A) Executive Summary:
Hotel Bilkent is a medium sized four star hotel, which is
located in Bilkent, Ankara. Its major customers are businessmen and executives
and two to three days visitors, who are especially the relatives of Bilkent
students. Hotel Bilkent has just made huge investments to increase its size,
and develop its appearance in which it operates. As a part of this investment a
new ball hall (with a capacity of a thousand) and executives floors (named
Konak 27) were established.
Although it is
actually a four star hotel, with these new investments it aims the high-income
level businessmen and executives (corporate clients) segment of the market.
This segment of the market is also the target market of five star hotels.
Therefore, we should examine Hotel Bilkent within the context of five star
hotels in Ankara.
The marketing plan of the hotel is firstly analyze the
current marketing situation and the environment of Hotel Bilkent. This analysis
is accompanied by a SWOT evaluation, an evaluation of the strengths and the
weaknesses of the company and also the opportunities and threats in the
environment. The objectives of Hotel Bilkent will be presented next. These objectives are the ends for Hotel
Bilkent and the means of these ends will be presented in the marketing strategy
part. At the end the control mechanism that Hotel Bilkent should employ to
monitor the effectiveness of marketing strategy will be explained.
The marketing strategy of the firm that focuses on the
growth strategy of becoming a premium business hotel. One of the marketing
managers of Hotel Bilkent defines this strategy as becoming a different,
extraordinary “boutique hotel” with a lot of distinctive competencies and high
quality service. This concept reflects the variety and quality of service. The
core product of resting and sleeping is highly augmented with the other
services, which will make Hotel Bilkent totally different from the competitors.
B) Current
Marketing Sıtuatıon:
To conceive the current marketing situation of Hotel
Bilkent we should firstly have a close look on the market.
1) Market:
The target market of Hotel Bilkent
comprises of businessmen who have affairs with the government agencies in
“capital city” Ankara. The executives or guests of companies that are mostly
located near Bilkent such as Botas and Amoco are also among the potential
clients.
The academicians who are here for either conference held by Bilkent
University or as the guests of YOK (Yuksek Ogretim Kurumu) which is located
near the Hotel Bilkent are another segment of the target market of Hotel
Bilkent.
The students of the university and their families are also the
potential clients of the hotel. In addition to that the companies which belongs
to the Bilkent Holding can be the clients of Hotel Bilkent when we take into
account the conference and seminar halls of the hotel. Moreover, anybody who
want to visit the historical and cultural places in Ankara while enjoying a peaceful
atmosphere with a high service quality can be a client for Hotel Bilkent.
As defining itself as a competitor
to five star hotels in Ankara, the people from abroad such as executives of
foreign corporations and embassy related people are also within the scope of
Hotel Bilkent. High percentages of the foreign people who stay in Hotel Bilkent
are either from Germany or US. Japan has an increasing percentage. However,
most of foreigners prefer the international chain hotels such as Sheraton or
Hilton. Therefore, being a domestic hotel is a barrier for Hotel Bilkent to
attract these people. However, the market for Ankara is very small relative to
Istanbul. According to data taken from DIE the number of foreigners who come
Ankara in 1995 are 114,123.Nevertheless, it is 2,007,384 for Istanbul in the
same year[1].
As the numbers imply the foreigners market for Ankara is very low.
With the new rooms and ball hall
(named Sakarya) and new five meeting halls which are added last year Hotel Bilkent
can be evaluated as a medium size hotel with respect to its competitors (i.e.:
five stars hotels). These new investments will be paid off with the growing
business volume of Bilkent Plaza and Ankara. With the increasing number of
companies the need for a business hotel has increased. Therefore, by increasing
its capacity, Hotel Bilkent has tried to be prepared for the growth in market.
As mentioned above the potential
customers of the hotel are businessmen, executives, and guests of companies.
Therefore, all of these target segments are not price sensitive but service
sensitive. They want to get a warm hospitality with service quality and
variety. Most of the potential customers (corporations) have a natural need of
conference and seminar halls since they often arrange educational seminars for
their staff. Hotel Bilkent also has tried to satisfy this need.
