Allstar Pet Hotel’s Analysis and Marketing Research

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The proposed business for this report is the Allstar Pet Hotel that will be located in East Harlem at 111th Street near the Thomas Jefferson Park in a ground floor 1,000 square foot two-story storefront in Manhatten City. The availability of this location is based on present day real estate storefront listings in the area which have a listing price of $16 per square feet resulting in a monthly rent of $16,000. The business focuses on providing a safe and comfortable hotel service specifically for cats and dogs. The viability of this proposed business is based on the analysis conducted by Armour, Burkhauser, and Larrimore which delved into the spending habits among upper-income residents in various U.S. cities.

It showed that due to their higher income levels, this enabled them to take more frequent vacations both locally and abroad (Armour, Burkhauser, and Larrimore 283). Based on this data, one identified perceived need that would arise is for someone to take care of their pets while they are not around. While pet owners could conceivably leave their pets at home and merely have someone come in every day to feed them, this creates issues regarding the potential damage that unsupervised pets could cause in a Manhatten apartment that has expensive furnishings and devices. As such, the Allstar Pet Hotel would provide upper-income clients with a high-end service that would allow them to take their vacation worry free since they can be assured that their pets are in the hands of professional handlers.

Target Business

Since the company focuses on consumers within the upper end of the income spectrum, the services offered will reflect the price paid per day ($250 each day for any breed of cat or dog). The services that the Allstar Pet Hotel will offer consists of the following:

Pick and delivery – a delivery van can go to a client’s address so that they will not have to go to the premises of the store to check-in their pets.
Online Payment and Scheduling – transactions can be conducted online to create an easier and more streamlined service for the company’s clients. Payments can be made via an online payment platform, and pick-up and deliveries can be scheduled online as well.
Livestream access – each room that a pet is placed in comes with a webcam that enables the pet owner to view live stream footage of the how their pet is doing. Livestream footage of other areas of the facility is also provided to allow customers to see the facilities and the employees in action.
Nutritious meals – each pet that is checked into the hotel is given a nutritionally balanced meal that takes into account their taste preference and the type of food that would be ideal for that particular breed of cat or dog (Florida 54).
Daily Interactions – every single pet that has been checked into the hotel will receive a period of daily interaction with an employee. This can consist of an hour or so of playtime within the facility for cats or walks outside the facility at the nearby Thomas Jefferson Park.
Grooming – all pets that are checked into the hotel are groomed regularly to ensure that their coats are free from dirt, parasites or excess hair

The packaged service and extra amenities that come with checking in a pet at the hotel serve to justify the high daily costs. This service is primarily for people that love their pets, have high incomes, and want to have some peace of mind when they are vacationing. Based on the need for serious renovations to accommodate the required design for the pet care facility, it is anticipated that should the business receive the necessary financing, the pet hotel could be established by spring of next year.

Unsatisfied Consumer Needs

Worrying about their pets is one of the reasons why wealthy owners tend to enjoy their vacations a lot less. They worry on whether or not they are being fed or looked after properly, if something has happened to them or if there is a sudden issue that came up that could cause their pet to suddenly need emergency medical attention. One solution that some of them have come up with has been to bring their pets along during their vacations; however, this often causes them to lessen the enjoyability of their vacation since they need to take care of the needs of their pet at the same time. As such, the services of the Allstar Pet Hotel, while being somewhat expensive, addresses all of the perceived needs of this particular type of consumer (Coutré 25). All the services that were mentioned ensure that the pet is well-cared for and enables the owner to actively check up on their pets whenever they want to. The result is that this addresses all of their concerns and allows them to enjoy their vacation a lot more.

Market Situation Analysis

Company Analysis

East Harlem was chosen as the site for the business due to the following factors:

Accessibility – the nearby Thomas Jefferson Park is an ideal location for taking dogs on a walk in a safe environment. East Harlem has also begun to have a steady rate of development within the past decade with more specialized stores opening up in the area (Connolly 46).
More Affordable Spaces – the price and size of the storefront location in East Harlem are far more affordable when compared to other places with the same features (i.e. proximity to the Thomas Jefferson Park). Trying to get a storefront in areas near to Central Park is not financially feasible for this type of business (Li 95).

Overall, the chosen location for the company addresses several of the initial problems that could cause issues and is ideal for the type of operations that will be implemented.

