the companies listed in our Sales Account Plan, as well as actively generate new accounts by soliciting first time corporate visitors. It will be important to remain competitive on price, as well as amenities. The corporate accounting department wants to make sure they limit the amount of money spent per night per employee on a business trip, but the business traveler will be able to express preference. If the price is right, and the business traveler knows that they will have all amenities they need while at the Riverview Hotel, we will be assured of keeping and attracting key accounts. Page 18
    • Riverview Hotel4.7.2 Sales Process We will be sure to mail out corporate packets every 6 months to our key accounts, as well as any new accounts we acquire. The packets will have information about corporate pricing and discounts, as well as information about rooms and amenities for the companies to share with business travelers. The biggest piece of our sales process will depend on personal relationships. We will need to make every business traveler feel like we remember them and we know their likes and dislikes. We also need to cultivate good relationships with the person at the company who makes travel arrangements. Table: Sales Account Plan Sales Account Plan Target Accounts History Status Annual Sales Potential Key Account Manager Company A disappointed proposal $20,000 Geoff w/ current made Company B referral from designing $15,000 Geoff Jack proposal Company C request on drafting $10,000 Sally 12/15 response Existing Key Accounts History Status Annual Sales Potential Key Account Manager Company 1 3 years Stable $40,000 Sally Company 2 5 annual check next $60,000 Geoff conferences month Other - - $0 - Total $145,0004.7.3 Prospecting Plan Whenever a new customers stays at our hotel we need to be able to determine whether it is for leisure or business. If it is for business -- we need to make sure to get the customers business name and address so that we can send a corporate packet to the company letting them know about corporate pricing and special business amenities.5.0 Financials Our annual marketing budget is $100,000. Sales are anticipated to achieve revenue of $1,172,925. Our marketing expenses will equate to approximately 8.5% of the overall revenue. Page 19
    • Riverview Hotel5.1 Break-even Analysis Table: Fixed Costs Fixed Costs Cost Rent or Lease $0 Professional Services $1,000 Payroll $10,000 Interest Payments $2,000 Utilities & Telephone $5,000 Non-discretionary marketing $0 expenses Other $0 Total Fixed Costs $18,000 Table: Break-even Analysis Break-even Analysis Monthly Units Break-even 145 Monthly Revenue Break-even $19,929 Assumptions: Average Per-Unit Revenue $137.14 Average Per-Unit Variable Cost $13.28 Estimated Monthly Fixed Cost $18,000 Break-even Analysis $10,000 $5,000 $0 ($5,000) ($10,000) ($15,000) ($20,000) 0 40 80 120 160 200 Monthly break-even point Break-even point = where line intersects with 0 Page 20
    • Riverview Hotel5.2 Sales Forecast Room revenue for this year is based on an average growth rate of 10%. This is based on the number of pre-contracted corporate rooms, and an anticipated return to business levels projected. Table: Sales Forecast Sales Forecast FY 2006 FY 2007 FY 2008 Unit Sales Corporate Single 1,925 2,118 2,118 Corporate Double 3,665 4,032 4,032 Corporate Deluxe 2,695 2,965 2,965 Corporate Suite 268 294 294 Total Unit Sales 8,553 9,409 9,408 Unit Prices FY 2006 FY 2007 FY 2008 Corporate Single $95.00 $95.00 $99.00 Corporate Double $125.00 $125.00 $135.00 Corporate Deluxe $175.00 $175.00 $195.00 Corporate Suite $225.00 $225.00 $240.00 Sales Corporate Single $182,875 $201,210 $209,633 Corporate Double $458,125 $504,000 $544,253 Corporate Deluxe $471,625 $518,875 $578,175 Corporate Suite $60,300 $66,150 $70,560 Total Sales $1,172,925 $1,290,235 $1,402,620 Direct Unit Costs FY 2006 FY 2007 FY 2008 Corporate Single $7.86 $11.00 $11.00 Corporate Double $13.92 $13.50 $13.50 Corporate Deluxe $17.50 $18.50 $18.50 Corporate Suite $0.84 $0.00 $0.00 Direct Cost of Sales Corporate Single $15,138 $23,298 $23,293 Corporate Double $51,033 $54,432 $54,425 Corporate Deluxe $47,163 $54,853 $54,853 Corporate Suite $225 $0 $0 Subtotal Direct Cost of Sales $113,558 $132,583 $132,570 Page 21
    • Riverview Hotel Sales Monthly $140,000 $120,000 $100,000 Corporate Single $80,000 Corporate Double $60,000 Corporate Deluxe Corporate Suite $40,000 $20,000 $0 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar5.3 Expense Forecast Marketing expenses are projected to be approximately 8.5% of overall annual revenue. The breakdown of expenditures is as follows: Table: Marketing Expense Budget Marketing Expense Budget FY 2006 FY 2007 FY 2008 Print Advertising $10,600 $11,600 $12,826 Internet Advertising $21,000 $23,100 $25,410 Public Relations $6,000 $6,600 $7,260 Other $21,000 $23,100 $25,410 ------------ ------------ ------------ Total Sales and Marketing Expenses $58,600 $64,400 $70,906 Percent of Sales 5.00% 4.99% 5.06% Page 22