All of the clients of the hotel
perceive it as a premium hotel with both its service and price. We
intentionally assume that this is because of the service they get rather than
the price they have paid. According to the clients Hotel Bilkent is among the
best hotels of Ankara like Sheraton and Hilton. However, as a domestic, medium
sized and relatively new hotel this perception is great fir the hotel to grow
in the market. Actually, this perception is mostly because of the Bilkent
image.
As the occupancy rates imply the most
critical months for Hotel Bilkent are the January, February and March. According
to hotel management this is because of the long holidays because of bayrams (religious holidays) and
semester holidays of schools. In 1998, they try to overthrow this effect by
effective yield management system. They offer special discounts and try to
organize weddings in the new ballroom. This seems very effective in 1998. This
is the outcome of “Process Management”
system of Hotel Bilkent.
2) Product:
Currently, the main product of Hotel
Bilkent is the rooms, which are classified as single, double, and suits. With
the opening of executive floors the size and variety of this product has
increased. In total there are ninety-seven rooms in Hotel Bilkent. Twenty-one
of them are executive rooms (every one named differently), ten of them are
suites five of which executive and one royal suite. It is important to note
that three of the rooms are for disabled people. The remaining rooms are
regular. It is important to note that the new executive rooms and suites (named
Konak 27) have outstanding designs. Everyone is different from each other. And
also each one has a special name such as Zambak, Nilufer etc. Another important
product of the hotel is the food and beverage sales. With the new developments
by the experienced chiefs of Hotel Bilkent the variety of this product has been
increased (Such as Akdeniz Mutfagi Restaurant and Ankara Restaurant). Akvaryum
Bar and the mini bars in each room are for beverage services. The newly
constructed ball hall and five conference halls have increased its capacity for
seminars, conferences, and special meetings such as weddings, Republic Ball or
Graduation Ball. Entertainment facilities of Hotel Bilkent include sauna,
swimming pool, cinema, mini golf field, and fitness center. Less important
products of the hotel are special services such as laundry, dry cleaning, fax
and phone, computer, doctor and translator. Other special products are brunches
or dinners such as Sunday Brunch or iftars in Ramazan.
As seen below we can categorize Hotel
Bilkent’s products in six product lines. And each product line has its depth.
|
|
Suite |
Special Events Organizations |
Entertainment Facilities |
Special Services |
Food and Beverage |
|
Regular |
Regular |
Congress |
Swimming Pool |
Laundry |
Akdeniz Rest. |
|
Double |
Executive |
Conference |
Fitness Center |
Dry Cleaning |
Ankara Rest. |
|
Executive |
Royal |
Seminar |
Mini Golf Field |
Doctor |
Akvaryum Bar |
|
Disabled |
|
Weddings |
Cinema |
Translator |
Mini Bar in Room |
|
|
|
|
Sauna |
Phone, Fax and Computer |
|
The room prices are as follows:
|
Regular single room |
160 US$ |
|
Regular double room |
180 US$ |
|
Regular suite |
240 US$ |
|
Executive room(including
breakfast, limousine service) |
280 US$ |
|
Executive suite(including
breakfast, limousine service) |
480 US$ |
|
Executive corner
suite(including breakfast, limousine service) |
600 US$ |
|
Presidential (Royal)
Suite(including breakfast, limousine service) |
880 US$ |
The Flowchart of Hotel
Bilkent:
Flowcharting is an important tool for firms to understand the nature of
process and also the customer’s personal experiences. It also provides a first
step in controlling the services that are provided.
The core product for Hotel Bilkent is “retire for night”. The initial step in the flowchart is making
reservation. After the customer arrives to the Bilkent Hotel, his car was
driven to the park. Then, the customer checks in at the reception. Before the
customer enters the room, housekeeping makes up the room. To do this, the
housekeeping supplies must be exists.
The customer may drink cocktail in
Akvaryum Bar, or have meal in Akdeniz Restaurant. In the backstage there are
lots of processes to serve the best available service to the customer. All the supplies of these services require a
careful management. In Hotel Bilkent there is a department related with
purchase of the supplies.
Finally, the customer can use the room
facilities to get the core product.
As can be seen on the flowchart, there are
lots of augmented services around the core. But in the backstage there is
varity of activities taking places. Each service in front stage is supported by
these activities. This flowchart is a simplified map of services offered in
Hotel Bilkent.
