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Table of Content
Introduction ............................................................................................................................ 6 Section 01: Orientation .......................................................................................................... 8 Section 02: Managing Brands .............................................................................................. 13 Section 03: Marketing Strategies ......................................................................................... 16 Section 04: New Product Development Process .................................................................. 20 Conclusion ........................................................................................................................... 24 Reference ............................................................................................................................. 25
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Introduction
Assignment Objectives Understand the Organization’s Orientation and explain the steps need to be taken in order to change the orientation as Marketing Oriented. Identify the process followed in Managing Brands within the organization. Understand the Marketing Strategies that the organization implements in order to deliver value to shareholders and other stakeholders. Find the New Product Development Process followed in the organization.
Organization Background Owinka Lake Resort (Private) Limited Company which belongs to hospitality industry was established in 27th February 2009. It is a family business which consists of four shareholders and the organization performs, as a signal company, which does not belong to any business groups of companies. The organization comprise of 15 employees 1
including the management officers.
Figure 1: Organization Logo [Source: (Owinka Lake Resort Private Limited, 2009)]
“Owinka Lake Resort in Gonadua is located in unspoiled and tropical atmosphere with the blessings of river, Bolgoda. 75 Km from the Colombo International Airport and only 2 hours’ drive from Colombo to this comfort and relaxing resort. The Owinka Lake Resort clings to the south lake of Bologoda River.” (Owinka Lake Resort Private Limited, 2009) 1
Logo is a Property of Owinka Lake Resort (Private) Limited Company.
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The customer base of the organization can be illustrated as follows,
5%
20%
German 15%
50%
10%
French UK Local Other
Figure 2: Customer Base of the Hotel [Source: Research Data]
Even though they have much more larger local customer base compare to foreign customer base, they mainly focuses on foreign customers as it leads to higher profits. They are trying to fully utilize the environment they are having and capitalize on it as a competitor advantage. Currently they are facilitating activities like Lake Fishing, Water Sports, Bird Watching, Boat Riding, River cruise, Camping, Jungle Biking, and Jogging. The company is more into organic food plantation in their own hotel premises as well. “We are farming large variety of vegetables and fruits using traditional farming technologies of Sri Lanka. The Hotel garden consists of lot of small vegetable frames. You have opportunity to taste our organic fruits and vegetables.� (Owinka Lake Resort Private Limited, 2009)
Methodology The data has been collected through interviews and observations. The Global Sales and Marketing Manager of the Owinka Lake Resort (Private) Limited has interviewed at the hotel premises. The gathered data were analysed using both quantitative and qualitative methods.
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Section 01: Orientation
Describe the Orientation that prevails within the organization. If the organization is not marketing oriented, what steps should be carried out to create that orientation.
Organization Orientation The organization’s orientation emphasize the way how the organization gives the priority toward what they believe is more important than others among number of factors like sale, product, marketing, engineering, profits, sustainability...etc. There are no hard written rules about how an organization can be categorized. However by looking at overall performances and believes of the company, it can roughly categorized into one or to the other.
Available Organization Orientations
Organization Orientation
Main Characteristic
Sales Oriented
Main concentration on taking orders and moving product
Engineering Oriented
Main concentration on producing the best quality and advance technical products
Manufacturing Oriented
Main concentration is to produce larger volumes
Profit Oriented
Main concentration is to earn profits as much as possible
Marketing Oriented
Main concentration on the customers and relationships. Table 1: Orientation and Main Characteristic
Most of the companies’ orientation could be a mixture of two or more orientations as well. There can be many more different types of orientations than mentioned above by mixing the characteristics of each.
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Factors Affect Organization Orientation There are two main methods that organization orientations get affected. One method is, believes of the Chairman, Director Board, Chief Operating Officer, Senior Managers or the staff. Other method is inheriting the orientation by the industry. For example, the companies in hospitality industry are usually marketing oriented. Therefore the new companies enter to this hospitality industry will focus on marketing. Otherwise they will not be able to survive within the industry. This is the reason why Owinka Lake Resort has established their orientation as a marketing oriented company.
Marketing Oriented Organization The company usually deals with both product and services. Unlike products, when the organization delivering services, they needs to concentrate more about customer needs. McKinsey's Seven ‘S’ Framework can be used to identified the organization orientation in detail.