Business Environment Analysis

There are more than a dozen pet hotels within Manhatten that operate either under the same price range as the proposed Allstar Pet hotel or are more affordable yet have fewer services. To compete in this saturated market, Allstar Pet Hotel needs to stand out based on services that the other hotels cannot match within a short period. This takes the form of having live broadcasts of the pets as they sleep or play within the facilities of the hotel. This enables the hotel to stand out from its competitors since no other pet hotel within Manhatten has implemented a similar concept. Aside from this, most hotels do not have the same pick-up and delivery services that Allstar has. This creates an added level of value to the services of the hotel which make it more enticing. Given the higher than average saturation of upper-income residents within the city of Manhatten, this creates a business environment that is far more likely to bring in consumers to this specialize niche business compared to putting up the same business in a rural location like Napa Valley in California.

Environmental Forces

Social

There is little in the way of sufficient social impact from the business’s operations.

Economic

The industry is inherently vulnerable to shifts in the economy since it is considered as a non-essential luxury. As such, the company would need to prepare for a sudden loss of customers should a sudden economic downturn occur.

Technological

Technological competitiveness is not that serious a factor for this particular industry. This is because a pet hotel can be considered as being part of the broader services sector. While it is true that technology does play a factor in many aspects of the company’s operations, it is not necessarily an integral element.

Competitive

There are more than a dozen competitive forces within the Manhatten market, each with their own prices, services, and locations that will make it initially difficult for Allstar to penetrate the market. However, given the company’s unique approach to the pet hotel industry, it is likely that it should be able to carve out a sufficiently large niche within this market.

Regulatory

An examination of the regulatory environment within New York shows little in the way of significant government regulatory intervention in this industry as well as within the Manhatten area. This may be due to the niche market status of the company and relatively few people that can afford its services.

Competitor Analysis

The closest competitor to Allstar when it comes to similar services, value and location is D Pet Hotel in Chelsea. It has a superior location but similar services; however, due to the rental costs associated with its 10,000 square foot facility, D Pet costs 40 to 60 percent more than Allstar (the price increases to nearly twice as much if a client opts to hire the facilities specialized dog chef). D Pet Hotel also focuses primarily on dogs and does not accept cats; this is a business advantage that Allstar has over its competitor since it allows both cats and dogs.

While it is true that Allstar has smaller facilities, this means that it can operate at a lower operating cost with fewer pets compared to the massive rental costs associated with a 10,000 square foot facility in Chelsea. D Pet also does not offer the same live streaming services and does not have the online booking and pet pick up registration. Based on these factors, Allstar would have a competitive advantage over D Pet since it would have better and more convenient services while enabling it to operate at a lower price per pet due to the lower facility costs.

Market Development

To increase its consumer base, online advertisements and social media should enable the company to gain a greater customer base.

Marketing Tool

Sites such as Facebook and Twitter can be utilized by Allstar Pet Hotel in the same way that retailers use it to market and sell their products. The reason behind this is because the cost of utilizing Facebook or Twitter as an online marketing tool is quite cheap yet would enable the company to potentially target a lot of people. Using traditional advertising, while capable, is no longer sufficient given the sheer amount of competitors within Manhatten. What Allstar needs is an edge to immediately connect with its consumers, and social media seems to be one of the best ways to do it. This can be accomplished using Facebook’s online advertising platform combined with a social media page for Allstar the posts live streams and regular updates on the company’s business. By showing people what they can get from using the business’s services, it is likely to increase the number of people that patronize its services (Choi 781).

Diversification

In terms of diversifying its operations it can be seen that the Allstar Pet Hotel, by catering to dogs and cats, has in effect expanded its level of performance to encompass a significant percentage of the pet ownership market within the city and, as such, can be considered a step in the right direction for the company.

SWOT Analysis

Strength

The strength of the Allstar Pet Hotel within Manhatten is the sheer number of benefits that pet owners would receive. While it is expensive, it addresses all of their earlier concerns. This creates a certain degree of “hype” to try the services and experience of the business. The problem with other pet hotel services within Manhatten is that they either charge too much for the miscellaneous services they provide (ex: a personal chef for a dog) or charge less but, as a result, have fewer services. Allstar resolves this issues by not adding services that a dog does not really need and instead focuses on maximizing the value that a customer can derive from patronizing the hotel’s services. Live stream broadcasting, comfy and clean sleeping areas, adequate socialization with other pets, daily walks in the local park and nutritious meals that are created by the staff (not a chef) are all that is needed to keep a pet comfy and happy. Adding more services simply makes the costs unnecessarily high, and there may come a time when the appeal of utilizing such services may fade as customers realize that such services are excessive or unnecessary.