3) Competition:
There
is a tough competition among five star hotels in Ankara because of the
relatively small size of the market (With respect to Istanbul) There are five
five stars hotels in Ankara. These are Hilton, Sheraton, Merit Altinel, Sürmeli
and Büyük Ankara.
Prices
of these hotels are nearly same with Hotel Bilkent. For instance, the prices of
Hilton are like this: 150 for single, 175 for double, 525 for executive suits,
and 1275 for royal suite. However, as the sales representative of Hotel
Bilkent, Mr. Soykan said, these prices are only on the paper. There may be huge
differences between these list prices and bargaining prices.
Two of the five star hotels in Ankara
are the members of international hotel chains. However, there are much more
international hotels in Istanbul. Therefore, the existence of only two
international hotels in Ankara is good for Hotel Bilkent There are great
differences with respect to know-how between the international hotels and
domestic one. Hotel Bilkent should employ education programs for its employees
to cover the difference that stems from the know-how. Most of the foreigners
prefer to stay in international hotels since they know them also in their
country. Therefore, Hotel Bilkent could not easily cover this handicap.
In addition to that, other five star
hotels are larger than Hotel Bilkent. Relative smallness of the hotel may be
perceived as a disadvantage but the managers of the hotel say that their scope
is very limited relative to others and smallness is not a problem for them
since they employ focus strategy. The other five star hotels try to capture all
high-income visitors market because of their size. Nevertheless, the segment
which attracts Hotel Bilkent is only the businessmen and executives.
Büyük
Ankara, Sürmeli, and Merit Altınel are not seen as the competitors by Hotel
Bilkent managers since they are old domestic hotels and mentality about service
can not be comparable to that of Sheraton, Hilton, and Hotel Bilkent. For
example, the atmospheres of these hotels are not much attractive for potential
clients. The furniture is old fashion. Merit had a casino before the ban on
gambling and Büyük Ankara has music hall that offers variety of famous singers
and shows. These are caused a change in the strategy of these hotels. Their
focus moved to high-income people who want to entertain rather than the
businessmen and executives who want to make business deals.
Hilton
and Sheraton use more advanced form of distribution compared with Hotel
Bilkent. For example, Hilton works with approximately ten travel agents where
Hotel Bilkent does not work.
All
five hotels use sales persons and special offers to make agreements with
companies. Although they use the same strategy, Hilton and Sheraton can be more
successful due to their “brand names”.
Promotion
activities of the five star hotels are varying. Especially, Hotel Bilkent,
Hilton and Sheraton are using this marketing mix tool more extensively than the
others are. The international hotels advertise locally but also
internationally. This gives an advantage to them. For example, Hilton uses
“magic dollar” concept for attracting the customers by offering free purchase
of goods with these dollars. In addition to this, “Lady Hilton Club” card
targets the women. Sheraton and Hilton are used for international fairs,
festivals and other leisure activities
The Perceptual Map:
We used price and service quality features of hotel services for
setting the perceptual map. Aristo Tour in Ankara completed this map. We asked
them to evaluate five of the hotels. As can be seen on the figure, they
perceive the service quality of Hilton and Sheraton as higher than Bilkent
Hotel. However, the management of Bilkent Hotel thinks that their service
quality is as high as Hilton and Sheraton. But, this map shows us that there is
a gap between what the customers perceive, and the managers expect. Although
the service quality is high, there may be a problem in marketing this quality
to customers. By seeing this problem in the map Hotel Bilkent managers can use
appropriate strategies such as promotion, to reach the customers perception.
So, Perceptual map can be used for addressing such problems and offering
solutions.
4) Distribution:
Currently, there is no
distribution system for Hotel Bilkent. They do not work with any travel agency.
However, for US operations they have just worked with Boeing. The Boeing firm
brought a group of Americans to Hotel Bilkent. However, there is not a
long-term agreement between the firms. They use a direct channel for marketing
their hotel.
5) Macro-Environmental Situation:
When the target market of
Hotel Bilkent taken into account there is no demographic change in Ankara. The
immigration from East and Central Anatolia to Ankara is irrelevant to position
of Hotel Bilkent. However, new constructions along the Eskisehir Road are
important for Hotel Bilkent. High income, upscale people of Ankara tend to
prefer to live in these sites. In addition to that, most of the firms begin to
understand the importance of the quality of service. It is a cultural and social
change that they begin to think about the service as well as price. They begin
to pay for the quality of service.
