This is a marketing plan for The Hill Crest Inn Bed & Breakfast, which will be located near the St. Croix River in Stillwater, Minnesota. It is a fully furnished Victorian mansion with antiques, stained glass windows, and other design elements for the enjoyment of guests. The elegant mansion will be authentically renovated to look as it did in the 1890s. Customers look for a unique and fun place to stay whether they want to get away for a weekend or go on vacation. Accommodations and amenities offered by the bed and breakfast present a pleasant alternative to the big hotel chains.
Methods of presenting the Inn's advantages versus those of lodging competitors will be the focus. The significant growth of bed and breakfast establishments has been called one of the most influential innovations in the style of U. S. travel since the motel boom of World War II (Van Benthuysen, 1983). The marketing plan will be designed to attract a wide variety of consumers such as, honeymooners, baby boomers, adventure/health conscious people, and local patrons. The customers' ages will vary, but the targeted average household income will be $50,000 or above.
Tourist information shows that the stay in bed & breakfast facilities has gone up over 30 percent in the last few years (U.S. Bureau of Economic Analysis, 2010). As competition increases, owners of existing bed and breakfast establishments need information to help them make appropriate management decisions. People are looking for uniqueness as well as quality for accommodations, and this bed and breakfast will supply that to customers (Zander, 1986).
A study was conducted to determine tourist typologies and their desired attributes they consider when selecting a place to stay. "It is generally accepted that the tourist industry has to cater to tourists with a variety of disparate motivations and behavioral patterns" (Carr, 1998,p.309). The unique characteristics and charm that distinguishes a bed and breakfast from the hotel competition is clearly the primary reason for selecting this lodging option (Koth & Norman, 1989).
Why a Marketing Plan is Important
The hospitality industry requires innkeepers to be surrounded by people nearly all the time. Chatting with visitors and catering to others' needs invigorates innkeepers who enjoy working closely with people. Owning a bed and breakfast establishment sounds like it could be fun and easy, but the initial excitement sometimes overlooks the more serious and complex business of running an inn. While staying at an inn, a guest experiences the relaxing side of the bed and breakfast environment. He or she does not have the opportunity to see the inside view of this people intense industry. There is an abundance of paperwork, constant interruptions from guests, vendors, and mountains of laundry waiting to be finished each day.
The industry places heavy demands on innkeepers because they must spend a lot of time with their guests, and must be involved with every facet of daily business operations. A prerequisite for an innkeeper is to have patience and perseverance (Bell, Brown, Davies, & Hardy, 2004). Long hours must be invested and the innkeeper must have the ability to maintain composure when dealing with difficult customers. "One's success is about 15 percent financial due to technical knowledge and about 85 percent due to skill in human engineering to personality and the ability to lead people" (Carnegie, 1981, xiv).
An established marketing plan is an important precursor to opening a bed and breakfast. The entrepreneur should write a list of important information that will be needed to create a marketing plan (Hisrich, Peters, & Shepherd, 2010). The business plan will become a roadmap to chart the course of the business. A keen eye for target markets and a study of the competition are important elements in the established marketing plan.
An entrepreneur is defined as someone who organizes a business, assumes the responsibility, and the risk of running that enterprise (Pickett, 2004). When one decides to convert his or her home into a bed and breakfast, he or she becomes an entrepreneur. However, starting a new business does not make one rich overnight, and developing a business plan is an arduous task. The entrepreneur should have knowledge of the industry and a desire to develop a good service concept. It takes dedication and time to assemble the managerial, conceptual, financial, and physical components of a new business (Bangs & Axman, 2000). The key element for a successful entrepreneur is writing and implementing a plan geared toward his or her industry (Bangs, 1992; Knight & Knight, 1993; Mancuso, 1985; Osgood, 1980).
An important function of the business plan is to obtain financing (Bangs, 1992; Bradway & Pritchard, 1980; Legault, 1992; Sexton & Bowman-Upton, 1991). Most banks and lenders will require a formal business plan. The amount of research and time spent on the business plan can be an indicator to the success of the endeavor. Creating financial statements and a good marketing plan indicates a feasible business plan. The refusal of funding can result from deficiencies in these areas (Sexton & Bowman-Upton, 1991).
Brief history of the Bed and Breakfast Industry
During the eighteenth century, bed and breakfast establishments were very simple and consisted of private homes that would be open for a night's stay with a hot meal in the morning to start the day (Zane, 1997). People traveling in horse and buggies along well-traveled roads and pathways used inns as a place to rest. Industries moving westward increased the use and production of trains creating a demand for lodging. As people moved westward, the scattered settlements started to form small towns and large cities. The invention of the automobile transformed the country and gave people the ability to be mobile; long distance traveling was here to stay. This created a need for overnight accommodations such as small motels, hotels, and bed and breakfast establishments. The homey atmosphere and unique features offered by the bed and breakfast establishment made them more desirable to business travelers. The bed and breakfast conjures up images of comfort, extraordinary personal service, and a unique ambience.
The Bed and Breakfast industry is a vital part of the tourism industry, which provides accommodations to domestic and international visitors alike. The key to a successful bed and breakfast is its location and ability to attract visitors to a particular region. Accommodations differ from hotels and motels, and are viewed as highly personal, usually with intimate surroundings and individual attention from the proprietor (Stankus, 2004). The provision of private and comfortable accommodations with a gourmet breakfast is a key differentiator that sets the bed and breakfast industry apart from other forms of accommodations (Stankus, 2004).
Americans traveling to Europe have discovered bed and breakfast establishments (Callan & Bowman, 2000). Bed and breakfast establishments have been in Europe for centuries. This created an interest in bed and breakfast hotels in America. The bed and breakfast industry has begun to saturate the United States market, making it a formidable competitor of the hotel and motel market (Lanier, 2000). From 1987 to the early 1990s the number of operations open for business has more than tripled. At the moment there are over 25,000 bed and breakfast establishments in the United States (Arneson, 2010). They are no longer a low cost establishment, but an alternative to the standard hotel and motel chains. Bed and breakfast establishments are incorporating high-end amenities to compete with other lodging alternatives. The rooms are designed to give all the comforts of home plus additional luxuries such as a private bath with a Jacuzzi. These establishments also offer a social hour with complimentary snacks and beverages served upon arrival.
