The North Shore Youth Hostel
Eliza Preiswerk, Taya Mcastocker, Katie Razavi, Bianca Velasco
“We aim to provide an affordable, authentic North Shore experience.”
100 Lonsdale Avenue, North Vancouver B.C.
Table of Contents
EXECUTIVE SUMMARY
PAGE 1
COMPANY OVERVIEW
PAGE 2
CREST ANALYSIS
PAGE 3-7
COMPETITIVE SITUATION
REGULATORY AND POLITICAL SITUATION
ECONOMIC SITUATION
SOCIAL/CULTURAL SITUATION
TECHNOLOGICAL SITUATION
CONSUMER AND CHANNEL ANALYSIS
PAGE 7-14
TARGET MARKET ANALYSIS
1. MARKET CHARACTERISTICS
2. BUYER CHARACTERISTICS
3. VALUE CHAIN (MEANS END)
4. THE BUYER DECISION PROCESS
5. BARRIERS TO ADOPTION
6. THE BUYING UNIT
7. USAGE PATTERNS
CHANNEL ANALYSIS
1. CHANNEL CHARACTERISTICS
2. VALUE CHAIN
3. RELATIONSHIP WITH TM’S
SWOT ANALYSIS
PAGE 15-17
STRENGTHS
WEAKNESSES
OPPORTUNITIES
THREATS
PRODUCT STRATEGY AND ACTIONS
GENERAL PRODUCT DECISIONS
POSITIONING AND BRANDING DECISIONS
PRODUCT FEATURE DESCRIPTION AND DECISIONS
PRODUCT SERVICE DESCRIPTION AND DECISIONS
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INTANGIBILITY
INSEPARABILITY/SIMULTANEITY
PERISHABILITY
VARIABILITY/HETEROGENEITY
PAGE 17-23
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3 NEW P’S
POINTS OF CONTACT
PRODUCT LIFE CYCLE
ADOPTION PROCESS
PRODUCT FROM THE CONSUMER’S POINT OF VIEW
DISTRIBUTION STRATEGY AND ACTIONS
PAGE 23-24
GENERAL DISTRIBUTION CONSIDERATIONS
DELIVERABLES
4. OVERALL DISTRIBUTION STRATEGY
5. LOCATION
6. OBJECTIVES AND ACTIONS FOR EACH INTERMEDIARY GROUP
PRICING SRATEGY ACTIONS
PAGE 25-27
COSTS
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STARTUP COSTS
LAUNCH COSTS
OPERATING COSTS AND OVERHEADS
COSTS SPECIFIC TO ONE ACTIVITY/EVENT
COMPETITIVE PRICING
CHANNEL PRICING
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PRICING PRODUCTS WITH COMMISSIONS
CONSUMER-LEVEL PRICING
PROMOTIONAL PRICING
METHODS AND TERMS OF PAYMENT
YIELD ANALYSIS AND MANAGEMENT
PROMOTION STRATEGY AND ACTIONS
PAGE 27-28
FACTORS TO CONSIDER
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PROMOTION FOR SERVICES
THE BUYER DECISION PROCESS
PLC, DIFFUSION OF ADOPTION, BUYER-READINESS, AND AKLPAP
THE BUYING UNIT
CHANNELS
PUSH OR PULL
COMPETITION
BUDGETARY FACTORS
CONCLUSION
REFERENCE LIST
PAGE 28-29
PAGE 30
EXECUTIVE SUMMARY
At the North Shore Youth Hostel we promise to provide each of our guests with an
authentic North Shore experience. We have worked hard to combine our staff and
management’s passion for the tourism industry with our enthusiasm for the area and all it
has to offer. We aim to make a lasting impression on every guest who walks through our
doors, whether for a drink, a night, or numerous weeks. North Shore Youth Hostel goes
above being just a place to lay your head; we are a community. We provide a place for
our guest’s to feel at home, when in a new area.
Our target markets can be broken down into three segments: students, international
backpackers and safety conscious travelers. Our restaurant and bar targets hostel guests as
well as locals looking for a casual drink or bite to eat.
We provide our safety conscious customers with a secure location, in the quiet area of
Lower Lonsdale. We are located away from the busy party scene downtown, are close to
the sea bus and other forms of public transportation, and have staff on hand 24/7.
Our location is not only perfect for safety conscious travelers, such as solo women, but
for the outdoor enthusiasts as well. The North Shore Mountains are just a quick bus ride
up the hill and Whistler and Blackcomb Mountains are just under two hours away. In the
summer months, hiking, kayaking, paddle boarding and diving spots are all close by!
