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HTM402 Final Exam Lecture Notes.docx

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Ryerson University
HTM 402
Richard Wade

Lecture Notes  Market Potential Analysis o A Market Potential Analysis should attempt to answer two questions:  Is the marketplace supportive from a future growth perspective?  How well is the business performing, and does it have the potential to outperform the competition? o 1) Is the marketplace supportive?  Environmental Analysis: economic, demographic, socio-cultural, demographic, technological, political  Community Analysis:  demography of trade = Incidence level of the identified target markets  Economic factors – Vitality of local community  Marketplace growth o 2) Is the business demonstrating the potential to outperform the competition?  Competition Analysis – primary competitors & Strengths and weaknesses  Service Analysis – perceived strengths/weaknesses and assets/skills of new business  Site & Location Analysis – How does the new site compare to the competitors?  Site & Location Analysis o Location Profile/Characteristics: setting, specific location i.e. mall, free standing; size and shape, visibility, parking availability, type and nature of traffic artery, median strips, ingress and egress, traffic counts, level of illumination  Service Analysis o 1. Description of Product/Service Offering  Elaboration of the business background section  Description of the business concept  Description of the physical facilities  Description of services offered  Operating days/hours  Product/service/pricing o 2. Product/Service Performance (results of consumer surveys)  (a) Purpose of trip  (b) Motivations re-usage  (c) Rating of product/service offering  Food quality, conveniene, cleanliness, friendliness, location  Cross Tabulations – several cross tablulations are required in relation to your performance assessment of the business with which you have partnered. Appropriate cross tabulations would include: frequency of use, gender, age andotehr demographic traits o 3. Other Assessments = mystery shopper (person/objective), comment card analysis, comments of owner/operator o 4. Customer Profile – consumer survey, owner/operator, any inconsistencies observed o 5. Determination of strengths and weaknesses = consumer surveys, owner/operator comments, third party observations (Zagat), group perceptions  Note: this is performance related  Bloor Street Diner determined strengths and weaknesses by a consumer survey, and management and other observations  Strengths = located in the major business district of Toronto (demand generator), fresh food quality, service speed (fast and efficient service)  Weaknesses = not enough variety in menu, young chain (not as well known as other brand such as McDonalds), service courtesy (lowest on the survey) o 6. Identificaiton of Major Assets and Skills  They address the more underlying facets of the company i.e. good location  Qualifications/experience of management team  Marketing savvy  HR & training/orientation skills  SWOT Analysis o Strengths & Weakness are determined by the service analysis and site & location analysis o Threats & Opportunities are determined by the environmental analysis, community analysis and competition analysis o King Ranch SWOT Analysis  Strengths – quality and breadth of facilities and services; management and service staff; business reputation of the Koffler family; High level of financial support; location; first mover advantage (first occupant into a market segment)  Weaknesses – insufficient marketing, enforced rules to spa (no drinking, smoking), climate of Toronto, large overhead costs (labor), unfavorable exclusive image, very young company (inexperienced)  Opportunities – close to suitable market segment; existence of development lands around King Ranch owned by Koffler family), low interest rartes, increase in popularity of health & fitness, population aging and becoming older & richer  Threats – market not ready for a purist spa concept, poor economy (white collar recession), public misconception of spa’s, spa’s untested business concept in Canada, potential increase in competition o Strategizing Process – SO = Strength and Opportunities; WO = Weaknesses and Opportunities; ST = Strategies and Threats, WT = Weaknesses and Threats  Strategy 1 – develop condominiums on the property  Strengths = high level of financial support  Opportunities = low interest rates, aging population  Strategy 2 – Maintain Purist Spa, Redirect Marketing Effort  Weaknesses = inappropriate and insufficient marketing, unfavorable exclusive image  Opportunities = close to large suitable market segment, population aging  Strategy 3 – Form an Alliance with International Hotel Chain to Promote King Ranch  Weaknesses = very young company, insufficient marketing, unfavorable image  Threats = market not ready for purist spa, public misconception of spa’s, potential increase in competition  Market Position Analysis o Positioning is the development of a product/service in conjunction with other marketing mix elements to occupy a specific place in the minds of customers within identified target markets.  