Marketing Strategies
Vision Statement
The vision statement should indicate what the firm wants to produce, distribute or sell (Melicher & Norton, 2000). The vision and mission statement should formulate, implement and evaluate crucial strategies (David, 2001). The vision plan should state the direction one is taking while answering the question "what do we want to become?" (David, 2001; Thompson, 2004). The vision plan should be linked to the values of the organization, it provides a clear decision making criteria.
The Hill Crest Inn Bed & Breakfast has a vision to create a unique property. The inn has a peaceful atmosphere while serving the customers with kindness and respect. Greeting guests with a warm smile and a pleasant attitude from the moment they enter the inn will set the tone for the guests visit.
The vision for the inn will be to take an older Victorian home and make an authentic renovation to look as if it were just built. Researching the history of the home allows the bed and breakfast proprietor to offer an environment steeped in history. The home will be furnished with authentic antiques and memorabilia from the time period. The original stained glass windows will be restored to their previous grandeur. Many new stained glass windows will be fabricated to replace the other uninspired windows. The sunlight reflecting through the colored glass will create a beautiful atmosphere. Across cultures and time, specific societal needs have changed and as a result have influenced the format of some bed and breakfast establishments. The current inn will meet the requirements of both old and young, and will blend the owner's personal style with furnishings from the Victorian era. It will showcase the owner's creative quilting, love of animals, and arts and crafts. The unique characteristics of the bed and breakfast will distinguish itself from hotels, motels and other bed and breakfast establishments (Peter & Donnelly, 2003).
Each room will have a different name and unique corresponding theme. The furnishings will create a certain ambience in each room. For example: one room will be called the St. Croix River Jewel Suite - this second-floor corner suite features a magnificent vaulted wooden ceiling with a glass chandelier, making the largest room feel even more unique. The king sized canopy bed faces the gas-burning fireplace. In this spacious room filled with afternoon sunlight, guests will find a comfortable camelback sofa, which sits in front of a fireplace. There is an antique writing desk where one may scribble some thoughts as he or she takes in the peaceful atmosphere. So that that you stay within this century, a slim-line digital flat-screen TV with a DVD/CD player, and an IPod connection are also included. These luxuries are necessary evils in today's society that would be easily forgotten in this little slice of heaven. Up a couple steps and you arrive at the luxurious bathroom. Covered with elegant Italian marble, the bathroom features a corner Jacuzzi-for-two and a two-person shower. The two-person shower also has a steam sauna with a marble seat. A cozy sitting room adjoins the bedroom, which features a refrigerator stocked with special goodies.
Patience and perseverance are vital tools when dealing with the guests. Innkeepers realize the need for people to get away from their hectic schedules and find a place to recharge themselves for a few days. The Hill Crest Inn Bed & Breakfast is dedicated to providing elegant sleeping and eating accommodations for people who wish to be pampered during their stay. The innkeeper will make the customers feel as if they are in their own home with their own personal attendant. The hospitality packages will offer a variety of items designed to pamper: scented soaps, designer shampoos, scented candles, private-label wines, homemade chocolate candies, and fresh fruit baskets. The innkeeper is committed to going beyond the call of duty to help all people associated with the business.
Customers as well as employees will be treated with fairness and respect. The inn's policy for mutual respect will be posted in areas easily seen by all. The policy will ensure that all are treated with respect and dignity. This policy includes guests as well as employees. Strict adherence to these rules will ensure a pleasant experience for all concerned in these matters.
Mission Statement
The mission statement will define the organization's purpose and primary objectives (David, 2001). The primary function is internal which defines the key measure or measures of the organization's success and its prime audience is the proprietor and their employees. Firms that create a mission statement have twice the return on stockholder's equity (David, 2001). The Hill Crest Inn's Mission statement is identified as follows:
The Hill Crest Inn Bed & Breakfast will offer luxury accommodations unparalleled by any in Minnesota. The luxurious accommodations, peaceful atmosphere, and great staff will leave visitors with an unforgettable experience. A stay at the inn will relax and enrich a person's spirit and feeling of well-being.
Goals
Business goals and objectives should be measurable, concrete, and concise (Lipton, 1996). Goals and objectives explain what a company stands for or what guides their behavior. To be successful an organization should set goals and objectives that are realistic and achievable (Smith, 1995).
Becoming a member of the Minnesota Bed and Breakfast Association (MBBA) is a goal to be attained within the first year. Membership is achieved through submission of a written application and the required fee of three hundred forty dollars. Acceptance into the MBBA will ensure cleanliness and inspection of the inn. When accepted into the MBBA you will be required to have a quality assurance inspection of the inn. The inspection costs a onetime fee of three hundred dollars and is valid for as long as the owner remains a member of the MBBA. The inn will receive a certificate and it will be displayed in the lobby designating the inn as a member of the MBBA. As a member of the MBBA the innkeeper will have access to a list of vendors that specialize in business with small inns. The inn will be published in the consumer web site http://www.minnesotabedandbreakfasts.org, which hosts thousands of visitors and gives them a direct link to your inn. This website also includes a blog area for sharing specials and community events in ones area to promote the individual efforts of MBBA members. The MBBA provides annual guidebooks featuring each member, with full descriptions and color photos. The guidebook is distributed through the Minnesota State Office Of Tourism rest stops, as well as the city chamber of commerce, libraries, coffee shops and of course member inns. The guidebook has over 50,000 in annual circulation. This is a great tool for marketing the Hill Crest Inn Bed and Breakfast.
To be a viable business in today's economy one needs to consider how to make a profit. To increase the bed and breakfast occupancy rate from only 25 percent to 40-50 percent in the next five years would be big accomplishment. The start-up expenses for this home based business are very high. To counter these regular monthly bills more customers are needed.