The North Shore Youth Hostel is co-managed by Eliza Preiswerk, Taya McAstocker,
Katie Razavi and Bianca Velasco. Our responsibilities are divided as follows:
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Eliza Preiswerk: Facility manager
Taya McAstocker: Bar manager
Katie Razavi: Administration, marketing and sales
Bianca Velasco: Front desk, customer service
Because we are the only accommodation of this type in North Vancouver, we are able to
set our prices slightly higher than our Downtown competitors while still remaining safely
in our target market’s budget range. The standard room rate is $40 a night. We predict
this will be a very lucrative institution as we progress and build a reputation and prices
will vary during low and high seasons.
Our primary sources of publicity are through word of mouth, HelloBC, LoneyPlanet,
mountain resorts, and Capilano University. Through our advertising we have started to
build a strong customer basis. A huge component of this base comes from Free and Easy
Travel, a young adult travel company who books with us for all trips to Vancouver.
COMPANY OVERVIEW
The North Shore Youth Hostel was formed in 2010 and has been gaining popularity with
budget travelers in the Vancouver area on a steady basis. We pride ourselves on our team,
who are not only well versed on the area, but have come together to provide a memorable
experience for all of our guests. The four founders of N.S.Y.H have brought together
their combined passions for travel and their city to offer a truly unique experience.
While many hostels in the Vancouver area are located in the heart of the city, North
Shore Youth Hostel is located on Lower Lonsdale. This location allows not only quick
and convenient access to the sea bus, shops and restaurants, but a shorter commute to the
mountains and natural side of Vancouver.
N.S.Y.H aims to provide a fun and relaxed hostel at an affordable price for young
backpackers on a budget. We pride ourselves on the feeling of community we have
created in our hostel. Our primary target market is international backpackers in their
twenties, but we also try and create a place for domestic visitors.
In addition to a place to stay (which includes dorm style or private rooms), we have a
small bar with an assortment of snacks, a games room, coin laundry, and free linens and
Wi-Fi. Our front desk has shot glasses and t-shirts for sale. Staff is always available to
help guests plan their stay, offer information on attractions, events and activities, and
guide guests to browse through a selection of brochures and maps.
At the North Shore Youth Hostel we offer the best of both worlds: the busy city is only a
Sea-bus ride away and the outdoors just a short ride on the bus. We offer personalized
information and a memorable experience.
“ We aim to provide an affordable, authentic North Shore Experience.”
CREST ANALYSIS
Competitive Situation
General Competitive Environment – The Industry
Room revenues in British Columbia surged ahead 12.2% to just under $1.96 billion in
2010 (BC Stats 2010). There is a large selection of hotels and hostels in Vancouver,
especially in the downtown area. On the north shore, where our hotel will be located,
there are only few budget hotels. In the downtown Vancouver area there are eight main
low-end hotels/hostels; on the north shore there are three; in Burnaby there are four, and
in Squamish there is only one relatively cheap hotel available. (Hello BC) Most of the
hotels are located in the center of the city, and few are dispersed outside of Vancouver.
Thus why we decided to locate our hostel on the north shore, where fewer
accommodations for young travelers are available, but where transit is easily accessible.
In terms of hostels, there are a few popular ones that compete against each other. Prices
for hostels in Vancouver are generally around $30 per night, with variations increasing
and decreasing. Most hostels provide services or perks, often at an extra cost, such as
breakfast, Internet access, coin-laundry, lockers, towels, and guided tours of the city. The
hostels in the downtown area are usually located in areas with easy access to transit, such
as the bus or the sky train.
On the north shore, all accommodations are along the bus route. In this industry it takes
time to enter the market, as a businesses need to promote their product in order to gain
clientele, especially ones that will return. With hotels, capacity cannot be easily added.
When planning the infrastructure of a hotel, a certain number of available
accommodations are created and cannot be modified, at least not easily, unless a huge
reconstruction of the building is put in process.
Seasons most definitely affect the industries sales, as most tourists come to visit in either
the winter or summer seasons. Exchange rates would also have an impact on our industry
sales, as most of our customers would probably be international travelers.
Analysis of Specific Competitors
The three specific competitors analyzed were C&N Backpackers Hostel, The Cambie and
Grouse Inn.
C&N Backpacker Hostel has five hostels in British Columbia. Two are located in the
Vancouver area, and three on Vancouver Island. They are part of the Backpackers Hostel
and can be seen advertised on their website, Facebook, Vancouver and Island Hostels and
Tourism Vancouver. The offer a number of amenities including free linen and towels,
free Internet and city maps, bike rentals, and a pub-crawl. Their rates start at $20 for a
dorm style room, which has three or four beds in it. They also have double rooms
available for $50. This hostel promotes its accommodation through their website as well
as being listed on hostelworld.com. Their main target market is travelers and outdoors
enthusiasts looking for an affordable place to stay in a convenient location (such as close
to the mountains). Their peak seasons are summer as well as winter for winter activities.