C) Opportunity
– Issue Analysis:
To define the marketing strategy we
should examine the environment in which Hotel Bilkent operates to determine the
opportunities and threats. Then, we should search for the solutions that
convert threats into opportunities and match them with the strengths of the
hotel.
1) Opportunities:
Over the years, Ankara has not been
evaluated as a business city. Traditionally, Istanbul is the “economic capital”
of the country. Most of the businessmen who come to Ankara have formal affairs
with the state. They come here for not their business relations but to follow
the state related affairs. This situation has not changed yet. However, as the
size of the business and economic activity increases in Turkey, as a natural
result of it the number of businessmen that have to come to Ankara will
increase. With the key role of Turkey in Central Asia the number of companies
which see Turkey as a stepping stone will increase in future. With this
development the size of the two to three days visits to Ankara should increase.
This is the first opportunity that can be equally dividable among the five star
hotels.
On the other hand, there is a unique
opportunity for Hotel Bilkent. It is the increasing size of business and
economic activity that occurs inside Bilkent. The Bilkent Plaza and Bilkent
Center are the new attraction centers in Ankara. There are a lot of firms and
state establishments, which are located or will be located in Bilkent.
Therefore, Hotel Bilkent has a real opportunity because of the proximity of it
to these companies.
2) Threats:
When we look at the threat side of
the environment, we first recognize the increasing pressures on some of the
Ankara-based firms to move their headquarters to Istanbul. As we said Istanbul
is the financial and economic capital of Turkey and some of the firms want to
be located in there because of the competitive considerations. One of them is
Is Bankasi which will move to its skyscrapers in Buyukdere. If the others
follow it the size of the companies in Ankara, which is already low will be
squeezed.
Increasing competition in the sector
is another threat for Hotel Bilkent. The new entrants to the sector also target
Hotel Bilkent’s target market of high-income businessmen. Class Hotel is one of
them and one more in the city center will be the next. Therefore, Hotel Bilkent
should evaluate the new entrants to its target market.
3) Strengths:
The most important strength of the
hotel is the name of Bilkent. In the last decade, Bilkent had been the gravity
center of the growth along the Eskisehir Road. Bilkent residences are followed
by Umitkoy, Koru Sitesi and Konutkent, which are the new life fields of
high-income people of Ankara. Bilkent is at the center of all these
developments. With this in mind, Bilkent has an image of luxurious and high
quality life. When Hotel Bilkent has this kind of brand name then the target
market will be more easily captured.
Another strength is the synergy,
which is created by Bilkent organizations. There are a lot of parents who stay
in Hotel Bilkent since their children study at Bilkent University. There are a
lot of academicians who stay in Hotel Bilkent since they have a conference in
the university. There are a lot of businessmen who stay in Hotel Bilkent since
they have an affair with Bilkent Holding. This synergy is an important strength
for the hotel.
Moreover, Hotel Bilkent has the
greatest ball and congress hall in Ankara. Especially, for congress and
weddings this is a great strength for Hotel Bilkent. Since these events have a
premium profit margin there are huge competition among hotels to capture this
market. However, Hotel Bilkent has strength on the other hotels with new
investments.
Silent and peaceful environment of
Hotel Bilkent is also strength for the hotel. All of the five star hotels in
Ankara located inside the city center then they have noise, traffic jam and air
that become canonically unclean by the exhausts. On the other hand, Hotel
Bilkent offers clean and fresh air of Bilkent and a silent atmosphere.
Nevertheless, some may argue that the location of the hotel is a disadvantage
for it since it is far away from the city center. However, we think that with
the changing preferences, most of people prefer the places, which offers a
peaceful atmosphere rather than approximate to the city. In addition to that,
reaching to city from Bilkent is not so hard since the road conditions of
Bilkent and Eskisehir Road (after new additions and maintenance) is very good.
Therefore, we see the location of Hotel Bilkent as strength not as weakness.
4) Weaknesses:
The most important weakness of Hotel
Bilkent is its lack of international recognition. Since it has no relationship
with international hotel chains, it is not known by international businessmen.
Nevertheless, Hotel Bilkent should convert this weakness into strength. In
addition to that, the staff of Hotel Bilkent is much more subject to the lack
of education. Since the international hotels use the know-how of their parents,
Hotel Bilkent managers should try to increase the education level of their
staff and should look for the enthusiasm inside them. This is the key for
converting this weakness into strength.