To increase the amount of reservations at ones bed and breakfast establishment, the inn needs to have a complete website. The website should be neat, organized, and supply all necessary information a guest would need. It needs to be neatly organized and navigable to have a successful online presence. The site will guide the viewer through the website with links throughout the page with useful content. Use call to action wording such as: click here to see our beautiful rooms with a view or find out why you should stay with us to increase the likelihood of a booking on the website. The information should encourage viewers to come and stay with the inn. Provide enough opportunities for guests to make a reservation by placing a link to the booking area on every page (Scott, 2010). Use persuasive anchor text such as: click here to contact us or book your relaxing stay in one of our beautiful rooms now (Scott, 2010). The use of persuasive anchors will also increase the likelihood of a booking.
The website should encourage a sense of urgency when it comes to bookings. Imperatives are a great way to help the prospective traveler to book a reservation right now. Use phrases such as: book now to avoid the summer rush or take advantage of the special promotions now to encourage a decision immediately. This creates a sense of urgency that will likely improve the number of inquiries one gets. Have good quality photos of every room on the website, pictures will sell the property. Pictures are a good way of showing guests the type of quality they can expect from the bed and breakfast. It is important to thoroughly test the website on different platforms. Ensure that the website design will load properly with different web browsers; this will maximize its use.
To be the boss, to be a successful entrepreneur, and to make a profit within five years are the main goals. Running a business will allow complete control over all work-related activities. To start ones own business and to build it from the ground up can be very satisfying. Creating a business that a person is passionate about will pay the proprietor in dividends of happiness and joy. Hospitality is the key to keeping guests happy, and a good method of getting repeat business.
Objectives
The plans objectives state the most important points to help ensure the success of the business. Business objectives should describe a specific action, give direction, establish long term priorities, and facilitate management control (Peter & Donnelly, 2000).
1. Open the Hill Crest Inn Bed and Breakfast as a "turn key operation" with new bookings.
2. Demonstrate a minimum of 25% occupancy averaged throughout the first year.
3. Increase exposure and market using Internet technology and direct advertising to Minnesota and the surrounding States.
4. Through incentives and increased exposure on the Internet, one hopes to increase off¬season occupancy by 20% the first year.
5. Increase off-season occupancy by diversity of uses for property (catering, wedding receptions, weekend quilting retreats, etc.).
SWOT Analysis
The development of any organization can be seen in the SWOT analysis of the bed and breakfast's strengths, weaknesses, opportunities, and threats (Shimp, 2000). A SWOT analysis is a subjective assessment of relative data, which is organized by a format into a logical order that helps one with understanding, discussions, and the decision-making process for a business. When creating a SWOT analysis, internal and external factors that are favorable or unfavorable will need to be identified to achieve that objective. The SWOT Analysis can be a powerful technique used to identify strengths, weaknesses, opportunities and threats that may be encountered by a business. The SWOT analysis is one of the most important steps in formulating the business strategy. In using the SWOT structure, a strategy can be developed that helps to differentiate a business from its competitors. Comparing a business to others in the local area will help a new company to compete successfully in the chosen market. This will help to focus on strengths, minimize threats, and to take advantage of opportunities available for the business. In SWOT analysis, the best strategies will help accomplish an organization's mission by exploiting their opportunities and strengths while neutralizing their threats and avoiding its weaknesses (Griffin, 2003).
Strategic planning has never been a precise science; it is more a matter of a pragmatic choices used to help identify and explain the issues of a business or a competitor. The four headings under the SWOT analysis will provide a framework for reviewing strategies, company position, and the direction a business could take. This presents a practical way of assimilating the internal and external information about the business and delineates short and long-term priorities.
Strengths
• existing as a unique, high quality bed and breakfast
• choosing a great location
• the use of internet web sites to reach international markets
A major strength of the Hill Crest Inn Bed and Breakfast is the unique, high quality establishment. Creating different but consistent and related themes for each room at the bed and breakfast instills an interest in the unique facility. Guest's use of the communal rooms gives them a chance to socialize with the host, family, and the other guests. Catering to the needs of the guests with attention to personal service and satisfying their expectations will create repeat customers.
The location that is chosen for a future bed and breakfast is one of the most important decisions a business owner will need to make. The location of a bed and breakfast can have a significant influence on the cash flow that can make or break a business. Having a bed and breakfast that is easy to find for guests, and offering a peaceful atmosphere will influence people to visit the Inn (Rogak, 1995). The location is minutes from shopping, dining, hiking trails, museums, historical and recreation sites for water sports, etc., (Zander, 1986).
A strength of The Hill Crest Inn Bed & Breakfast is that it is in a prime location. Being close to a major city, and located near a large body of water, gives the business establishment a perfect setting. The state park and walking/hiking trail next door gives guests other activities to choose from. The locations accessibility and many attractions will add to the marketability of the bed and breakfast. Whether it is a historical building or a newer building does not matter as long as the accommodations are easy to access for families wanting to get away for a weekend
trip. This will bring more frequent weekend trips preferred by many two-income families (Koth & Norman, 1989).
The use of internet will help in marketing the bed and breakfast on an international scale. The website should have all the information a guest will need. Successful websites are neatly organized and are easy to navigate. Ensure that the B&B is easy to contact by posting a phone number and e-mail address on every page. The inn will answer questions promptly when contacted. People who make inquiries are the most promising potential customers. All inquiries will be handled promptly and with the information requested. Posting positive comments from the guest book on the website will put people at ease when making a reservation. This is a great way to inspire trust in future clients. The positive comments posted will instill confidence in the new customer that they too will have a great time at the bed and breakfast establishment.
Weaknesses
• insufficient money for long term advertising
• limited resources restricting growth opportunities when compared to larger competitors
• small size and a limited number of rooms limiting amount of sales
The Hill Crest Inn Bed & Breakfast is a nice sized establishment, however it does not have unlimited funds to advertise on a continual basis. Local advertising is done yearly to attract local or short stay trips from people in the area. Major advertising is done seasonally and for special occasions such as Christmas, New Years, and Valentines Day. Limited resources are a weakness, but this can be turned into an advantage by servicing the needs of the guests efficiently and by creating a wonderful atmosphere. Satisfied customers will spread the word about their pleasant stay with the inn, and that will create new business. Hospitality and customer service play a big role in this industry. Joining the local chapter of bed and breakfasts in the Stillwater area can make advertising easier since you can advertise as a group. Being active in the local area as a community advocate can make the business more of a success. To create local business the inn will be contacting local residents. The local neighborhood will be saturated with the bed and breakfasts brochures detailing the wonderful new addition to their community. The brochure will announce the arrival of the inn, and promote it as an alternative to hotels for their visiting friends or relatives.
