Marketing Case Report
Amber Inn & GloFish
Marketing Management
Professor Charles Trappey
廖語婕 9862505
郭惠華 9862507
鄭明宜 9862503
王修彥 9862525
許馨尹 981031
邱揚程 9862513
宋惠華 9862529
洪啟智 9762508
TABLE of CONTENT
t
I. TEACHING NOTES 4
Integrated Marketing Communication Strategy and Management
II. Case: Amber Inn and Suites 6
Problem Background
Target
Conclusion
Conclusion Analysis
Action Plan for advertising budget
Estimation
III. TEACHING NOTE 6
Marketing Channel Strategy and Management
IV. Case: GloFish Inc 9
Problem Gackground
Target
Conclusion
Conclusion Analysis
Detail reasons for not suitable Distribution Channels
Suggested Distribution Channels
SWOT table for each Channel
Case 1
Amber Inn and Suites
I. TEACHING NOTE OF INTEGRATED MARKETING COMMUNICATION STRATEGY AND MANAGEMENT
EXHIBIT 1
This model describe how buyers purchase a particular offering and to define the role of information in the purchase process.
Buyers will change their role and stage in different point in time and also require different communication strategy.
l
Exhibit 2
II. BACKGROUND
AMBER INN
Exhibit 3
1. Problem Background :
Amber Inn and Suite Inc wants to adjust company positioning strategy to make profit. They need to decide the guideline of service plan, and, first of all, which segment of customer to serve for. Is it business traveler, or vacation type customers? This will effect how to make good use of the fiscal budget for coming year.
2. Target :
It is to increase the sales and profit by adjusting the customer portfolio.
3. Conclusion:
Amber Inn should be more focused on business traveler.
4. Conclusion Analysis:
Exhibit 4 Position Shift from revenue and elasticity view
Revenue increase more than decrease as the dark area shows,
Amber’s position/mission is to provide clean and comfortable accommodations in convenient locations at reasonable prices which suits business travelers with modest business trip budget.
Since Amber’s price is relatively low compared with same positioning competitors, we recommend to increase the Average Daily Rate(Price) so that Amber will move its position from A to A”.
Stay with our target customer (business travelers) so Amber’s revenue will increase dramatically since the price elasticity is low for business travelers(about 65.7% paid by company not by self).
Amber’s main revenue comes from repeated business travelers due to past good experiences. Extra ad expense may increase the number of vacation type customer but expel business traveler as trade off effect. This means the previous advertising media budget may be too high and not so necessary. To increase this business segment of customer, we can increase the rate of “specified by company”. The discount to companies can be covered by the saving of advertising (ex. Spot television may not attract business travelers). EBITDA can be improved.
Besides, we may take the “weekend special” as promotion to increase brand awareness and our occupancy on weekends.
Exhibit 5 Position Shift from positioning view
From positioning point of view, the shift dimension and position is of difference.
The dimension index each is price rate and amenity. As Amber inn increase their room rate by focusing business traveler, the position will shift to the right side.
5. Action Plan for marketing budget
Marketing Budget for next year: Should be more focused on business traveler
EBITDA can be improved.
Figure 1
Media
Magazine è Maintain the budget of magazines related to business.
Maintain 1/2 budget of 2005.
Newspaper è Maintain the same budget as 2005 shown in Exhibit 7.
Outdoor è Cut the budget.
Spot TV è Cut the budget.
Cable Networks è Cut the budget.
Radio è Cut the budget.
Internet è Maintain the same budget as 2005 shown in Exhibit 7.
We can save about $5,500,000 based on Exhibit 7 in textbook.
Promote the frontier strategy which focuses on the business segment.
Since Amber Inn will focus on business travelers, the advertising channel shall be different. The marketing budge shall be used in the field that business travelers or his company will approach and get the information to make purchase decision.
6. Estimation
With activities 1 and 2, the lodging revenue of Amber Inn can be increased by 7% based on 2005 of Exhibit 4,
Lodging revenue: $422,625 x (100% + 7%) = $452,208
Total Expense: $438,317 x (100% + 3%) = $451,466
(The Expense includes the AD cost down in activity 1 and frontier marketing expense)
Net Income: $452,208 - $451,466 = $742
Case 2
Glofish Inc.
II. TEACHING NOTE OF Marketing Channel Strategy and Management
Exhibit4: Traditional marketing channel design
Direct versus Indirect Distribution
1 Use intermediaries to reach target markets
2 Contact ultimate buyers directly using its own sales force or outlets
3 Internet
Type, location density and number of channel levels must be determined.
1. Problem Background
l Choose a better channel to help increasing revenue!
l Make a decision to add the international market or not!
2. Target
l Potential for Market Growth
l The less risk
l No more other expense happen
3. Conclusion:
l GloFish shall choose independent store and chain stores as their distribution channels.
l No need add international market right now.
4. Conclusion Analysis :
Potential for Market Growth
According to the SWOT Table, we can find the independent store and chain store are more suitable, because, it can help the revenue directly and we already preview the market growth rate. We also can estimate the revenue growth rate. Although Kiosks or Internet may have explosive growth, we can’t make sure it will happen. Especially Internet, GloFish has no experience of the global market before. It may spend huge resource to build up the Internet system.
The less risk
According to the SWOT Table, GloFish has the major risky factor, genetically modified . As to Chain Store, they still don’t agree to sell the product. This problem may also impact Asia market even they don’t prohibit the genetically modified fish now . The independent stores don’t concern about the genetically modified fish is the advantage.
No more other expense happen
The sales of Kiosks is too concentrated on Nov and Dec . Other month leased expense will be cost waste . To Bulid up the internet system will make the cost up too. Global Logistic expense need to be added too. Independent store and chain store already have the local logistic system, it also can save much time to make the business go live.
International Market
To add international market is necessary. By internet maybe a good choice. But now, internet channel is not the better choice for GloFish.
Too many problems need to be faced in the international market , like the illegal breeding .So, we don’t suggest to add international market now .
5. Detail Reasons for not suitable distribution channels:
l According to US market status, the average unit price of fish is usd$1.98, whereas GloFish’s product is priced at $12 at most. It’s not worth marketing through internet which the price of fish shall be over usd$40 to cover the competitive price and high delivery cost.
n è Internet is not suitable for GloFish.
l According to the weakness of Kiosks, the revenue is far too concentrated on Nov and Dec. The lease expense is not worthy for other months. While Kiosks sell various kind of product, GloFish may not be offered to customers with profession.
n è Kiosks is not suitable for GloFish based on risk/cost concept and no professional selling to promote the fish.
l International market is a attractive market while it’s 3 times bigger than US market. But in fact, it’s only Asia now of opportunity. The illegal breeding and serious competition are not what GloFish can handle so far.
n è International market is not the action to take right now
n è GloFish ‘s market share is only 1% in US(4M/356.4M). To cultivate US market first is suggested.
6. Suggested distribution channels:
l Chain stores
è A majority of freshwater ornamental fish sold in the US are purchased from these chain stores.
è Opportunity to sell aquarium kit which market value is over 300M annually (700M-356.4M)
è PET’sMart stated they were considering to carry the fish
(PET’sMart: 700+ stores, 0.1 Billion sales = $3.4 Billion x 3%)
l Independent pet stores
è Opportunity to sell aquarium kit which market value is over 300M annually (700M-356.4M)
è True fish lovers to initiate GloFish market niche.
7. SWOT Table for each Channel
2