Weakness

The hotel’s relatively high prices, when combined with the current turmoil in economic markets, makes most guests shy away from even thinking of using the hotel’s services. It also isolates the consumer base of the hotel to a minuscule niche market and, as such, calls into question the long-term viability of the operation. One of the lessons that many luxury product oriented businesses learned after the 2007 economic crisis was that people would often cut luxury services out of their life first before doing any other form of cost cutting. Unfortunately, a hotel for your pet is likely near the top of that list and, as such, Allstar is vulnerable to shifts in the market where a recession is likely to significantly impact the company’s revenues.

Opportunities

Several opportunities exist for the Allstar Pet Hotel in the form of expanding their hotel chain to other countries abroad, creating discounted prices to entice customers to try out the hotel as well as utilizing online marketing platforms to attempt to reach a greater consumer base. As mentioned earlier, while the concept of a pet hotel is not unique, many of the present day pet hotels that operate around the world lack the live streaming infrastructure that Allstar will use as its selling point. Customers want to be reassured that their pets are doing alright and merely telling them over the phone or through an email is, at times, insufficient for them. Enabling to utilize a live streaming webcam in their dog’s room would help to assuage any of their worries resulting in a much more satisfied client. This same business operation can be applied to other potential Allstar branches that can be established in other major cities such as Tokyo, Paris, Brussels, Berlin or Boston. It is likely to

Threats

One of the main threats of the Allstar Pet Hotel within Manhatten is the presence of several pet hotels within the city. The competitors are likely to cause substantial issues for the company in the long term since they have already been well entrenched in their respective areas and likely have a loyal customer base due to the length of time that they have been patronizing that pet hotel’s services. The best way that the company could potentially counter this would be to have better and more efficient services that the other pet hotels cannot match within the short term. This would take the form of the company’s online booking and payment system, the pickup and delivery service as well as the live streaming webcams installed in the rooms and other facilities of the company.

Marketing Research Plan

The marketing research plan for this business would need to determine the current amount of upper-income consumer saturation within Manhatten when it comes to pet ownership. By doing so, the business will be able to identify potential customer patronage, which areas are more likely to respond positively to traditional and non-traditional methods of advertising and where the target market for the store is likely to originate from. Aside from this, the business would also need data on the number of customers that regularly patronize the potential competitors of Allstars, what factors contribute towards their patronage and what Allstar could potentially do to emulate this level of success. Lastly, since this business is likely to connect directly with seasons in which customers within Manhatten are more liable to travel, it would be important to understand which month have the greatest amount of customer vacations and hire temporary help during those periods due to the potential influx of a considerable number of people that would like to patronize the services of the business.

Conclusion

Overall, based on the data presented, the proposed business plan is likely to effective since it fulfills a need that and is sufficiently unique that it can compete with other competitors within this niche market. Since a need would arise for someone to take care of a pets while the owner is not around, this makes the services of Allstar likely to be sought out in the near future, especially during the winter months. While pet owners could conceivably leave their pets at home and merely have someone come in every day to feed them, this creates issues regarding the potential damage that unsupervised pets could cause in a Manhatten apartment. As such, it is likely that this business will continue to remain viable well into the future.

Works Cited

Armour, Philip, Richard V. Burkhauser, and Jeff Larrimore. “Levels And Trends In U.S. Income And Its Distribution: A Crosswalk From Market Income Towards A Comprehensive Haig-Simons Income Approach.” Southern Economic Journal 81.2 (2014): 271-293. Print.

Choi, Eun-Kyong. “Social Media Marketing: Applying The Uses And Gratifications Theory In The Hotel Industry.” Journal Of Hospitality Marketing & Management 25.7 (2016): 771-796. Print.

Connolly, David. “Dog-Friendly Hotels.” Pathfinders Travel Magazine For People Of Color (2016): 46. Print.

Coutré, Lydia. “Dogs Think Pet Hotel And Spa Is The Cat’S Meow.” Crain’s Cleveland Business 37.19 (2016): 0025. Print.

Florida, Richard. “The Boom Towns And Ghost Towns Of The New Economy.” Atlantic 312.3 (2013): 52-58. Print.

Li, Bethany Y. “Zoned Out: Chinatown And Lower East Side Residents And Business Owners Fight To Stay In New York City.” Asian American Policy Review 19.(2010): 91-97. Print.

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