The small size and limited number of rooms affects the amount of sales to be made for a bed and breakfast establishment. The bed and breakfast has only nine rooms, so it limits the amount of money to be made yearly. With limited funds for advertising, there are ways to increase awareness of the bed and breakfast without spending a lot of money such as using a blog site (Scott, 2010).
Opportunities
• people are not traveling as far to get away for a vacation
• marketing to baby boomers, a vast growing segment
• growing market with a significant percentage still not aware of the Hill Crest Inn Bed & Breakfast
• promote discounts for loyal customers
The economy has a major effect on people planning vacations and weekend jaunts. People are not traveling as far on their vacations, so the bed and breakfast is the perfect choice for many. Advertising in the local market is a key to attracting these local travelers. People are staying closer to home to save on gas and other expenses. Advertising a few hundred miles outside the area can increase occupancy for the inn. Americans are reacting to the economy by staying closer to home and taking shorter trips. Short trips tend to be more relaxing. People can be regenerated while traveling only a short distance to their little slice of heaven. A vacation spent locally can be more relaxing many times. The stress of the long trip is eliminated and all that remains is to rest and enjoy the atmosphere of the great inn.
Marketing has been described as the process of pointing out the chief qualities, visualizing an outcome, creating, and fulfilling a customer's needs and wants for products and/or services (David, 1989). Over two-thirds of retired baby boomers are choosing to travel (Lang, 2001). Marketing to the baby boomers could be one of the biggest market segments for an inn. A product marketed to the 50-60 plus audiences should increase in sales by 35-50 percent in the next 20 years based on population and growth trends (Adler, 2002).
Middle age is where the action is for the next 15 years. Not only are 76 million baby boomers beginning to move into their 50s, but they also have discretionary income to spend. According to an Age Wave analysis, by the year 2000, heads of household's ages 45-54 will increase their annual expenditures by 36 percent. At the same time, the 65-plus populations will probably be close to 40 or 45 million in size (Dychtwald, 2002). Baby boomer marketing should focus on appealing to areas that interest them such as health, lifestyles, nostalgia, family values, relationships with friends and family, and expensive hobbies. "The typical traveler who chooses to stay at a bed and breakfast is affluent, well educated, somewhat free-spending, and has a high degree of control over his or her personal time" (Zane, 1997, p69). Over two-thirds of the retired baby boomers are choosing to travel (Lang, 2001). Money can be made by paying attention to the needs and concerns of the various segments of the 50-60 plus year old groups. The baby boomer generation's disparities are as great as their similarities as a result of the age spread within this large group (Dailey, 1998). Retired baby boomers can have the largest impact on revenue for the B&B. They possess the financial resources and the most time for travel.
The internet presents an opportunity to reach the international market. The internet has enabled companies to cut costs and to pass those savings on to customers. Communication with customers, suppliers, and creditors is done instantaneously and is very inexpensive (Mullaney & Green, 2003). Thousands of new customers and businesses are coming online around the world everyday. Anyone can have access to it, surf the web site, and make reservations on line. The web site will show pictures of the rooms and a brief history of the Inn and a list of tourist attractions.
Loyalty marketing has become a main stay to retain customers in many industries. Companies offer rewards for frequent customers programs; customers have come to expect them and compare benefits and rewards. A bed and breakfast can make offers to frequent guests to keep them coming back. All forms of media advertising can be utilized when promoting the inns services.
Threats
• new laws affecting bed and breakfast establishments
• competition from other bed and breakfast establishments
• a slump in the economy, decreasing people's discretionary income When a bed and breakfast opens its doors, research needs to be done concerning regulations for required permits and licenses.
Other important considerations in this business are types of insurance needed, legal descriptions of the property, and does the inn need advisors such as lawyers and accountants (Perry, 2001; Singhvi, 2000). Working with the local community is a good way to keep informed on changing regulations. Building a good community profile can also help the business. Other bed and breakfast owners may not be active and it will benefit the business by being connected to the community.
Patrons of bed and breakfast's are not only looking for a room, they want the whole experience of exceptional service, a relaxing environment, and hospitality (Dawson & Brown, 1988; Hirschman, 1993; Thornberry, 1993). Customers desire a beautiful setting, new and interesting people to chat with, and staff present to pamper them in any way possible. Staying ahead of the competition with the best service is very important.
Competition from other bed and breakfast establishments in the area needs to be researched. To determine if the new venture is better than the competition an analysis of the industry needs to be done (Bangs, 1992; McLaughlin, 1985; Osgood, 1980). To help create and promote a core customer base, the Hill Crest Inn must provide excellent customer service to stand out from the competition (Ramaswani, 2006).
Tourism can be severely affected by the economy. Many issues such as finances, distance traveled, and family size will be considered when planning a trip. Traveling to a particular spot includes consideration such as fast food chains, restaurants, shops, and special events. It is rare for one business to provide all of the activities needed or desired. A slump in the economy decreases people's discretionary income making it more difficult to travel very far from home. To overcome this hurdle, tourism related businesses, agencies, and other organizations could get together and work toward a common goal of attracting customers to the local area.
