Running head: IMC PLAN OF MERMAID HOTELS & RESORTS 1

IMC Plan of Mermaid Hotels & Resorts

Class: Integrated Marketing Communications

Prepared By:

Date:
IMC PLAN OF MERMAID HOTELS & RESORTS 2

Table of contents

Cover Page..................................................................................................................................................1
Table of contents.........................................................................................................................................2
Executive Summary.....................................................................................................................................3
Situation Analysis........................................................................................................................................6
Identification of Target Markets..................................................................................................................9
Determination of the IMC objectives........................................................................................................12
Creative Approach / Message Strategy......................................................................................................14
Integrated Marketing Communications Options considered......................................................................15
Recommendations for IMC plan................................................................................................................17
Schedule....................................................................................................................................................18
Monitoring and Evaluation of the Program...............................................................................................19
Conclusion.................................................................................................................................................19
References.................................................................................................................................................20
Appendix...................................................................................................................................................21
IMC PLAN OF MERMAID HOTELS & RESORTS 3

Executive Summary

This report is an informative tool based on the integrated marketing and communication

program for the Mermaid chain of hotels and resorts conducted in view of establishing a new

branch in Indonesia. Through in-depth analysis of the factors of location and strategic selling

positions, favorable market sites for providing at least 35000 booking nights were identified to

create business for the new Lombok island subsidiary branch over the next one year. The report

has taken into consideration the fact that the modern markets for hotels are more competitive

than ever before. Japan and South Korean cities bordering the pacific were identified as crucial

markets for the new resort. Segmentation of the markets established that Japan is the more

promising of the two regions basing on its rich culture and traditions coupled with advanced

industries supporting substantial incomes to its population.

Strategic audiences mainly aged 25 to 60 years identified in the specific cities proved

that the best promotion method would have to be based on the good reading behavior of the

population. The internet was identified as the highest ranking advertising strategy considering

the fact that the entire populations including teenagers have reliable access to internet devices in

accordance with the advanced technological orientation in the region. Magazines and newspapers

ranked secondly as the best ranking as each household has access to a daily magazine or

newspaper throughout the cities. Television and radio were determined as viable options to

supplement magazines and newspapers though most households were reported to have low

watching times. Trade promotion was identified as a strategy to complement the other methods.

The report also provides an evaluation and monitoring framework suggesting recommendations

for the new establishment based on data collected from the program.
IMC PLAN OF MERMAID HOTELS & RESORTS 4

Introduction

Aim

Our aim was to establish a promotional framework for establishing a sustainable

marketing strategy in the new subsidiary within the island of Lombok. Having established

potential markets surrounding the island, it was important to determine the viability of the new

resort for the next one year. This would require collection of data from competitors in the area

and subsequent analysis to ascertain the required steps in view of launching the hotel within the

next six months.

Scope

The island of Lombok in Indonesia is strategically located for the catchment of a wide

customer base within Asia and Australia. However, this report covers the IMC program for the

primary combination of the Japan-South Korea markets. South Korea being one of the secondary

market combinations was considered for its semblance in terms of marketing response behaviors

to Japan as the primary market. Data on competitors within these areas including potential and

upcoming hotels was mainly collected from their headquarter sites. Data projected covers the

next 18 months precisely the first six months to the launch of the hotel and the succeeding 12

months f operation. The budget for the program was projected at 2.1 million dollars excluding

salaries for the marketing manager and three support staff as well as the acquired equipment

during the program life. The program report covers the anticipated questions raised from the 4

IMC objectives that address issues concerning the preparedness toward stepping into business in

the next six months including a step-wise analysis of the expected challenges and possible
IMC PLAN OF MERMAID HOTELS & RESORTS 5

solutions. It therefore provides pertinent recommendations suitable for navigating through the

next one year and probably towards a bright future.

Background

Mermaid Hotels & Resorts is a chain of luxury hotels providing hotel facilities to a large

number of clients in the United States, Europe and recently Asia, more so in vocational islands.

At its entry into the market 25 years ago, no one could fathom the anticipated impact of its entry.

