Motel 6: Marketing Strategy

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Table of Contents

Executive summary
Mission statement
SWOT Analysis
Marketing strategy
Market mix

Executive summary

Motel 6 which is one the biggest chain of company owned and operated budget motels in the United States has the intention of getting into extended stay kind of business. This has therefore called for the development of a marketing plan to foresee this change. The marketing plan for Motel 6 has been divided into various components which have been adequately discussed in this paper. This paper first of all provides the mission statement in the course of Motel 6 pursuing its marketing targets. The situation of the company is then analyzed based on the strengths it has over other competitors, the weaknesses in the market, the opportunities which exist in the market but are yet to be exploited and the threats which can hinder the achievement of the marketing objectives. The marketing strategy is then established for this business. This outlines the direction the company is supposed to take based on the prevailing condition so as to increase its competitive advantage and find its position in the motel industry. Finally the marketing mix is brought out clearly in the paper beginning on the products, price , promotion and place. All these four factors are important and they would determine the position of the company in the industry. This is by influencing the purchasing patterns of the customers in the target market.

Mission statement

To be the leading provider of motel services while fostering quality through integrity in the entire motel industry. The motel shall ensure the security of all the guests from all walks of life without discrimination of race, ethnicity, religion or color.

SWOT Analysis

In terms of strengths, weaknesses, opportunities and threats, Motels 6 has the following to be put under consideration.

Strengths

Motel six is the biggest chain of company owned and operated budget motels in the United States. This shows that the business is not a beginner in the industry; it has been there and can now make important moves that will completely revolutionize the industry with new targets being set and achieved.

The company has a reputation for over the 36 years it has been in the business of Motels.

There has been a turn around in the company’s fortunes especially with a pre tax profit of $75 achieved last year.

Motel 6 has a good management philosophy which is focused on quality and has talented and skilled people in areas such as marketing, operations and finance. This is very important for a successful company.

The company has put in place adequate security measures to ensure that guests are comfortable and secure. For instance the installation of electronic door locks and deadbolts as well as high-intensity outdoor lights and closed-circuit television cameras, and it put security guards at almost half its properties. Security is no longer compromised in all the motels of the company.

The company has many properties from which returns are earned and contribute significantly towards achievement of its targets. For instance, for allowing the Motel 6 name , red-white and blue logo to be used on franchised properties, the company receives 4% of the revenue for operations and another 3 % for marketing and reservations.

Motel 6 with its new style resembles the look and feel of original hotels. The chain is firmly anchored in the budget market. Its rates are a bit low than what the competitors offer.

Weaknesses

It is already too late to become an important player in the market especially when the economy segment is dominated by extended stay in America, a chain created by H. Wayne Huizenga, the founder of Blockbuster Entertainment and Waste Management Inc.

Furthermore there may be room for more competition.

Motel 6 has so far remained unchanged for many years and in many ways. It only has a single brand. Its motels lack a meeting room, suites or floors for the use by business travelers.

Even to their most loyal guests, they do not give frequent flier miles or free room nights.

The only discount allowed is 10 percent off for members of the American Association of Retired Persons. And the chain’s 12-year-old ad campaign with Mr. Bodett is also virtually unchanged, except for having expanded to television in 1996. Lack of discounts especially for the loyal customer is a weakness that can be looked at from a perspective of the company not doing much to retain the loyal customers.

Another important weakness worth mentioning concerns the slow speed at which Motel six is moving. With the $1.1 billion the company ought to have moved to the extended but due to some factors, it is still sluggish to move into new ventures.

Opportunities

All the changes in the company are focused on attracting new customers. This is done while at the same time retaining the loyalty of 33 million annual guests. Few of these customers are on expense accounts.

Many of the loyal customers are retirees, members of the military, families with young children or students. A growing number are foreign visitors. The loyal customers recommend the motels saying they are clean, comfortable and their price is good. This presents an opportunity for the company to continue investing in more of these motels.

The franchising strategy and the putting of the company hotels in smaller communities , cities and towns presents an opportunity for the company to increase its revenue out of the hotels in these places. Franchising has been noted to be a quick and low –cost way of maximizing on name recognition and invading the new markets. This can be achieved in future if Motel 6 demonstrates commitment to franchising. This strategy has in the past accelerated the expansion of Holiday Inn, Sheraton, Hilton, Hyatt, Ramada Inn and other hotel companies, big and small.