SWOT Analysis
Strengths
• existing as a unique, high quality bed and breakfast
• great location
• the use of Internet web sites to reach international markets
• owners who are passionate about their work Opportunities
• upscale clientele market, likely to be stable
• people are not traveling as far to get away for a vacation
• growing market with a significant percentage still not aware of the Hill Crest Inn Bed & Breakfast
• marketing to baby boomers, a vast growing segment
• promote discounts for loyal customers
Weaknesses
• inadequate money for long term advertising
• limited resources restricting growth opportunities when compared to larger competitors
• small size and a limited number of rooms limiting amount of sales Threats
• New Laws affecting bed and breakfast establishments
• Large hotel chains
• Competition from other bed and breakfast establishments
• A slump in the economy, decreasing people's discretionary income
Methods of presenting the Inn's advantages versus those of lodging competitors will be the focus. The significant growth of bed and breakfast establishments has been called one of the most influential innovations in the style of U. S. travel since the motel boom of World War II (Van Benthuysen, 1983). The marketing plan will be designed to attract a wide variety of consumers such as, honeymooners, baby boomers, adventure/health conscious people, and local patrons. The customers' ages will vary, but the targeted average household income will be $50,000 or above.
Tourist information shows that the stay in bed & breakfast facilities has gone up over 30 percent in the last few years (U.S. Bureau of Economic Analysis, 2010). As competition increases, owners of existing bed and breakfast establishments need information to help them make appropriate management decisions. People are looking for uniqueness as well as quality for accommodations, and this bed and breakfast will supply that to customers (Zander, 1986).
A study was conducted to determine tourist typologies and their desired attributes they consider when selecting a place to stay. "It is generally accepted that the tourist industry has to cater to tourists with a variety of disparate motivations and behavioral patterns" (Carr, 1998,p.309). The unique characteristics and charm that distinguishes a bed and breakfast from the hotel competition is clearly the primary reason for selecting this lodging option (Koth & Norman, 1989).
Why a Marketing Plan is Important
The hospitality industry requires innkeepers to be surrounded by people nearly all the time. Chatting with visitors and catering to others' needs invigorates innkeepers who enjoy working closely with people. Owning a bed and breakfast establishment sounds like it could be fun and easy, but the initial excitement sometimes overlooks the more serious and complex business of running an inn. While staying at an inn, a guest experiences the relaxing side of the bed and breakfast environment. He or she does not have the opportunity to see the inside view of this people intense industry. There is an abundance of paperwork, constant interruptions from guests, vendors, and mountains of laundry waiting to be finished each day.
The industry places heavy demands on innkeepers because they must spend a lot of time with their guests, and must be involved with every facet of daily business operations. A prerequisite for an innkeeper is to have patience and perseverance (Bell, Brown, Davies, & Hardy, 2004). Long hours must be invested and the innkeeper must have the ability to maintain composure when dealing with difficult customers. "One's success is about 15 percent financial due to technical knowledge and about 85 percent due to skill in human engineering to personality and the ability to lead people" (Carnegie, 1981, xiv).
An established marketing plan is an important precursor to opening a bed and breakfast. The entrepreneur should write a list of important information that will be needed to create a marketing plan (Hisrich, Peters, & Shepherd, 2010). The business plan will become a roadmap to chart the course of the business. A keen eye for target markets and a study of the competition are important elements in the established marketing plan.
An entrepreneur is defined as someone who organizes a business, assumes the responsibility, and the risk of running that enterprise (Pickett, 2004). When one decides to convert his or her home into a bed and breakfast, he or she becomes an entrepreneur. However, starting a new business does not make one rich overnight, and developing a business plan is an arduous task. The entrepreneur should have knowledge of the industry and a desire to develop a good service concept. It takes dedication and time to assemble the managerial, conceptual, financial, and physical components of a new business (Bangs & Axman, 2000). The key element for a successful entrepreneur is writing and implementing a plan geared toward his or her industry (Bangs, 1992; Knight & Knight, 1993; Mancuso, 1985; Osgood, 1980).
An important function of the business plan is to obtain financing (Bangs, 1992; Bradway & Pritchard, 1980; Legault, 1992; Sexton & Bowman-Upton, 1991). Most banks and lenders will require a formal business plan. The amount of research and time spent on the business plan can be an indicator to the success of the endeavor. Creating financial statements and a good marketing plan indicates a feasible business plan. The refusal of funding can result from deficiencies in these areas (Sexton & Bowman-Upton, 1991).
Brief history of the Bed and Breakfast Industry
During the eighteenth century, bed and breakfast establishments were very simple and consisted of private homes that would be open for a night's stay with a hot meal in the morning to start the day (Zane, 1997). People traveling in horse and buggies along well-traveled roads and pathways used inns as a place to rest. Industries moving westward increased the use and production of trains creating a demand for lodging. As people moved westward, the scattered settlements started to form small towns and large cities. The invention of the automobile transformed the country and gave people the ability to be mobile; long distance traveling was here to stay. This created a need for overnight accommodations such as small motels, hotels, and bed and breakfast establishments. The homey atmosphere and unique features offered by the bed and breakfast establishment made them more desirable to business travelers. The bed and breakfast conjures up images of comfort, extraordinary personal service, and a unique ambience.
The Bed and Breakfast industry is a vital part of the tourism industry, which provides accommodations to domestic and international visitors alike. The key to a successful bed and breakfast is its location and ability to attract visitors to a particular region. Accommodations differ from hotels and motels, and are viewed as highly personal, usually with intimate surroundings and individual attention from the proprietor (Stankus, 2004). The provision of private and comfortable accommodations with a gourmet breakfast is a key differentiator that sets the bed and breakfast industry apart from other forms of accommodations (Stankus, 2004).
Americans traveling to Europe have discovered bed and breakfast establishments (Callan & Bowman, 2000). Bed and breakfast establishments have been in Europe for centuries. This created an interest in bed and breakfast hotels in America. The bed and breakfast industry has begun to saturate the United States market, making it a formidable competitor of the hotel and motel market (Lanier, 2000). From 1987 to the early 1990s the number of operations open for business has more than tripled. At the moment there are over 25,000 bed and breakfast establishments in the United States (Arneson, 2010). They are no longer a low cost establishment, but an alternative to the standard hotel and motel chains. Bed and breakfast establishments are incorporating high-end amenities to compete with other lodging alternatives. The rooms are designed to give all the comforts of home plus additional luxuries such as a private bath with a Jacuzzi. These establishments also offer a social hour with complimentary snacks and beverages served upon arrival.