Another weakness can be the
relatively high prices of Hotel Bilkent. The pricing strategy of the hotel is
nearly same with Hilton and Sheraton. However, these hotels have traditional
significance in the market. Therefore, the prices should be evaluated one more
times with respect to these benchmarks. The pricing strategy of Hotel Bilkent
is related with the image that wants to be created. Whether the high price
equals high quality heuristic is the driving force in price setting or not the
level of service and the price of it is a questionable subject. Therefore,
Hotel Bilkent should increase its service level to the level that implied by
the price.
D) Objectives:
When we think about the financial
goals of Hotel Bilkent, we recognize that in the short run, it is enough rate
of return on these investments. This rate of return should be a high rate when
we think about the inflationary pressures in Turkish economy. Like the
definition of short run financial goals, the short run marketing goals of the
company is ambiguous since there is a revolution or evolution in marketing
strategy of the hotel. If we think the targeted market share it can not be more
than 10% of all high-income visitors. This is the case because of the size and
capacity of Hotel Bilkent. However, to becoming the most preferred business
hotel in Ankara is the long run goal of the hotel. This should be measured, as
occupancy rates not the number of customers because of the relatively low
capacity of Hotel Bilkent.
E) Marketing
Strategy:
1) Target Market:
The target market of Hotel Bilkent
is the businessmen and executives. The end for Hotel Bilkent is to becoming a
“business hotel”. When we take into account the capacity of the hotel this
concentrated strategy seems very reasonable. Since it can not capture all the
high-income market because of the capacity constraints (Sheraton and Hilton
have capacities over three times of Hotel Bilkent) focusing only one segment of
the market is a very good approach. The all market of five star hotels
comprises by the high-income buyers (individual or corporate). The target
market of Hotel Bilkent is a part of it, the corporate buyers, people who stay
on the account of a corporation. This concentrating strategy will ease the
creation of business hotel image. Highly related with its target market it
should also market its Sakarya ball hall and other five conference halls for
congress and special events. This market can not be thought as different than
the being a business hotel strategy. Since it is a natural need for businessmen
and executives. If you want to capture business market then you should give the
services like congress and seminar halls
2) Product:
The product of Hotel Bilkent is
simply the satisfaction of accommodation needs of people. The basic need of
resting and sleeping is the core product of Hotel Bilkent. Augmented product of
the hotel contains the other services in the hotel. Most important one of them
is the food and beverage. There are other services by the hotel such as
swimming pool, phone, the laundry services, sauna, fitness center, mini golf
field, barber, translator (English and German), and doctor.
When we think about the preferences
of the target market we face the reality that they are not cost sensitive but
service sensitive. The core product of Hotel Bilkent should be as comfortable
as the expectations of the clients. The comfortable beds and baths supported by
cable or satellite TV and a silence for works of the clients are the critical
things at that point. Moreover, the possible needs of photocopy, fax (there are
already fax machines in executive rooms) and internet need should also be
satisfied by the hotel to become a full service hotel. This ensures the
satisfaction of all possible needs of businessmen and executives. Hotel Bilkent
should make them sure that they can manage their businesses in the hotel room as
if they were in their offices.
The main product line of Hotel
Bilkent covers the rooms and food and beverage needs of the people. Another
important product line is the rentals of the halls of the hotel for the use for
conference, congress and seminars by the companies. In addition to that, the
use of the huge Sakarya ball hall for special events meetings such as weddings
is another product that is offered by Hotel Bilkent. As mentioned above, these
special events have huge profit margins so Hotel Bilkent should also
concentrate on them. The last product is the special Sunday brunches and
dinners in the holy month of Ramazan (iftar).
3) Distribution:
As the part of concentrated
target market strategy of the hotel, using a travel agency does not seem
reasonable. However, there are also travel agencies, which serve to the target
market of Hotel Bilkent such as VIP Tourism. Using such firms in the
reservation activities especially in Istanbul may be profitable for the hotel.
Nevertheless, since it is a service company it has a nature of direct
distribution.