Over the years, the company has grown from strength to strength expanding its reach to other

areas in the world. Through its program of conducting integrated marketing and communication,

the company is embarking on a process of establishing a new subsidiary in the Lombok Island in

Indonesia. This will be a build up to the development of new markets in Asia especially

following the establishment of a promising branch in Hawaii and other regions in the South

Pacific subcontinents.

In the last five years of operation that have involved research and development for new

markets the company has clearly indicated its aim of surpassing the current world class caliber

that it now holds. The Lombok islands present a potential location for a five star hotel that can

attain sustainable growth in a good time. Its strategic location east of the renowned holiday resort

island of Bali is a promising market. The Indonesian government cites Lombok as having the

capacity support an up-market alternative to Bali providing a new choice of destination

(Boniface & Cooper, 2001). A new subsidiary is expected to run at par on a competitive level on

the basis of providing quality and affordable services.

Situation Analysis
Internal environment
IMC PLAN OF MERMAID HOTELS & RESORTS 6

The Mermaid chain of hotels and resorts has values writ in innovation, research and

development as well as a keen sense of constructive culture akin to societal health needs. The

corporation today is engaged in arguably the ultimate goal of any hotel worth its salt; the

development and provision of quality hotel services. Moreover, the company is focused on the

global agenda of globalization through integrated service delivery systems. The following factors

define the corporation’s stepping stone and weak points.

Strengths

Mermaid chain of hotels and resorts has been in the market for the last 25 years dealing

with a varied clientele in its main braches in the United States. This provides a framework for

delivering service based on previous experience. Research has established that businesses with

experience of the market have an edge over their competitors due to the fact that these businesses

already have internal knowledge of the market and the risk of experimentation is highly reduced

(Debra and Nelson, 2007). Furthermore, the hotel has established new subsidiaries in the

southern Pacific region including a one in Hawaii, Fiji, New Caledonia and Vanuatu. Since these

are establishments doing well in their third years they have already created a name for the

company and the new branches would have little difficulty in reproducing the same success with

time and proper resource outlay. Finally, the company has a reputation for providing a range of

luxury services which enhance its differentiation abilities. Considering the complex nature of the

population in the regions identified, this ability to differentiate services will be crucial in

sustaining the new branch (Gilberto and Alberto, 2010).

Weaknesses
IMC PLAN OF MERMAID HOTELS & RESORTS 7

Despite the fact that the company is growing on from one stepping stone to another, a

crucial obstacle to this momentum is likely to be the diseconomies of scale (Mintzberg & Quinn,

1991). Research has shown that expanded growth that focuses on geography and demographics

rather than investment driven by demand and capital outlay is tantamount to produce

diseconomies of scale in the long run (Ricky and Gregory, 2009). Establishing more branches in

the Pacific islands may hinder further growth with the market distributing itself among the

subsidiaries and competitors. This will be a stumbling block to the potential success that would

have been attained in the absence of other subsidiaries in the region. Moreover, the establishment

of a new branch will require a heavy capital input that will delay the period of super profits

assuming the subsidiary breaks even as projected.

External Environment

Despite the obvious challenges of competition and tough regulatory requirements in the

hotel industry Mermaid chain of hotels has nurtured a stellar profile of growth. The following

factors form the basis of its external environment as the corporation continues to grow.

Threats

Competition is obviously the greatest threat to the new subsidiary expected to be

launched. Within the Lombok Island itself, just a few miles to the west is the very populous Bali

beach resort that has become the attraction of thousands of travelers including tourists from other

continents (Lombok Network Interactive, 2012). Coupled with the existence of other five-star

hotels in the cities and elsewhere across the Pacific, the Mermaid Hotels and Resort will rather

have to work out on a plan of either reducing prices or improving quality in order to attract loyal

customers from these luxurious hotels. However, building a customer base through rice reduction
IMC PLAN OF MERMAID HOTELS & RESORTS 8

is a tricky strategy and may become unsustainable in the long run (Bond, et al, (2008). Another

factor is the increase in the prices of airline travel following the exit of some airlines from the

Pacific route due to insecurity reasons. Moreover, the unreliability of air travel will prove a

challenge for new clients especially during the initial stages

Opportunities

The Lombok Island provides a unique blend of both flora and fauna combined with

beautiful landscapes and the existence of coral reefs creating attractive scenery that is yet to be

utilized by a proper facility. This will serve as a foundation toward building a loyal clientele with

time. In addition, Bali each resort in close proximity to the Lombok Island is well separated a

prominent Pacific strait that will provide a natural separation thus producing a differentiated

destination (Lombok Network Interactive, 2012). Over the course of time, the Japanese yen has

gained strength over the neighboring currencies including Indonesia meaning that travelers from

the surrounding areas will find it both affordable and adventurous to travel. Finally, the Mermaid

chain of hotels will provide a completely new alternative to the rest of the available choices.