Marketing Strategies
Vision Statement
The vision statement should indicate what the firm wants to produce, distribute or sell (Melicher & Norton, 2000). The vision and mission statement should formulate, implement and evaluate crucial strategies (David, 2001). The vision plan should state the direction one is taking while answering the question "what do we want to become?" (David, 2001; Thompson, 2004). The vision plan should be linked to the values of the organization, it provides a clear decision making criteria.
The Hill Crest Inn Bed & Breakfast has a vision to create a unique property. The inn has a peaceful atmosphere while serving the customers with kindness and respect. Greeting guests with a warm smile and a pleasant attitude from the moment they enter the inn will set the tone for the guests visit.
The vision for the inn will be to take an older Victorian home and make an authentic renovation to look as if it were just built. Researching the history of the home allows the bed and breakfast proprietor to offer an environment steeped in history. The home will be furnished with authentic antiques and memorabilia from the time period. The original stained glass windows will be restored to their previous grandeur. Many new stained glass windows will be fabricated to replace the other uninspired windows. The sunlight reflecting through the colored glass will create a beautiful atmosphere. Across cultures and time, specific societal needs have changed and as a result have influenced the format of some bed and breakfast establishments. The current inn will meet the requirements of both old and young, and will blend the owner's personal style with furnishings from the Victorian era. It will showcase the owner's creative quilting, love of animals, and arts and crafts. The unique characteristics of the bed and breakfast will distinguish itself from hotels, motels and other bed and breakfast establishments (Peter & Donnelly, 2003).
Each room will have a different name and unique corresponding theme. The furnishings will create a certain ambience in each room. For example: one room will be called the St. Croix River Jewel Suite - this second-floor corner suite features a magnificent vaulted wooden ceiling with a glass chandelier, making the largest room feel even more unique. The king sized canopy bed faces the gas-burning fireplace. In this spacious room filled with afternoon sunlight, guests will find a comfortable camelback sofa, which sits in front of a fireplace. There is an antique writing desk where one may scribble some thoughts as he or she takes in the peaceful atmosphere. So that that you stay within this century, a slim-line digital flat-screen TV with a DVD/CD player, and an IPod connection are also included. These luxuries are necessary evils in today's society that would be easily forgotten in this little slice of heaven. Up a couple steps and you arrive at the luxurious bathroom. Covered with elegant Italian marble, the bathroom features a corner Jacuzzi-for-two and a two-person shower. The two-person shower also has a steam sauna with a marble seat. A cozy sitting room adjoins the bedroom, which features a refrigerator stocked with special goodies.
Patience and perseverance are vital tools when dealing with the guests. Innkeepers realize the need for people to get away from their hectic schedules and find a place to recharge themselves for a few days. The Hill Crest Inn Bed & Breakfast is dedicated to providing elegant sleeping and eating accommodations for people who wish to be pampered during their stay. The innkeeper will make the customers feel as if they are in their own home with their own personal attendant. The hospitality packages will offer a variety of items designed to pamper: scented soaps, designer shampoos, scented candles, private-label wines, homemade chocolate candies, and fresh fruit baskets. The innkeeper is committed to going beyond the call of duty to help all people associated with the business.
Customers as well as employees will be treated with fairness and respect. The inn's policy for mutual respect will be posted in areas easily seen by all. The policy will ensure that all are treated with respect and dignity. This policy includes guests as well as employees. Strict adherence to these rules will ensure a pleasant experience for all concerned in these matters.
Mission Statement
The mission statement will define the organization's purpose and primary objectives (David, 2001). The primary function is internal which defines the key measure or measures of the organization's success and its prime audience is the proprietor and their employees. Firms that create a mission statement have twice the return on stockholder's equity (David, 2001). The Hill Crest Inn's Mission statement is identified as follows:
The Hill Crest Inn Bed & Breakfast will offer luxury accommodations unparalleled by any in Minnesota. The luxurious accommodations, peaceful atmosphere, and great staff will leave visitors with an unforgettable experience. A stay at the inn will relax and enrich a person's spirit and feeling of well-being.
Goals
Business goals and objectives should be measurable, concrete, and concise (Lipton, 1996). Goals and objectives explain what a company stands for or what guides their behavior. To be successful an organization should set goals and objectives that are realistic and achievable (Smith, 1995).
Becoming a member of the Minnesota Bed and Breakfast Association (MBBA) is a goal to be attained within the first year. Membership is achieved through submission of a written application and the required fee of three hundred forty dollars. Acceptance into the MBBA will ensure cleanliness and inspection of the inn. When accepted into the MBBA you will be required to have a quality assurance inspection of the inn. The inspection costs a onetime fee of three hundred dollars and is valid for as long as the owner remains a member of the MBBA. The inn will receive a certificate and it will be displayed in the lobby designating the inn as a member of the MBBA. As a member of the MBBA the innkeeper will have access to a list of vendors that specialize in business with small inns. The inn will be published in the consumer web site http://www.minnesotabedandbreakfasts.org, which hosts thousands of visitors and gives them a direct link to your inn. This website also includes a blog area for sharing specials and community events in ones area to promote the individual efforts of MBBA members. The MBBA provides annual guidebooks featuring each member, with full descriptions and color photos. The guidebook is distributed through the Minnesota State Office Of Tourism rest stops, as well as the city chamber of commerce, libraries, coffee shops and of course member inns. The guidebook has over 50,000 in annual circulation. This is a great tool for marketing the Hill Crest Inn Bed and Breakfast.
To be a viable business in today's economy one needs to consider how to make a profit. To increase the bed and breakfast occupancy rate from only 25 percent to 40-50 percent in the next five years would be big accomplishment. The start-up expenses for this home based business are very high. To counter these regular monthly bills more customers are needed.
To increase the amount of reservations at ones bed and breakfast establishment, the inn needs to have a complete website. The website should be neat, organized, and supply all necessary information a guest would need. It needs to be neatly organized and navigable to have a successful online presence. The site will guide the viewer through the website with links throughout the page with useful content. Use call to action wording such as: click here to see our beautiful rooms with a view or find out why you should stay with us to increase the likelihood of a booking on the website. The information should encourage viewers to come and stay with the inn. Provide enough opportunities for guests to make a reservation by placing a link to the booking area on every page (Scott, 2010). Use persuasive anchor text such as: click here to contact us or book your relaxing stay in one of our beautiful rooms now (Scott, 2010). The use of persuasive anchors will also increase the likelihood of a booking.