Systems
Staffing
Strategy Shared Values
Skills
Style
Structure
Figure 3: McKinsey's Seven S Frameworks (Value Based Management.Net, 2009)
The organization has identified their customers through creative segmentation and the importance of their customers as well. That is why they take feedback from the customer in all situations such as new product development. The larger portion of the new product
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ideas are coming from the customers and they actively work to make the customers dreams a reality. These actions emphasize that this company believes that the customer is on the top of the organization structure.
The majority of their customer visit the resort to spend their time calm and quietly. The company strategies are deployed in order to facilitate this requirement. They always try to capitalize the market by competitor advantage through the unique environment they have. Organization always focuses on customers and their satisfaction than profits as a strategy.
The style of the leadership is more customer-oriented. Most of the time managers themselves try to be friendly with the customers by moving with them. They have reduced the barriers between management and other working staff. All of them work as a family in order achieve the corporate goals.
As explained in the introductory section, the company has customers from countries like France and German. Even though the company is new to the industry, they have skilful people who can communicate in Sinhala, Tamil, English, French and German. They have necessary skills to provide all kind of foods relates to above mention countries as well. Owinka Lake Resort consistently invests to acquire necessary skill they require. For example, an ‘Ayurveda’ doctor for the ‘Spa’ Facility.
The company has deployed number of systems and procedures to track down the financial status, hiring, customer relationship, performance…etc. They hope to increase the efficiency of the company by satisfying internal and external customers.
The organization has understood the importance of marketing through everyone in the staff. They believe the marketing is no more restricted activity for marketing manager. The shared value of the company is to treat the employee as family members. As this company is a newly established company, they need to have a strong relationship between employees to drive a long journey.
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The organization actively participates on hiring skilful staff. For example they have technical people to run the boat service and knowledgeable people who can communicate with foreign languages as well. The company believes that employees are the people who can make the company a success and it is only possible if the employees give their fully contribution.
Figure 4: Market Orientation [Source: Marketing Presentation Slides IIHE, 2009]
The above illustration can be used to provide evidence to say that Owinka Lake Resort is a marketing oriented company. It shows where the company stands in product innovation – delivery process. It clearly shows that ‘Customer Needs’ is the starting point of the product development. Other than that every step of the process verified through customer feedback. [Refer Section 04: New Product Development Process for more details]
By comparing the company performs to McKinsey's Seven S Frameworks and the above market oriented process, it is clearly visible that Owinka Lake Resort is a Marketing Oriented company.
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Recommendations to Be More Marketing Oriented Developing a marketing oriented business is a long process and it needs more investments and an efficient plan. Changing the orientation cannot be done within few days. Even though the Owinka Lake Resort is already a marketing oriented company, they can use McKinsey's Seven S system to improve orientation in to more marketing oriented.
The current weakness they have according to the McKinsey's Seven S system is ‘system’ and ‘skill’ factors. Currently they do not have a sophisticate computerized marketing information system, therefore it is important to acquire that kind of system to easily store and retrieve data.
Other weakness is the lack of knowledge in water sports related activities. Currently they have boat a service which they facilitate to the customers. But they do not have necessary skills to introduce a new water sports like personal watercraft.
Finally the organization can be more marketing oriented by being truthful to the customers, providing continuous values to the customers and interacting friendly with the customers. Keep the relationship for a long time with the customer is also important by using social networks or any other new digital technologies.
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Section 02: Managing Brands
Describe the process followed in Managing Brands within the organization. Is there a brand focus and a conscious effort to build brands? Brand “It is the emotional and psychological relationship you have with your customers. Strong brands elicit thoughts, emotions, and sometimes physiological responses from customers.”
(Ehret, 2009)
“A brand is a collection of perceptions in the mind of the consumer”
(Bates, 2009)
Responsibility According to the organization structure, Global Sales and Marketing Manager is the person who is in charge of managing the brand. However there is another shareholder of the company who works as the Marketing Director of the organization who also work in a Tour Agent firm, is also responsible for marketing and brand managing for the company. Together with them, the entire staff members work hard to make their brand.
The company was established under the slogan ‘Let us pamper you and your soul’. At the same time, ‘Owinka Lake Resort, Bolgoda’ is used as the brand name through all promotion channels.
