Applied Marketing Strategy - The Rocker Hotel Sunderland

1. Executive Summary

The conducted marketing plan is hoping to achieve and support the hotel’s major objective, which is to “aim for perfection in hospitality.” (Tavistock Leisure, 2007)

After an environmental analysis considering the macro and the micro environment, strength and weaknesses as well as potential future opportunities and threats will be outlined. ‘The marketing mix in practice will be commented on, by focusing on the product in terms of branding and product development but also on the other elements of the marketing mix such as price, promotion and distribution. Move’ will furthermore illustrate the research design used as well as other possible research methodologies, which could not be applied due to scale and scope of this piece of work.

Finally, several strategic options and their approximate costs of implementation will be suggested, which could be realised by the Tavistock Roker Hotel.

The marketing activities remain a very important factor of success and are crucial for the company to sustain profitable. One of the major strength of the hotel is site next to sea, offering its customers a wonderful view.

2. Situation Analysis

Tavistock Leisure was formed as an independent company in 1998, now operating eight locations across the North East of the UK. The parent company Durham Estates is a land and property company which provided Tavistock Leisure with capital, which made it possible to acquire Marsden Grotto. Tavistock Leisure, refurbished the Grotto for 12 month and opened a Seafood restaurant, which “achieved a turnover of £1.5 million in 2001. The Roker Hotel was acquired in September 2002, as it “has fallen into decline during its past ownership and was once ‘the place’ to visit.” After refurbishments, the site with the Thai China Restaurant, the Tavistock Italia and the R-Bar became the company’s flagship, achieving a turnover of £ 4 million in 2006. (Tavistock Leisure, 2007) However, revenues from food and beverage account for 65% and accommodation only for 35%. Nevertheless, the occupancy rate is 72%, whereas the national average is 64%. (Donkin, 2007)

After selling the Marsden Grotto and 11 Tavistock place Restaurant, the company acquired several businesses, including the Ropery and a former Barclays Bank in order to convert them into a bar and restaurant, after major refurbishments. In 2006, the Coquetvale Hotel in Northumberland was refurbished and “re-opened under the Tavistock Leisure Brand”. (Tavistock Leisure, 2007)

2.1 Environmental Analysis

2.1.1 The micro environment

In order to analyse the micro environment, Kotler and Keller (2006) state that significant microenvironment actors are customers, competitors, suppliers, distributors and dealers, as they affect a business unit’s “ability to earn profits”.

2.1.1.1 Customer Analysis

Demographics

The people aged 30 till 40 can be identified s as the main customer group for the hotel. Male customers dominate among the business travellers, whereas there is an equal ratio among leisure travellers.

For the restaurants, the age group ranges from 20 till 60.

Geographics

The catchment area for the restaurants is the greater area of Sunderland, whereas the hotel targets nationwide and even international. According to the interview with Keith Donkin (2007), 45% of customers are targeted online by the global distribution system (GDS), 5% are chance customers and the rest are coming for business purposes from all over the UK.

Behaviour Factors

Customers enjoy the variety offered by the Tavistock Roker Hotel, as it hosts additionally to the hotel, the Thai China Restaurant, the Tavistock Italia and the R-Bar, which is a traditionally English pub, serving food during the day. Furthermore, many customers come in order to enjoy the magnificent sea view. (Donkin, 2007) However, the Roker Hotel targets both, business and leisure travellers.

Referring to Vavra (1997, cited in Poon, 2005) “customer satisfaction is the leading criteria for determining the quality delivered to customers through the product or service and the accompanying services.”

2.1.1.2 Competitor Analysis

Porter (1985, cited by De Witt and Meyer, 2004, p.258) states that “competition is the core of success or failure of firms”. Therefore, a company must search for its most favourable position in order to sustain competitive advantage in their industry by considering the factors ‘where to compete’ and ‘how to compete’.

Competition for the Tavistock Roker Hotel comes in various forms including other hotels, B&B, restaurants and bars. According to the interview with the Managing Director (2007), the hotel uses a benchmarking strategy, where they measure themselves against the main competitor, the Marriott, which is the ‘best-in-class’, in order to improve the hotel’s performance. (Hooley et al, 2003)

The Marriott hotel offers its guests a four-star accommodation, including satellite TV and Internet access. Furthermore, it provides facilities for balls, weddings and special events for up to 250 people, but also an indoor fitness centre with swimming pool, a bar and the Promenade Restaurant. (Sunderland Marriott Hotel, 2007) Other competitors are the Pullman Lodge Hotel, which is close by and the Travelodge in the city centre. In terms of banqueting, the Marriott and the Stadium of Light build the main rivals. The Italian restaurant ‘Luciano’s’ and the newly opened ‘Angelo’s’ are according to the managing director (2007) the only competition for the Tavistock Italia, as the ones on the seaside are not in the same league.