    • Riverview Hotel Monthly Expense Budget $6,000 $5,000 $4,000 Print Advertising $3,000 Internet Advertising Public Relations $2,000 Other $1,000 $0 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar5.4 Linking Expenses to Strategy and Tactics Our marketing expense is structured to reflect the corporate strategy differentiation. Quarterly travel trade publications and interim monthly press ads communicate our message to key corporate clients in one of our most significant target markets. Monthly Internet advertising expenses include banner ads, and strategic links with car hire, airline and destination management companies websites to drive business to the hotel. Direct mail activity builds our targeted customer database, not only in terms of improving the quality of the data we currently hold, but on increasing the size of the database with prospective customer information. Public relations expenses cover PR events, participation at local functions and sponsorship funds. Overall, the percentage of total revenue required to support the marketing expense is considered a moderate amount. Page 23
    • Riverview Hotel Sales vs. Expenses Monthly $140,000 $120,000 $100,000 $80,000 Sales $60,000 Expenses $40,000 $20,000 $0 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar5.5 Contribution Margin Contribution margins should increase due to: • Differentiation/focus strategy increases ability to specialize. • Maintenance of expenses within specified levels. • Increased efficiency in capacity utilization. • Economies of scale due to increased purchasing efficiencies. Table: Contribution Margin Contribution Margin FY 2006 FY 2007 FY 2008 Sales $1,172,925 $1,290,235 $1,402,620 Direct Cost of Sales $113,558 $132,583 $132,570 Other Costs of Sales $0 $0 $0 ------------ ------------ ------------ Total Cost of Sales $113,558 $132,583 $132,570 Gross Margin $1,059,368 $1,157,653 $1,270,050 Gross Margin % 90.32% 89.72% 90.55% Marketing Expense Budget FY 2006 FY 2007 FY 2008 Print Advertising $10,600 $11,600 $12,826 Internet Advertising $21,000 $23,100 $25,410 Public Relations $6,000 $6,600 $7,260 Other $21,000 $23,100 $25,410 ------------ ------------ ------------ Total Sales and Marketing Expenses $58,600 $64,400 $70,906 Percent of Sales 5.00% 4.99% 5.06% Contribution Margin $1,000,768 $1,093,253 $1,199,144 Contribution Margin / Sales 85.32% 84.73% 85.49% Page 24
    • Riverview Hotel Contribution Margin Monthly $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar6.0 Controls Our marketing plan is structured to enable us to achieve the strategic goals we have set for ourselves, in terms of increasing overall revenue as a result of differentiating our products and services from the competition. Our marketing team will ensure that the plan is implemented to the best of their ability and with the highest levels of efficiency and accuracy.6.1 Implementation All figures will be monitored on an ongoing basis in relation to projections versus actuals, and the ongoing plan will be altered or manipulated as necessary in order to react to and, wherever possible, anticipate external changes to the environment. Annual results will be evaluated at the Region General Managers meeting where the structure of the plan for the approaching year will also be established. Page 25
    • Riverview Hotel6.2 Keys to Success • Continue to develop ongoing relationships with frequent and new guests. • Continue to develop and implement a strong communications plan in both national and international markets. • Leverage our strength in the local market as a member of the community by supporting local events. • Identify new markets for our services such as University-based target groups. • Continue ongoing staff training and skill development to ensure the highest standards of service.6.3 Contingency Planning Contingency plans have been made for the following unexpected developments: • A slower recovery from the recession than public opinion: this has been reflected in the moderate increase in levels of corporate business expected. • The entry into the market of a competitively aligned hotel: differentiation would continue to be the strategic approach with the development of added value and benefits to leverage long standing relationships and repeat business based on familiarity and personal attention to detail.6.4 Marketing Organization Our marketing director, Geoff Watkins, leads our PR and marketing team of four in all advertising, promotional and public relations related activities. Geoff works closely with the members of the team, to implement and monitor the effectiveness of the marketing plan and evaluate results. Page 26