It is a strategy they are using to say that they are located surrounded by lake with great atmosphere. The slogan itself emphasizes their effort on customer satisfaction. They use a simple logo which also aligns with their theme of nature. They always try to make a very naturalistic environment through their logo, slogan as well as the brand name. They are targeting to fully utilize the competitive advantage by the three of them.
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Brand Management Process Under brand management process, brand positioning is the most important activity. As a newly established company Owinka Lake Resort is new to branding as well. The organization starts their brand managing with the establishment itself. At beginning, the company had their logo, slogan and brand name decided. From that point onwards they are trying to positioning themself in the hospitality industry.
This illustration shows the typical steps in brand positioning. This company also follows these steps in simplistic manner with limited budget.
Brand Positioning Strategies that Owinka Lake Resort following can be listed down as follows. 1. By Attribute 2. By Application / Use
Figure 5: The Cycle of Brand Positioning (Wilson & Blumenthal, 2008)
Owinka Lake Resort is advertising them as a hotel surrounded by a river and woodland. Their attribute of promoting is eco friendliness. They are also promoting their hotel as a place where customers easily get access the Bolgoda Lake which also facilitates calm and quiet environment, organic food, bird watching, lake fishing and boat riding.
Other than attribute strategy, the organization also uses application strategy as well. They are branding the resort as a calm and quiet destination, as a place where people can leave their stress out and enjoy the natural environment and also as a place for tourists who do not like traveling.
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Brand Focus and Conscious Effort The company is brand focus and make conscious effort towards brand building. For example they have done mistake by not fully utilizing the hotel promises to embed the corporate logo into the customers mind. Usually, the logo should be visible to the customer from the point they enter to the premises as well as considerable amount of places such as in the food plates, rooms, paper serviettes...etc. because at the end of the day, it is important to store the logo as a brand in the customers mind in order to maintain long term relationship. However they latterly identified that issue and currently working to make adjustments. Therefore it shows the brand consciousness of the organization.
The company invests a lot to add uniqueness to the resort by adding more and more facilities such as ‘Spa’ and ‘Dinner on river’. All these actions ultimately drive the company brand name to a better position. Listening to the ideas and requirements of customers and getting continuous feedback from the customers is the best example to show their effort on branding.
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Section 03: Marketing Strategies
Discuss the Marketing Strategies that the organization implements to deliver value to shareholders and other stakeholders. Marketing “Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.�
(Kotler, 1999)
Responsibility and Organization Support The marketing strategy of the organization was developed by the Global Sales and Marketing Manager. Then it was discussed, altered and approved by Marketing Director, General Manager and the Managing Director. According to the information provided by Global
Sales
and
Marketing
Manager,
6% All Other 94%
Marketing
company spends 6% from annual budget for promotional activities. The following chart show that how the company spend on each
Figure 6: Annual Budget
promotional activity.
[Source: Research Data]
News Paper Ads 10% 10% 10%
10% 40%
Brochers Web Site
20% E-Marketing
News Papers Articles Other Figure 7: Promotional Budget [Source: Research Data]
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Marketing Strategy Marketing strategy is a process that can allow companies to focus its limited resources on the best opportunities to improve their sales and succeed a sustainable competitive advantage. The following illustration shows the typical steps followed by the company in order to develop their marketing strategy. Consumer Analysis Going Back & revising
Market Analysis
Evaluating the Economics
Competition Analysis
Developing the Marketing Mix
Distribution Channel Review & Choice
Figure 8: Marketing Strategy Development Process [Source: (Kotelnikov, 2009)]
The most important step in the above process is ‘Developing the Marketing Mix’. This is what basically called ‘Marketing Strategy’. Owinka Lake Resort is following Five Ps Marketing Strategy. Product
People
Price
The Marketing Mix
Place
Promotion
Figure 9: Five Ps Marketing Strategy (Mangl, 2009)
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Product Strategy is developed in order to take decisions about product and services offered by the organization. It involves taking decision about new product and services development, quality assurance, adding new features and benefits, balancing product portfolios. Product Strategies are discussed in detail under section 4.
Price Strategy is developed in order to maintain the prices of the products and services. This strategy helps to do pricing for different market segments, deciding how to meet competitive pricing...etc. The organization always tries to offer the best price for their customer. Therefore they are following industry standard pricing schemes to price up their product and services.