The website should encourage a sense of urgency when it comes to bookings. Imperatives are a great way to help the prospective traveler to book a reservation right now. Use phrases such as: book now to avoid the summer rush or take advantage of the special promotions now to encourage a decision immediately. This creates a sense of urgency that will likely improve the number of inquiries one gets. Have good quality photos of every room on the website, pictures will sell the property. Pictures are a good way of showing guests the type of quality they can expect from the bed and breakfast. It is important to thoroughly test the website on different platforms. Ensure that the website design will load properly with different web browsers; this will maximize its use.
To be the boss, to be a successful entrepreneur, and to make a profit within five years are the main goals. Running a business will allow complete control over all work-related activities. To start ones own business and to build it from the ground up can be very satisfying. Creating a business that a person is passionate about will pay the proprietor in dividends of happiness and joy. Hospitality is the key to keeping guests happy, and a good method of getting repeat business.
Objectives
The plans objectives state the most important points to help ensure the success of the business. Business objectives should describe a specific action, give direction, establish long term priorities, and facilitate management control (Peter & Donnelly, 2000).
1. Open the Hill Crest Inn Bed and Breakfast as a "turn key operation" with new bookings.
2. Demonstrate a minimum of 25% occupancy averaged throughout the first year.
3. Increase exposure and market using Internet technology and direct advertising to Minnesota and the surrounding States.
4. Through incentives and increased exposure on the Internet, one hopes to increase off¬season occupancy by 20% the first year.
5. Increase off-season occupancy by diversity of uses for property (catering, wedding receptions, weekend quilting retreats, etc.).
SWOT Analysis
The development of any organization can be seen in the SWOT analysis of the bed and breakfast's strengths, weaknesses, opportunities, and threats (Shimp, 2000). A SWOT analysis is a subjective assessment of relative data, which is organized by a format into a logical order that helps one with understanding, discussions, and the decision-making process for a business. When creating a SWOT analysis, internal and external factors that are favorable or unfavorable will need to be identified to achieve that objective. The SWOT Analysis can be a powerful technique used to identify strengths, weaknesses, opportunities and threats that may be encountered by a business. The SWOT analysis is one of the most important steps in formulating the business strategy. In using the SWOT structure, a strategy can be developed that helps to differentiate a business from its competitors. Comparing a business to others in the local area will help a new company to compete successfully in the chosen market. This will help to focus on strengths, minimize threats, and to take advantage of opportunities available for the business. In SWOT analysis, the best strategies will help accomplish an organization's mission by exploiting their opportunities and strengths while neutralizing their threats and avoiding its weaknesses (Griffin, 2003).
Strategic planning has never been a precise science; it is more a matter of a pragmatic choices used to help identify and explain the issues of a business or a competitor. The four headings under the SWOT analysis will provide a framework for reviewing strategies, company position, and the direction a business could take. This presents a practical way of assimilating the internal and external information about the business and delineates short and long-term priorities.
Strengths
• existing as a unique, high quality bed and breakfast
• choosing a great location
• the use of internet web sites to reach international markets
A major strength of the Hill Crest Inn Bed and Breakfast is the unique, high quality establishment. Creating different but consistent and related themes for each room at the bed and breakfast instills an interest in the unique facility. Guest's use of the communal rooms gives them a chance to socialize with the host, family, and the other guests. Catering to the needs of the guests with attention to personal service and satisfying their expectations will create repeat customers.
The location that is chosen for a future bed and breakfast is one of the most important decisions a business owner will need to make. The location of a bed and breakfast can have a significant influence on the cash flow that can make or break a business. Having a bed and breakfast that is easy to find for guests, and offering a peaceful atmosphere will influence people to visit the Inn (Rogak, 1995). The location is minutes from shopping, dining, hiking trails, museums, historical and recreation sites for water sports, etc., (Zander, 1986).
A strength of The Hill Crest Inn Bed & Breakfast is that it is in a prime location. Being close to a major city, and located near a large body of water, gives the business establishment a perfect setting. The state park and walking/hiking trail next door gives guests other activities to choose from. The locations accessibility and many attractions will add to the marketability of the bed and breakfast. Whether it is a historical building or a newer building does not matter as long as the accommodations are easy to access for families wanting to get away for a weekend
trip. This will bring more frequent weekend trips preferred by many two-income families (Koth & Norman, 1989).
The use of internet will help in marketing the bed and breakfast on an international scale. The website should have all the information a guest will need. Successful websites are neatly organized and are easy to navigate. Ensure that the B&B is easy to contact by posting a phone number and e-mail address on every page. The inn will answer questions promptly when contacted. People who make inquiries are the most promising potential customers. All inquiries will be handled promptly and with the information requested. Posting positive comments from the guest book on the website will put people at ease when making a reservation. This is a great way to inspire trust in future clients. The positive comments posted will instill confidence in the new customer that they too will have a great time at the bed and breakfast establishment.
Weaknesses
• insufficient money for long term advertising
• limited resources restricting growth opportunities when compared to larger competitors
• small size and a limited number of rooms limiting amount of sales
The Hill Crest Inn Bed & Breakfast is a nice sized establishment, however it does not have unlimited funds to advertise on a continual basis. Local advertising is done yearly to attract local or short stay trips from people in the area. Major advertising is done seasonally and for special occasions such as Christmas, New Years, and Valentines Day. Limited resources are a weakness, but this can be turned into an advantage by servicing the needs of the guests efficiently and by creating a wonderful atmosphere. Satisfied customers will spread the word about their pleasant stay with the inn, and that will create new business. Hospitality and customer service play a big role in this industry. Joining the local chapter of bed and breakfasts in the Stillwater area can make advertising easier since you can advertise as a group. Being active in the local area as a community advocate can make the business more of a success. To create local business the inn will be contacting local residents. The local neighborhood will be saturated with the bed and breakfasts brochures detailing the wonderful new addition to their community. The brochure will announce the arrival of the inn, and promote it as an alternative to hotels for their visiting friends or relatives.