    • AppendixAppendix Table: Sales Forecast Sales Forecast Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Unit Sales Corporate Single 0% 180 175 175 160 150 175 175 125 100 160 175 175 Corporate Double 0% 280 260 375 300 280 375 360 280 200 300 375 280 Corporate Deluxe 0% 260 240 250 225 200 250 220 225 175 225 200 225 Corporate Suite 0% 10 5 45 15 5 75 60 15 3 15 5 15 Total Unit Sales 730 680 845 700 635 875 815 645 478 700 755 695 Unit Prices Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Corporate Single $95.00 $95.00 $95.00 $95.00 $95.00 $95.00 $95.00 $95.00 $95.00 $95.00 $95.00 $95.00 Corporate Double $125.00 $125.00 $125.00 $125.00 $125.00 $125.00 $125.00 $125.00 $125.00 $125.00 $125.00 $125.00 Corporate Deluxe $175.00 $175.00 $175.00 $175.00 $175.00 $175.00 $175.00 $175.00 $175.00 $175.00 $175.00 $175.00 Corporate Suite $225.00 $225.00 $225.00 $225.00 $225.00 $225.00 $225.00 $225.00 $225.00 $225.00 $225.00 $225.00 Sales Corporate Single $17,100 $16,625 $16,625 $15,200 $14,250 $16,625 $16,625 $11,875 $9,500 $15,200 $16,625 $16,625 Corporate Double $35,000 $32,500 $46,875 $37,500 $35,000 $46,875 $45,000 $35,000 $25,000 $37,500 $46,875 $35,000 Corporate Deluxe $45,500 $42,000 $43,750 $39,375 $35,000 $43,750 $38,500 $39,375 $30,625 $39,375 $35,000 $39,375 Corporate Suite $2,250 $1,125 $10,125 $3,375 $1,125 $16,875 $13,500 $3,375 $675 $3,375 $1,125 $3,375 Total Sales $99,850 $92,250 $117,375 $95,450 $85,375 $124,125 $113,625 $89,625 $65,800 $95,450 $99,625 $94,375 Direct Unit Costs Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Corporate Single 0.00% $9.50 $9.50 $0.50 $9.50 $9.50 $0.50 $9.50 $9.50 $9.50 $9.50 $9.50 $9.50 Corporate Double 0.00% $12.50 $12.50 $12.50 $12.50 $12.50 $12.50 $12.50 $21.50 $12.50 $21.50 $12.50 $12.50 Corporate Deluxe 0.00% $17.50 $17.50 $17.50 $17.50 $17.50 $17.50 $17.50 $17.50 $17.50 $17.50 $17.50 $17.50 Corporate Suite 0.00% $22.50 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Direct Cost of Sales Corporate Single $1,710 $1,663 $88 $1,520 $1,425 $88 $1,663 $1,188 $950 $1,520 $1,663 $1,663 Corporate Double $3,500 $3,250 $4,688 $3,750 $3,500 $4,688 $4,500 $6,020 $2,500 $6,450 $4,688 $3,500 Corporate Deluxe $4,550 $4,200 $4,375 $3,938 $3,500 $4,375 $3,850 $3,938 $3,063 $3,938 $3,500 $3,938 Corporate Suite $225 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Subtotal Direct Cost of Sales $9,985 $9,113 $9,150 $9,208 $8,425 $9,150 $10,013 $11,145 $6,513 $11,908 $9,850 $9,100 Page 27
    • AppendixAppendix Table: Marketing Expense Budget Marketing Expense Budget Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Print Advertising $2,000 $400 $400 $2,000 $300 $300 $2,000 $300 $300 $2,000 $300 $300 Internet Advertising $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 Public Relations $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 Other $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Total Sales and Marketing $6,000 $4,400 $4,400 $6,000 $4,300 $4,300 $6,000 $4,300 $4,300 $6,000 $4,300 $4,300 Expenses Percent of Sales 6.01% 4.77% 3.75% 6.29% 5.04% 3.46% 5.28% 4.80% 6.53% 6.29% 4.32% 4.56% Page 28
    • AppendixAppendix Table: Contribution Margin Contribution Margin Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Sales $99,850 $92,250 $117,375 $95,450 $85,375 $124,125 $113,625 $89,625 $65,800 $95,450 $99,625 $94,375 Direct Cost of Sales $9,985 $9,113 $9,150 $9,208 $8,425 $9,150 $10,013 $11,145 $6,513 $11,908 $9,850 $9,100 Other Costs of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Total Cost of Sales $9,985 $9,113 $9,150 $9,208 $8,425 $9,150 $10,013 $11,145 $6,513 $11,908 $9,850 $9,100 Gross Margin $89,865 $83,138 $108,225 $86,243 $76,950 $114,975 $103,613 $78,480 $59,288 $83,543 $89,775 $85,275 Gross Margin % 90.00% 90.12% 92.20% 90.35% 90.13% 92.63% 91.19% 87.56% 90.10% 87.52% 90.11% 90.36% Marketing Expense Budget Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Print Advertising $2,000 $400 $400 $2,000 $300 $300 $2,000 $300 $300 $2,000 $300 $300 Internet Advertising $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 Public Relations $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 Other $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Total Sales and Marketing Expenses $6,000 $4,400 $4,400 $6,000 $4,300 $4,300 $6,000 $4,300 $4,300 $6,000 $4,300 $4,300 Percent of Sales 6.01% 4.77% 3.75% 6.29% 5.04% 3.46% 5.28% 4.80% 6.53% 6.29% 4.32% 4.56% Contribution Margin $83,865 $78,738 $103,825 $80,243 $72,650 $110,675 $97,613 $74,180 $54,988 $77,543 $85,475 $80,975 Contribution Margin / Sales 83.99% 85.35% 88.46% 84.07% 85.10% 89.16% 85.91% 82.77% 83.57% 81.24% 85.80% 85.80% Page 29