Promotion Strategy is used to decide the promotion activities for the companies. Promotional activities that organization current involves are listed below. 1. Advertisements on Newspapers and Magazines. 2. Articles on Newspapers and Magazines. 3. Through Travel Agent. (Company Provides 5-10% Commission) 4. Corporate Website. 5. Social Networks and E marketing. 6. Brochures and Leaflets. 7. Word of mouth. (Through Employees and Customers) Placement (Place) Strategy is used to decide the levels of customer service. It is also responsible to decide where to market the company product. Owinka Lake Resort mainly focuses on foreign market. Therefore the most efficient method of marketing is through travel agents. They also target ‘small family groups’ in the local market. They use paper advertisements to target them.
People Strategy is used to understand and interact with the customers. Owinka Lake Resort has done the market segmentation properly and they are ready give customize service to each customer. They have identified the requirements, expectations and the mentalities of their customers. Company has skilful people to facilitate their customer using their native languages. Marketing
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Delivering Value to Shareholders and Stakeholders
According to the provided information, shareholders are the four owners who invest money in the company. At the same time, stakeholders are Employees, Suppliers, Environment, Customers, Community and Authorities.
Top management Commitment
Marketing
Drives growth & Shareholder Value
Customer value
Figure 10: Creating Customer Value [Source: Marketing Presentation Slides IIHE, 2009]
Delivering value to the shareholders and stakeholders can be done by many different ways. The above illustration shows that how the Owinka Lake Resort creating customer value.
Organization always offers best value to the customers. Value can be interpreted as price, convenience and product and service benefits. They also provide exactly what customer wants. That is why they always take feedback from customers on each and every activity. The company maintains long term relationship by giving them a wonderful experience at the hotel promises as well as getting connected to their lives through internet and offering special packages for their memorable events such as birthdays and wedding anniversaries.
The company works hard to create differential advantage and bring their customers satisfaction to a higher position by facilitating existing, latent and incipient needs. As a result of these all factors, shareholders get deliver their value as profits and sustainability while other stakeholders get deliver their value in term of satisfaction, salary and profits.
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Section 04: New Product Development Process
Discuss the New Product Development Process followed in the organization. What recommendations would you make to improve the process? New Products and Services Innovation The different in hospitality industry is that they need to deal with both product and services. The company needs to satisfy their customers within specific time period which they will reside in the hotel premises. It multiplies the difficulty of satisfying customers. Competitor advantage and the uniqueness is the most important factor that this company concentrates when they are developing new products.
Owinka Lake Resort is surrounded by the Bolgoda River as well farms and woodlands which facilitate lot of birds. Therefore all the product and services are developed in order to support the brand and the corporate theme. As a company in hospitality industry, the new products and services can be categorize as follows, Range of activities Range of foods Other facilities The following illustration gives a brief idea about what Owinka Lake Resort believe as a marketing oriented company. All the productions and innovation are developed around the customers. Therefore the development process start with customer needs and wants.
Figure 11: Market Orientation [Source: Marketing Presentation Slides IIHE, 2009]
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Requirement Identification and Idea Generation Methods According to the Global Sales and Marketing Manager of the Owinka Lake Resort, they identify customer need through number of methods.
Coustomer Request 20%
5% 50%
25%
Industry Research Owner Creation & Competition Culture and Opportunity
Figure 12: Requirement Identification methods [Source: Research Data]
The main method of identifying the requirements is through customer requests. Comparatively this is the easiest method. The hotel provides a customer feedback form to each customer. Through the form as well as verbally, they collect the products and services that customers like to have.
When the customers see that the company is respecting to their ideas, it leads to increase the customer loyalty as well. Ultimately it creates much more strong relationship between customer and the organization. The ideas getting from foreigners are important as they have experience in travelling around many countries.
For example, some considerable amount foreign customers have requested to have a ‘spa’ facility. Spa is kind of a medical unit which meditates the customers according to historic ‘Ayurveda’ mechanisms. Management is now working actively to open a ‘spa’ at the hotel promises.
Industry research is another successful way of identifying the customer needs and trends. Company has consulted number of industry experts to do that. General Manager also has
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some experience work in number of five star hotels around the world. Those experiences help them to work according to the trends.
Another important method is owner creation and competitive advantage. These product and services are introduced by the management. No customer involvement here. The idea behind is to create the need on the customers mind by pushing the facility towards customer. This mechanism can leads to a ‘Blue ocean’ market as well
For example, Management is currently working hard to facilitate a ‘Dinner on River’, which facilitate the customers to have a dinner on a floating dinner table on the river. This is not something requested by customers. By doing this, the company is trying to utilize their environment towards competitive advantage.