Considering the large population of Muslims in the Lombok area in contrast to the majority

dominant Indian communities to the east, tailoring services to the taste of the surrounding will

give a new taste to the resort. This will serve as an edge over the Bali beach resort.

SWOT Analysis Summary

STRENGTHS WEKNESSES OPPORTUNITIES THREATS

IMC PLAN OF MERMAID HOTELS & RESORTS 9

 Experienced  Diseconomies of  Suitable scenery  Stiff

Human resource scale  Cultural competition
 Previous  High capital diversity  Unreliable air
knowledge of Investment  Strategic travel
market required location  Flight
 High  Auto-oriented  Affordability of insecurity
differentiation competition services
capacity
 Renowned brand
name

Identification of Target Markets

Markets are identified based on certain inherent characteristics of the population and the

geographic location of the target areas. Each population has different tastes and preferences

while certain locations promote the distribution and consumption of certain products than others.

The following two classifications were used to create two market segments for efficient

development of an integrated marketing and communication program.

Market segmentation

Geographical segmentation

The program focused on the location of markets considering that advertising costs reflect

the geographical spread in deployment of the strategies identified. Generally, those locations

with reliable connections to the Lombok Island through airlines were considered. Martaram, the

capital city of Lombok is only a few minutes to Denpasar International Airport which provides the most

reliable airline connection to the island and many other secondary connections into the region. Japan is

generally well connected to the major international airlines with the capital Tokyo also having

reliable sea routes to other islands which is an added advantage. The short distance from Bali
IMC PLAN OF MERMAID HOTELS & RESORTS 10

was also considered as another strategic marketing segmentation basis with a survey on the west

of the island proving that travelers would not mind accessing Lombok through Bali either as an

alternative or as an interconnected route. This would be an incentive as travelers arriving from

Bali will find a fresh look from their usual surrounding of the Bali beach resort.

Demographic segmentation

Japan offers a unique combination of a population with variety in terms of culture and traditions.

The island is mainly dominated by urban communities to the west but a substantial population of rural

communities can be found on the east. While the existence of these communities has little bearing on the

demand for services, their socio-economic composition provides a basis for service provision. Mermaid

chain of hotels and resorts provides a variety of luxury services including accommodation and cuisine. At

a cost of US$225 a couple will be able to access a one-bedroom ocean view room. This is will

provide something different to the Japanese travelers already used to island viewing though a

few bedrooms classified as Island View rooms will be offered for those who prefer cheaper

accommodation at a lower cost of US$185 per night.

Two-bedroom island view as well as ocean view will go at a higher cost. The basis of

segmentation therefore considered US$250 as the average for what a standard traveler would

willingly part with for a night at the hotel. Factoring in the costs of traveling and other

miscellany for a three-and-a-half day stay projected the average expenses at about US$10750.

This directed towards an average annual household income of a standard client at about

US$77000. The targeted audience would therefore be a combination of urban middle and high

class residents in the coastal cities of Japan. These would e clients in the age group of 30 to 65

years all working or recently retired with a stable source of income. This segmentation enabled

the program to sample out various communities that fit the description.
IMC PLAN OF MERMAID HOTELS & RESORTS 11

Target market selection

Having defined the geographical and demographic segmentation of the target audience

the program arrived at a combination of three market selections from both Japan and South

Korea. Japan offered the best option for a marketing strategy based on ease of navigation from

one city to another while South Korea was a secondary target accessible through Japan. The

urban cities of Tokyo, Yokohama, Nagoya and Hiroshima were classified as the most viable

targets fitting both the geographic parameters of proximity and strategic location while the

population being mainly working class offered suitability in terms of potential. These areas were

identified based on the living standards and the wage distribution reflecting a skew towards the

high end in urban industrial locations. The Kobe-Osaka-Kyoto industrial areas would offer

another combination of target markets form its rich network of industries providing a ready

target population. Across the border to South Korea, the populous cities of Busan, Seoul, Daegu

and Ganju would be supplementary targets as they are first well accessible and relatively in close

proximity. However, the main strategies for the program were based in Japan.