4) Promotion:
The size and effectiveness of sales
force is an important element of Hotel Bilkent’s promotion works since an
important part of the Hotel Bilkent products comprises by the organization of
seminars and conference. These products require high level of personal selling
then the importance of sales force can not be ignored here. On the other hand,
relationship marketing with corporate customers is an important job of the
marketing staff. The relationship with corporate customers who are continuo
clients should be kept fresh by the sales force.
Advertisement policy of Hotel
Bilkent should be focused on upscale magazines. The hotel can give
advertisements to the magazines such as Finans Dunyasi, Capital, Hurriyet
Business Week, Congress, and Gelin (to capture weddings). These ads should
focus on the high quality service and the image of Bilkent as a different
atmosphere. Two ads in the following pages were taken from Skylife.
5) Pricing:
The prices mentioned above looks
relatively higher compared to Hilton and Sheraton. Since these hotels are
international chains they may charge premium prices. However, Hotel Bilkent is
a domestic firm and should have lower prices if it want to get a share in that
market. On the other hand, there are hidden facts about the prices. As
mentioned above the prices of these international hotels have a negotiation
base because of the high capacity of these hotels. However, Hotel Bilkent tries
to avoid bargaining on prices. This is a good practice since it wants to create
a premium class hotel. Moreover, the executive room and suite prices of Hotel
Bilkent include limousine service from airport, breakfast, and mini bar. Therefore,
what the customers get from Hotel Bilkent is more than the other hotels give.
With respect to pricing policy, we see the prices of Hotel Bilkent competitive
to others and it is also suitable for whole marketing strategy.
6) R&D:
The research and development works
of the hotel should focus on the service quality and food and beverage variety
of the hotel. For example, last year Hotel Bilkent opened the Akdeniz Mutfagi
or Ankara Restaurant with a variety of menus. These kind of special menus should
be developed for special weeks or months. In addition to that, the
implementation of modern technology in the hotel management operations is a
critical thing for the hotel to remain competitive in the market. This can be a
new accounting program or new computer program for reservations.
F) Action
Programs:
Within the product line of Hotel
Bilkent the core product of the rooms do not require any new work. However, for
the supporting products such as office machines of fax or internet and the
entertainment activities such as sports Hotel Bilkent should search for
immediate solutions. One of the solutions for sports activities may be
contracting neighboring facility, Sports International for the use of its
sports facilities by Hotel Bilkent clients. Hotel Bilkent should also buy new
fax, copy machines and computers for the use of clients. Its price and discount
policies are suitable for the needs of the clients. No change is required in
these policies. The most critical of the marketing mix elements of the hotel is
the promotion activity. First of all it should use personal selling in the
first plan since the special clients require special interest. The companies,
which have frequent businesses in Ankara, should be searched and the members of
the sales force should visit these firms and offer special prices and services
for them. The advertisements mentioned above should focus on the peaceful
atmosphere, educated staff, quality service and Bilkent image.
G) Projected
– Profit And Loss Statements:
If these action programs are
implemented carefully then the target market of businessmen and executives can
be captured. The long term marketing outcome of this is nearly 10% market share
among all five star hotels, and high occupancy rates. The financial outcome in
the short run is a normal rate of return on current investments. In the long
run the financial outcome of this stable and strong market position is a profit
which allows opening a new Hotel Bilkent at the center of the business and
economy, Istanbul. If Hotel Bilkent achieve its goal of becoming a premium
business hotel, then it should employ this value to create greater financial
values. The mean of this may be the licensing the Hotel Bilkent name or contracting to manage an
individual hotel under the name of Hotel Bilkent.
H) Control:
As a control mechanism of marketing
strategy of Hotel Bilkent, it should employ regular meetings among sales staff
to monitor the achievements of personal selling activities. It should also
carry out the queries and questionnaires to clients to measure the level of
satisfaction. However, this is hard especially if the customers are not much
vocal, and say their satisfaction level explicitly. Therefore, these
questionnaires should also be addressed to the clients after they leave the
hotel as a part of relationship marketing. The complaints and recommendations
of the clients are the primary source of getting feedback about the service
quality. In addition to that, one manager should also be employed to hear the
complaints and desires of the clients. As another control mechanism, occupancy
rates should be observed carefully, and any decrease in occupancy rates should
be examined in detail. Moreover, any change in the environment should also monitored
to see the new opportunities or threats. With these control mechanisms we can
assure the success of our marketing plan.