Their final method is identifying culture and social opportunities. Sri Lankan culture usually have number of seasonal and cultural event such as Sinhala Hindu Happy New Year, Christmas, 31st night, School Holidays…etc. The company introduces new product and services time to time by targeting above events.
New Product Development Process The above paragraph explained where the company stands in the idea generation step in the new product development process. The rest of the steps are listed below, 1. Idea Generation [Refer above paragraph] 2. Analysis 3. Development 4. Marketing In the Analysing step they verify the feasibility in term of technical and financial. Then they contact their industry experts to get to know their expert knowledge towards the new product. Then the management gets feedback from customers about the idea as well. Finally they take the decision, whether to develop or not.
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Development step is where the company invests money, time, resources and knowledge in order to make the idea a reality. Marketing is the last step that makes the customer aware of the newly developed product and let them enjoy it.
Recommendation to Improve The current process of new product development is almost fine within the company since establishment. However the effectiveness and the efficiency of current process can be improved by introducing slightly different process.
Idea Generation
Screening
Concept Development
Business Analysis
and Testing
Commercialization
Market Testing
Product and Marketing Mix Development
Figure 13: Recommended Steps in New Product Development Process [Source: (Christ, 2009)]
The proposed process step called ‘concept development and testing’ will help avoid costly mistakes. The company will be able to identify issues before they get into full scale development.
Business Analysis, Product and Marketing Mix Development and Market Testing steps urge the company to revise the company marketing strategy as well, because with the new product, there could be a possibility that the target audience could also get changed. Therefore it is important to follow those extra steps as well.
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Conclusion
Section 1 of the document discussed about the orientation of the Owinka Lake Resort (Private) Limited. During the analysis it is understood that the company is marketing oriented. Company’s performances are discussed compared to McKinsey's Seven ‘S’ Framework as well as marketing oriented process. Finally it provides sufficient evidence to prove the company’s orientation.
The brand managing process of the company is discussed under section 2 by relating to Marketing theories. The evidences are provided in order to show that they are brand focus and how they are making conscious effort to build their brand.
In section 3, market strategies followed by Owinka Lake Resort are discussed by reefing to the five Ps marketing strategy. Product, Price, Promotion, Place, People strategies are separately identified according to the information provided by the organization. Then it discussed about the how the company deliver value to the shareholders and stakeholder by manipulating the marketing strategy.
The new product development process of the organization is discussed in the final section. It also illustrated that how much the company is marketing oriented. Recommendations to improve the process are identified and presented at the end of the section.
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Reference Bates, C., 2009. What is a Brand? [Online] Available at: http://www.sideroad.com/Branding/what_is_brand.html [Accessed 15 November 2009]. Christ, P., 2009. KnowThis: Marketing Basics. KnowThis Media. Ehret, J., 2009. http://www.themarketingspotblog.com/2009/01/brand-marketing-basics.html. [Online] Available at: http://www.themarketingspotblog.com/2009/01/brand-marketingbasics.html [Accessed 15 November 2009]. Kotelnikov, V., 2009. Marketing Strategy. [Online] Available at: http://www.1000ventures.com/business_guide/marketing_strategy.html [Accessed 10 November 2009]. Kotler, P., 1999. Marketing Management: Analysis, Planning, Implementation, and Control. 9th ed. Prentice Hall. Mangl, T., 2009. 5 Ps For Efficient Business Marketing. [Online] Available at: http://ezinearticles.com/?5-Ps-For-Efficient-Business-Marketing&id=3167631 [Accessed 15 November 2009]. Owinka Lake Resort Private Limited, 2009. Our Location. [Online] Available at: http://www.owinkalake.com/our-location.html [Accessed 15 November 2009]. Philip, K. & Kevin, K., 2008. Marketing Management. New Jersey: Prentice Hall. Value Based Management.Net, 2009. McKinsey 7S Model. [Online] Available at: http://www.valuebasedmanagement.net/methods_7S.html [Accessed 15 November 2009]. Wilson, J. & Blumenthal, I., 2008. Managing Brand You: Seven Steps to Creating Your Most Successful Self. AMACOM.
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