Positioning

In order to effectively influence the target consumer’s minds, the program embarked on a

comparative marketing position that would take advantage of the busy work culture in the urban

industrial locations (Thompson & Strickland, 1995). For a community of individuals working

seven days in the industries, the chance at an affordable vacation in a luxury beach would

probably be appealing. The program also considered a price formula that would reflect the ease

of accessing quality vocational hotel services at a relatively affordable cost. With majority of the

target population working, price would be an underlying factor while quality and brand name
IMC PLAN OF MERMAID HOTELS & RESORTS 12

would have significant weight on making the decision. These positioning criteria would enable

the program to emphasize the brand on a one-on-one scale with target clients. By so doing the

program as able to gauge the perception of target customers and subsequently attempted to

develop a competitive edge based on the brands advantage over competitors.

Determination of the IMC objectives

The program focused on developing its objectives based on a framework of the Defining

Advertising Goals for Measured Advertising Results (DAGMAR). This would provide a basis

for conducting an objective evaluation while at the same time monitoring the indicators of

performance. In the grand scheme of things, the Mermaid chain of hotels and resorts builds

growth on a foundation of its brand name as well as a keen sense of positive promotion of its

differentiated products. The program therefore developed communication goals that would

address its potential customers and strategic travelling agencies connected to the Lombok Island.

From these communication goals, various objectives were developed.

Potential Customers

Having operated beach resorts in Hawaii and with new subsidiaries in the South Pacific

regions, MHR already has an established brand name that would be easy to identify within the

East. Potential customers would be provided with information intended to further familiarize

them with the brand that is Mermaid Hotel and Resort but specifically on the new Lombok

subsidiary and the varied services offered. This will reduce the amount of time taken to make a

choice of a vocational destination for customers who intend to conduct an in-depth analysis of

the options available. Moreover, the program underlined a keen interest in improving awareness

in Japan by focusing on potential clients planning their first vacation. Using a customized
IMC PLAN OF MERMAID HOTELS & RESORTS 13

communication approach, the program will aim at increasing awareness by 20%. Targeting the

client base in the urban industrial areas earning an average of $US77000 annually within the age

group of 30-65 the program will target at least 10,000 bookings in the next one year with each

booking for an average length of stay of 3.5 which would produce 35000 booking nights by the

end of the year.

Travel Agencies

From a promotional point of view, travel agencies are familiar with the MHR brand in the

East. However, in order to improve the contingencies for new customers as well as older clients

willing to have a taste of the new subsidiary will require an analysis of the indicators of

preference (Management Science, 2006). This will mainly be based on the costs of travel and the

ease of navigating to the Lombok Island. Having established direct flights to Denpasar,

awareness will be needed on the economic options of connected flights through Tokyo, Hakone,

Kyoto and Osaka. By creating awareness and improving understanding of travelling options,

travel agents will be able to inform potential clients on the most effective flights to the resort

thus further promoting awareness.

Creative Approach / Message Strategy

The program focused on the strategies that would deliver information easily and promote

awareness on a large scale. Media would be the first strategy on the basis that it will provide a

large audience. This will involve the use of animations and fantasies to capture the situation of

the new subsidiary in Lombok. These will be run on televisions and radio on a regular basis.

Social networks will be used in increasing awareness through defined page redirections to the

MHR main page from buttons in the official Twitter and Facebook pages. The internet will also
IMC PLAN OF MERMAID HOTELS & RESORTS 14

be used to host multimedia messages through YouTube and other multimedia platforms.

Demonstrations will be created on billboards at strategic locations in the cities to capture the

sight of prospective clients. Animations will be deployed on some of these billboards capturing

the unique taste of the Lombok Island with its beautiful sceneries and a mixture of flora and

fauna. Testimonials will be distributed in companies and in social places to provide further

awareness. Headlines on local newspapers will also provide information to various cities

especially in South Korea where a secondary client base is expected to develop. Finally,

personality symbols will be deployed on various platforms. These personalities will be identified

based on their appeal to the hotel industry especially in Indonesia.