It has also been noted that traditional budget motels are losing customers to extended stay properties. This fact suggests that the company would be safer if the new strategy to move away from traditional motels is adopted. More customers would be attracted to the new move and hence the company would have an increased number of customers in future.

The company has the potential of purchasing more properties especially with policies such as the consortium with financial companies. This can put the company in a better position especially with the growth of its revenues.

Threats

Even though the company has put in place adequate security measures in its motels, the safety of guests and especially the female ones seems to be a threat basing on the security issues in the past. The entry of more competitors in the industry is also a threat to the business because they would have to put adequate efforts to ensure that they maintain the required customer base so as to gain the competitive advantage and maintain the loyal customers.

Basing on the above SWOT analysis the company is in a better position to venture into the extended type of business as the opportunities which exist supersede the threats which can be minimized with the company’s resources.

Marketing strategy

This will form the road map to where the business is headed to in the near future.

First of all the objective of marketing in the company would be to achieve increased sales volumes accruing from the anticipated increase in the number of customers in the motels.

The number of loyal customers has to be maintained or increased if at all the company is to establish its position in the industry.

Motel 6 should be prepared for defensive techniques before the potential threats arrive. This would really help to counter their strategies effectively. As it has already been mentioned more competition is likely to be seen in the industry. If Motel 6 puts in place adequate measures in terms of marketing, then whenever these threats will arise their will be negligible impact to the marketing plan and overall marketing objectives. This can be undertaken by developing superiority in the hotels that would bring out their uniqueness that would be unmatched to the new competitors.

Focus should also be put on expansion of more motel facilities to cover up for the shortages that have been witnessed in the past during peak times. This can help to maximize the revenue collection during these times.

As the company adopts the new marketing plan care should be taken especially when responding to competition. This should be undertaken with care because no matter what , it should not interfere with the set marketing targets in the company. Staying focused on the targets would ensure the achievement of the objectives without interference form the competitors who may be playing the role of detractors.

Motel 6 has to keep insisting on quality and at affordable rates of its services as this would go far in creating a strong customer base a major pillar that will see it through success in the motel industry. Through quality assurance the extended stay business would prove to be successful eventually because customers already have confidence in what the company offers.

Market mix

Product

This would involve various improvements in the services that are offered by Motel 6 so as to please the customers and make them to always prefer Motel 6 as compared to the other competitors. The installation of security gadgets and other necessary measures in the motels owned by the company would be a major move to the product that would make the company gain more competitive advantage. The installation of items such as a telephone and desktop color television set in each room, a fax machine available 24 hours a day and other amenities, is a clear indication that customer satisfaction has been given the necessary attention by the company. Therefore the services offered by Motel 6 Have been tailored to meet the needs of the customers hence creating satisfaction.

Price

The price of Motels that are owned by this company is good as compared with that of competitors. With their value bearing in mind of what is contained in the rooms, it is important to mention that the motels are worth for what the customers pay. Reducing the price much below the standards would mean compromised quality in the minds of consumers. Therefore with such competitive prices, Motel 6 is likely to compete effectively in the industry and gain its market share. The price would remain an important factor that will pull the anticipated number of customers for the motels.

Promotion

Promotion of Motel 6 rooms should be given adequate attention so as to spread the message to those who may be wishing to have great experience in the motels.

Campaigns should be carried out through advertising. The print media would be used alongside TV and Radio advertising. All employees of the company would undergo public relations training to ensure that customers do not complain as they enjoy the services.Word of mouth by our esteemed loyal customers after satisfaction would be very important top send the message out and recommend the motels for other people looking for similar services.

Place

The location of Motel 6 hotels would also be a significant factor in the marketing strategy. The hotels are located in the major cities towns and are even near tourist destination center for easy access by tourists. In towns the motels are near places of travel so as to attract the travelers who look for the services. The convenience of the motels would be fundamental in attracting and retaining more customers.

It is vital to mention that a good combination of the product, price, promotion and place would be fundamental in meeting the marketing objectives for Motel 6.

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