The small size and limited number of rooms affects the amount of sales to be made for a bed and breakfast establishment. The bed and breakfast has only nine rooms, so it limits the amount of money to be made yearly. With limited funds for advertising, there are ways to increase awareness of the bed and breakfast without spending a lot of money such as using a blog site (Scott, 2010).
Opportunities
• people are not traveling as far to get away for a vacation
• marketing to baby boomers, a vast growing segment
• growing market with a significant percentage still not aware of the Hill Crest Inn Bed & Breakfast
• promote discounts for loyal customers
The economy has a major effect on people planning vacations and weekend jaunts. People are not traveling as far on their vacations, so the bed and breakfast is the perfect choice for many. Advertising in the local market is a key to attracting these local travelers. People are staying closer to home to save on gas and other expenses. Advertising a few hundred miles outside the area can increase occupancy for the inn. Americans are reacting to the economy by staying closer to home and taking shorter trips. Short trips tend to be more relaxing. People can be regenerated while traveling only a short distance to their little slice of heaven. A vacation spent locally can be more relaxing many times. The stress of the long trip is eliminated and all that remains is to rest and enjoy the atmosphere of the great inn.
Marketing has been described as the process of pointing out the chief qualities, visualizing an outcome, creating, and fulfilling a customer's needs and wants for products and/or services (David, 1989). Over two-thirds of retired baby boomers are choosing to travel (Lang, 2001). Marketing to the baby boomers could be one of the biggest market segments for an inn. A product marketed to the 50-60 plus audiences should increase in sales by 35-50 percent in the next 20 years based on population and growth trends (Adler, 2002).
Middle age is where the action is for the next 15 years. Not only are 76 million baby boomers beginning to move into their 50s, but they also have discretionary income to spend. According to an Age Wave analysis, by the year 2000, heads of household's ages 45-54 will increase their annual expenditures by 36 percent. At the same time, the 65-plus populations will probably be close to 40 or 45 million in size (Dychtwald, 2002). Baby boomer marketing should focus on appealing to areas that interest them such as health, lifestyles, nostalgia, family values, relationships with friends and family, and expensive hobbies. "The typical traveler who chooses to stay at a bed and breakfast is affluent, well educated, somewhat free-spending, and has a high degree of control over his or her personal time" (Zane, 1997, p69). Over two-thirds of the retired baby boomers are choosing to travel (Lang, 2001). Money can be made by paying attention to the needs and concerns of the various segments of the 50-60 plus year old groups. The baby boomer generation's disparities are as great as their similarities as a result of the age spread within this large group (Dailey, 1998). Retired baby boomers can have the largest impact on revenue for the B&B. They possess the financial resources and the most time for travel.
The internet presents an opportunity to reach the international market. The internet has enabled companies to cut costs and to pass those savings on to customers. Communication with customers, suppliers, and creditors is done instantaneously and is very inexpensive (Mullaney & Green, 2003). Thousands of new customers and businesses are coming online around the world everyday. Anyone can have access to it, surf the web site, and make reservations on line. The web site will show pictures of the rooms and a brief history of the Inn and a list of tourist attractions.
Loyalty marketing has become a main stay to retain customers in many industries. Companies offer rewards for frequent customers programs; customers have come to expect them and compare benefits and rewards. A bed and breakfast can make offers to frequent guests to keep them coming back. All forms of media advertising can be utilized when promoting the inns services.
Threats
• new laws affecting bed and breakfast establishments
• competition from other bed and breakfast establishments
• a slump in the economy, decreasing people's discretionary income When a bed and breakfast opens its doors, research needs to be done concerning regulations for required permits and licenses.
Other important considerations in this business are types of insurance needed, legal descriptions of the property, and does the inn need advisors such as lawyers and accountants (Perry, 2001; Singhvi, 2000). Working with the local community is a good way to keep informed on changing regulations. Building a good community profile can also help the business. Other bed and breakfast owners may not be active and it will benefit the business by being connected to the community.
Patrons of bed and breakfast's are not only looking for a room, they want the whole experience of exceptional service, a relaxing environment, and hospitality (Dawson & Brown, 1988; Hirschman, 1993; Thornberry, 1993). Customers desire a beautiful setting, new and interesting people to chat with, and staff present to pamper them in any way possible. Staying ahead of the competition with the best service is very important.
Competition from other bed and breakfast establishments in the area needs to be researched. To determine if the new venture is better than the competition an analysis of the industry needs to be done (Bangs, 1992; McLaughlin, 1985; Osgood, 1980). To help create and promote a core customer base, the Hill Crest Inn must provide excellent customer service to stand out from the competition (Ramaswani, 2006).
Tourism can be severely affected by the economy. Many issues such as finances, distance traveled, and family size will be considered when planning a trip. Traveling to a particular spot includes consideration such as fast food chains, restaurants, shops, and special events. It is rare for one business to provide all of the activities needed or desired. A slump in the economy decreases people's discretionary income making it more difficult to travel very far from home. To overcome this hurdle, tourism related businesses, agencies, and other organizations could get together and work toward a common goal of attracting customers to the local area.
SWOT Analysis
Strengths
• existing as a unique, high quality bed and breakfast
• great location
• the use of Internet web sites to reach international markets
• owners who are passionate about their work Opportunities
• upscale clientele market, likely to be stable
• people are not traveling as far to get away for a vacation
• growing market with a significant percentage still not aware of the Hill Crest Inn Bed & Breakfast
• marketing to baby boomers, a vast growing segment
• promote discounts for loyal customers
Weaknesses
• inadequate money for long term advertising
• limited resources restricting growth opportunities when compared to larger competitors
• small size and a limited number of rooms limiting amount of sales Threats
• New Laws affecting bed and breakfast establishments
• Large hotel chains
• Competition from other bed and breakfast establishments
• A slump in the economy, decreasing people's discretionary income