Integrated Marketing Communications Options considered

Advertising

Advertisings will form the basis of marketing communication for the program. Various

advertising methods will be used to utilize their lively presence and reliability as follows:

Television

Television offers a very creative way of advertising considering its ability to air

multimedia platforms such as motion and still pictures combined with imaginative sounds. This

method is also suitable in this scenario due to its ability to reach a wide audience while at the

same time providing a lengthy presence due to the appeal to emotions to its audience. However,

the method is selective in nature in that it reaches only those households with lengthy watching

times excluding those who rely on the television for news only. Japan has a population writ in

busy lifestyles working many hours every day. This might hinder the delivery of the message
IMC PLAN OF MERMAID HOTELS & RESORTS 15

through television unless the timing is strategic. Moreover, the modern perception is that the

television is generally an entertainment tool and most people give it limited attention.

Nevertheless, due to its ability to support creativity through picture and sound the method will be

used to kick the promotion in the identified urban areas.

Radio

The radio is another media platform that will provide a framework for advertising. Radio

has the advantage of simplicity and clarity of content to the audience. Moreover, the platform

reaches a substantially large audience considering that every household has access to a radio

device. Moreover, modern mobile gadgets have in-built radio receivers and most individuals can

tune to their favorite stations while multitasking. However, like the television, this method has

selectivity bias with the large number of radio stations meaning that people are generally tuned

to different stations which can be difficult to manage. The method will be used alongside the

television in the urban areas.

Magazines

This is the most appealing method in the hotel and tourism industry. This method has the

advantage of appealing to the eye through images and information. Most prospective travelers

buy travel magazines before making the choice of their destinations. While this method will

capture the message and provide a snapshot in picture of what can be expected, it has the

disadvantage of selectivity and a low audience. However due to its ability to assure clarity of the

content and reaching a more realistic audience, it will be used to provide continuous information

and new aspects in the development of the Lombok subsidiary.

Internet
IMC PLAN OF MERMAID HOTELS & RESORTS 16

This is one of the most realistic strategies in the respective market segments within Japan

and South Korea. These are regions with advanced interconnectivity levels. Today, most people

can attest to the fact that they almost depend on the internet for their information needs. This

method has the advantage of offering a wide platform for both still and moving images was well

as sound. Moreover the internet is reliable as it individuals have different off times during which

they can browse for content thus eliminating the bias of time selectivity. On the downside, it

comes with the difficulty of tailoring content to reach as many of the audience as possible. The

important factor however is the fact that it encourages creativity through the multimedia

platforms.

Personal selling

Personal selling is common in the hotel industry with many companies opting to deploy

sales agents in the cities perceived to have the most potential. Personal selling has the reliability

of delivering clarity and opportunity for an extended insight into the dynamics of the services

offered. However due to its lack of a wide audience and requiring investments into facilities, it

limits its effectiveness overall. Sales agents will e deployed in major travel centers to liaise with

potential travelers planning vacations in the East Pacific.

Sales promotion

MHR already rolls a program of sales promotion in which customers are awarded points

based on their use of services in the hotel. These points are redeemable with low priced service

packages of accommodation and other relevant services. MHR has already experimented with

this idea and attracted about 4000 clients showing a genuine interest in the program. Despite the

fact that it has heavy impact on profit margins in the short run it is the most suitable method for
IMC PLAN OF MERMAID HOTELS & RESORTS 17

new products. This method not only improves sales but it also encourages loyalty to the brand

and will be enhanced in the new Lombok subsidiary.

Recommendations for IMC plan

Budget

A budget was developed for the IMC program and has been listed in the appendix of this

report. A majority of funds was allocated on television advertising considering the wide reach it

commands. A substantial amount of the budget was also allocated on radio advert with a keen

concentration in Tokyo where majority of the promotion was centered. Various newspapers were

evaluated and adverts placed on weekends consuming another portion of the budget. These

adverts were centered on the travelling preferences of people in the east of Pacific. Internet

advertising was given a portion of the budget with YouTube presentations and animations taking

a majority of the finds although the MHR main website was also used to aid in advertising. The

remaining funds accumulating to a figure of $US 331600 was spared as emergency funds though

this could be included in the final round of extensive magazine adverts in the last few weeks

toward the end of the first year of operation.