2.1.1.3 Collaborator Analysis

According to Hooley et al (2003), organisations “are experiencing an important change from an era of competition to an era of strategic collaboration.”

Collaboration can be seen with Nissan, the Sunderland football club and the University of Sunderland, as they have a special arrangement to send employees, delegates or players to the Tavistock Rocker Hotel.

Furthermore, the hotel collaborates with its suppliers for food and any other additional appliances. It also outsourced its washing services and is working together with ‘Sorted PR’, a public relations company based in Sunderland, responsible for all the media and press releases. (Donkin, 2007)

2.1.2 The macro environment

In order to analyse the macro environment and possible opportunities and threats, the Tavistock Roker Hotel faces, ‘Move Consultancy’ conducted a PEST analysis (see Appendix 1), which incorporates “the political and economic, social (including legal and cultural) and technological environment.” (Hooley et al, 2004, p.94)

From the political point of view, legal changes like the smoking ban in July 2007 (BBC – News, Dec. 2006) will have an impact on the hotel, as this law prohibits smoking in all “enclosed public places including offices, factories, pubs and bars.”

Considering the economic environment, the UK has an almost remarkable growth of 2.3 % in GDP to a total of $ 2.57 trn, resulting in a GDP per head of $ 42,430 in 2006. (The Economist, 2006) Furthermore, ESRC Society Today (2006) is stating that disposable income among UK citizens is constantly increasing, ensuring sufficient purchasing power.

Major changes in demographics are affecting the hospitality industry in its social environment. From the total UK population of 60.5 million (Economist, 2006), 16% are aged 65 and over. The number of elderly people aged 65 and over increased from 13% to 16% within the last 30 years, whereas the number of people below 16 decreased in this period from 25% to 19%. (National Statistics, 2007) Furthermore, customers became more demanding in terms of price-performance ratio and expectations are increasing.

The technological environment is changing constantly and as every industry, the hospitality industry is also affected. Booking systems are changed to electronic systems and there is a much more intense use of the internet than 10 years ago. In marketing terms, e-marketing and commerce has to be recognised by almost every organisation due to its growing usage.

2.1.3 Environmental Analysis – Summary by SWOT Analysis

As Barney (1991), recommends that companies gain competitive advantage by exploiting their “internal strength, through responding to environmental opportunities, while neutralizing external threats and avoiding internal weaknesses” Therefore, ‘Move’ Consultancy conducted a SWOT analysis which can be seen in Appendix 2.

Strengths of the Tavistock Roker Hotel are numerous, beginning with the friendly and helpful staff. Throughout all departments, employees are young and enthusiastic about their work. Nevertheless, the main strengths is the unique location, bordering the seaside, which offers the customers a wonderful view, especially from the premium. (Observation of Roker Hotel, 2007) Furthermore, the Roker Hotel offers the most hotel rooms in the Sunderland area, which allows large amount of sales. Another strength is the availability of banqueting facilities which can host up to 350 guests, whereas the Marriott can only host 250. (Sunderland Marriott Hotel, 2007)

One of the main weaknesses of the Roker Hotel is its outside appearance. The site itself is not differentiating itself from the terrace building complex in colour or building style. Resulting from the close observation (2007), it can be said that the outside appears old and untended. Another weakness is, in the short-term, the refurbishment as they can be distracting for the hotel guests. According to a conversation with a receptionist on a guided tour (2007), the hotel is refurbishing the hotel continuously through the year, doing one room after another. This can cause disturbance of the visitors due to sound and appearance of construction sites. The identification with the brand ‘Tavistock’ seems as another weakness, because it is visible through its logo in most facilities and supplies, but it is not appearing in the R-Bar and the Thai China Restaurant, which might be confusing for customers. On the guided tour (2007), the question for breakfast facilities came up, which are basically not given and the hotel guest have to have breakfast in the Thai China Restaurant.

Opportunities can be found in the extended use of the internet. The Tavistock Roker Hotel is at present only registered online at the global distribution system (GDS), which is accessible for travel agencies. In order to widen the catching area of customers online, the hotel could register databases, accessible to private customers. This could raise additional sources of income and be another channel to attract customers worldwide. (Donkin, 2007) Furthermore, the Managing Director (2007) states, that competition is more likely to be seen as an opportunity, because the more facilities open in the area, the more potential customers can be attracted, especially for the restaurants. Due to this opportunity, the hotel expects a growth rate of 10% in the next two years. The increase in disposable income offers an opportunity for the hotel, as it is fairly high priced and not targeting price-sensitive customers.

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