Positioning is much about image i.e. re-consumers, competitors and the marketplace. Examples: Four Seasons Hotels (high-end quality of service), Lick’s (homeburgers), Ryerson University (career focused)  Reasons for Positioning = perceptual processes (selective attention, distortion and retention), intensified competition, volume of commercial messages  Effective Positioning  Needs of customers with specific markets and the benefits they seek  Knowledge of the organization’s competitive strengths and weaknesses  A famililiarity with the competitor’s strengths and weaknesses  Information on how the customers perceive the organization relative to the competitors o Perceptual Mapping  Price is always on the y-axis  Other variables: facilities, level of service, quality, amenities, reputation, décor, menu selection  Restaurants are rated on a five-star system by Toronto Life’s anonymous reviewers, who are required to be honest, accurate and fair.  Patron’s Pick = variables are rated out of 100  Dipamo’s Example: the variables used on the perceptual map = food quality, décor, level of service  Competition Analysis o Determination of the competition  4 Forms of Competition: Product Form Competition, Product Category Competition, General Competition & Budget Competition:  Three Means/Approaches of determining the competition  Consumer Surveys o The competition question in the consumer surveys, should provide a list of potential competitors by frequency of mentions  Opinions of Owner/Operator o By showing them an inventory of potential competitors within the primary and secondary trading areas of the new location, they may be able to identify who they believe may be their future competitors  Product Related Segmentation o Demographic, psychographic, geographic and behavior (usage frequency/rate, user status. Loyalty status, user occasions and benefits) o 4 Categories of loyalty status  Hard-Core loyals = generally not affected by price  Soft-Core loyals = inconvenience, price, promotion)  Shifting loyals = certain period of time  Switchers o Product related segmentation looks for similarities among the inventory of would-be competitors with the planned new business o One needs to determine which set of physical characteristics best defines the planned new business venture/concept o Food Service Segmentation Bases: Location, type of foodservice, licensed vs. unlicensed, franchise, menu theme, total number of seats, square footage  Others include: quality rating, entertainment, menu pricing, patio, catering services, and breath menu o Lodging Segmentation Bases: geographic location, class of hotel, size of hotel, level of service, type, amenities/facilities, room rate, rating, category (all suite, conference, boutique) o Comparative analysis of the competition  An assessment of the competition by undertaking a comparative analysis of the identified primary competitors. Third party assessments could also be introduced and used here  Can be done by location, curb appeal, products/facilities, services offered, concept, ambience, pricing, hours of operation, and special features (e.g. patio)  This analysis should result in some perceptions about the relative strengths and weaknesses of the competitors  The Annual Marketing Plan o Where are we now?  This could be determined by the Situational Analysis and the SWOT Analysis o Where would we like to be?  Target markets, marketing positioning, marketing strategy Awareness/Selection, Marketing Objectives o How do we get there?  Activities plan  marketing mix  Marketing budget, activity schedule, assigning responsibility o How do we know if we are getting there?  Control Procedures (during the year)  Performance standards/benchmarks  Progress measurement and reporting  Corrective Action o How do we know if we got there?  Evaluation procedures (towards the end of the year)  Performance measurement re-objectives  Broad assessment of the entire organization re-marketing support and effectiveness o Sustainable Competitive Advantage Concept (SCA)  Fundamental to any effective competitive strategy  Four factors requisite for the creation of a sustainable competitive advantage (SCA):  What skills and assets one uses to compete (relates to the basis of competition) Ex. Marche has its concept (unique, convenience of a QSR, high food quality)  Where one competes (relates to the target markets and their needs)  Who one competes against (relates to the competition) – capitalize on assets and skills superior to competition while meeting the needs of the consuming public.  How one competes (related to specific functuinal strategies that are used to compete)  Customers perceive a consistent difference in important attributes between on firm or property and its competition (e.g. better value)  The difference is a result in a capability gap between the firm and its competition  Both the difference in important attributes and the capability gap endure overtime (long term)  Tim Horton’s Example  What?(skills and assets) = Name is an asset; Product Quality is a skill  Who? (one competes against) = competitors are coffe shops, soup/salad shops, cafes, etc  Where? Consumer need – moderately priced offering of staple menu items e.g. coffee, baked goods, soups, etc  How? o Product Line = relatively broad o Distribution – plazas, gas stations, institutions o Pricing – well valued o Positioning – somewhat unique = bakery/café/sandwich operation o Common Sustainable Competitive Advantages  Top 5: reputation for quality, consumer service/product support, name recognition, retain good management, low-cost production o Marketing/Business Strategies  Generic business strategies  Differentiation Strategy = when a firm seeks to differentiate its products/services relative to the compe
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