Schedule
The program kicks off in the first week leading to the first six months before the launch

of the subsidiary. Toward the first three months of this period, advertising will intensify

culminating in the final month before the hotel opens. During the first one year, advertising will

mainly be on a regular basis following a schedule established depending on the effectiveness of

the media selected

Media selection
IMC PLAN OF MERMAID HOTELS & RESORTS 18

Magazines and newspapers were determined basing on their distribution. The main

newspapers selected were the Japan Times and the Japan today. The two newspapers running

adverts have a huge distribution in Tokyo and the main cities in Japan. Other travel magazines such

as Match and Tokyo Weekender were also included in the program. The Metropolis was included as the

English version for foreigners in the country. The internet was deployed using multimedia messages in

YouTube and the company’s portal.

Monitoring and Evaluation of the Program

The main source for monitoring will be through the distribution of magazines. The

company’ web metrics tool will also e used to gauge visiting and traffic statistics during the first

six months before the launch. This will provide the basis for tracking the effectiveness of the

adverts before the hotel kicks operation. The launch of the hotel, the company will have obtained

enough data o determine the pattern of sales thus having a baseline evaluation framework for

conducting further analysis into the dynamics of sales and distribution of clients. During the first

year of operation, the main monitoring method will be through personal sales reports alongside

the aforementioned means. This will provide the continuing evaluation towards the end of the

year evaluation report.

Conclusion

This report has outlined the IMC program for MHR for a period of one year. Viable

markets have been established basing on the market segmentation factors and the positioning

strengths of the corporation. After factoring in the impact of competition alongside other threats,

various methods for improving awareness and positive image of the product have been
IMC PLAN OF MERMAID HOTELS & RESORTS 19

suggested. Hopefully, this will serve as a stepping stone into a successful establishment of the

Hotel and a bright future ahead.

References

Boniface, B. & Cooper, C. (2001) Worldwide Destinations: the geography of travel and tourism

(3rd edition). Oxford: Butterworth-Heinemann.

Debra, L. N. and Nelson, J. C. (2007). Understanding Organization Behavior. Thomson:

Business economics.

Gilberto Montibeller and Alberto, Franco. (2010). Handbook of multi-criteria analysis: Multi-

Criteria Decision Analysis for Strategy management. IL: Springer

Lombok Network Interactive. (2012) Lombok Indonesia [Online] Available:

http://www.lombok-network.com [Accessed 22nd December 2012]

IMC PLAN OF MERMAID HOTELS & RESORTS 20

Mintzberg, H. & Quinn, J. B. (1991). The Strategy Process. Concepts, Contexts, Cases. Second

Edition. Englewood Cliffs, NJ: Prentice Hall.

Ricky, G. and Gregory, M. (2009). Organizational Behavior: managing People and

organizations. NY: Cengage Learning.

S.D. Bond, K.A. Carlson, and R.L. Keeney (2008). Generating objectives: Can decision makers

articulate what they want? Management Science.

Thompson, A. A. & Strickland, A. J. (1995). Strategic Management – Concepts and cases.

Eighth edition. Chicago: Irwin

Zero Based Budgeting. (2006). Learn How To Justify Your Business Forecasts. Management

Science.
IMC PLAN OF MERMAID HOTELS & RESORTS 21

Appendix
Budget

Vote Heads First Six Months First Year of

($US) Operation ($US)

Newspaper Adverts
Japan Times (Weekend) 15 700 31400
Japan Today (Weekend) 13500 27000
Travel Magazines
16800 33600
Outdoor Japan (Monthly)
17100 34200
Matcha (Monthly)
Metropolis (Monthly) 15300 30600
Tokyo weekender (Monthly) 15500 31000
Trade Magazines
Jetro (Weekly) 10900 21800
METI (Weekly) 11000 22000
Global Trade (Weekly)
9500 19000
Television adverts
TvAsahi (twice on weekends) 472000 94400
Radio advert
Radio Tokyo 233000 466000
Internet adverts (Tokyo) 47600 95200

Total 862200 Total 906200

Grand Total
1768400

Remaining Funds
331600