(C&N Backpackers website)
The Cambie has two locations in Vancouver, one in Gastown and one in the main
downtown area, and there is another location on Vancouver Island. They are centrally
located and offer lockers, free linens, Wi-Fi and a basic breakfast. There is an on-site
bakery/café and pub. The Cambie has a selection of rates to suite travelers’ needs,
starting at an eight-room dorm for $25 a night to a two bed with en suite for $70. There is
a loyalty promotion called the Cambie Card which costs guests $10 and gives them a
discount of $3 a night as well as 10% off of merchandise and deals for tours, shops and
more. The Cambie advertises on their own website and Facebook. (The Cambie Website)
The Grouse Inn is a budget hotel on the North Shore. Its rooms start at $84 a night. The
Grouse Inn targets families and business traveler’s more than young backpackers. They
have a pool, rooms where pets are allowed, a playground, continental breakfast, a
meeting room, and luggage storage. The Grouse Inn is owned by Mayfair, a large
company with many hotel names. This means they have a higher budget and more money
coming in than a small hostel would have. The Grouse Inn also has a website along with
a Facebook page. (Grouse Inn Website)
We compete on a regional level with other hostels and budget hotels in the Vancouver
area. The main segment of the market that we are competing for is the young backpacker
traveling on a budget.
Regulatory and Political Situation
Liquor Laws/Licensing
The legal drinking age in British Columbia is 19. Bartenders should verify the
purchaser’s age by looking at two pieces of ID, one government issued with the person’s
name, signature, picture, and most importantly: their birth date. Examples are a driver’s
license or a passport. They should also look at a secondary piece that has the purchasers
name imprinted on it. Servers have the right to refuse service if they have even a single
doubt about the identification. Guests of the Hostel are not allowed to drunk outside.
Nobody can bring his or her own liquor into the bar.
The bar itself needs a Liquor-Primary License. It takes seven to twelve months to get a
liquor license. We can ask the government to let us serve alcohol anywhere from 9:00 am
to 4:00 am but the government can decide to limit those hours. Food and non-alcoholic
beverages must be sold, and must be a fair price. Minors are not permitted on the
premises unless they are entertaining.
The fee for liquor licensing for a business that buys $12,000 to $20,000 of alcohol each
year is $500. We also have to pay a license renewal fee for the first year that costs
$2,200, and after this the fee will depend on the amount of alcohol sold each year. We
also need to provide proof that we own a business. Once we become licensed we need to
have a copy of our license in a “prominent” place. We cannot sell only one company’s
product or promote only that company’s product. (Ministry of Public Safety and Solicitor
General, 2011)
Business License/Regulations
We can download a business license application form at cnv.org, as well as review our
status and renew our license. The same site states all the business licensing bylaws. We
are not permitted to run our business without a license, the license must be on the
premises, the fee is $2, 341 for the hostel, and for the liquor primary it is $636 for 10
seats and $73.00 for every additional ten seats per year. (DNV, 2011)
Environmental Laws
We are allowed to be noisy on weekdays and Saturday from 7:00am to 10:00pm, and on
Sundays and Holidays from 10:00am to 10:00pm without being fined.
Promotion Regulations (Advertising Laws)
We can only have one name sign on our building, and it has to face the street. The sign
can only be as big as 15% of the building front and can be no bigger than six square
meters. The sign must be well maintained and safe. The sign cannot block doorways or
balconies and cannot block windows. We cannot have third party signs. (CNV, 2011)
Taxation Rates and Incentives
The interest on a business loan is between 1 to 5%, as stated on
buisnesscashadvance.com. The tax rate in BC is 12%.
Labour Standards (Hours, Benefits, Pay)
Our business operates a 24-hour, 7 days a week, so we do not have posted business hours.
For the bar in our establishment the hours are 9:00am to 2:00am, everyday of the week.
The minimum wage in BC is $9.50 as of November. Our employees are not permitted to
work more than 5 hours without a 30-minute meal break; however we do not have to pay
for their break. We also do not have any obligation to provide a coffee break. If an
employee comes into work but gets sent home they must be paid for at least 2 hours even
if they did not work that long. Employees must have at least 8 hours off between shifts
except if there is an emergency. If we decide to hire any employees under the age of 15,
they must have a written note from their parents allowing them to work. (CNV, 2011)
Insurance and Liability
Liability insurance can be purchased to protect employees and clients. Commercial
insurance covers all other aspects such as destruction, vandalism, theft, vehicles and
more.
Economic Situation
Economic Cycle and Growth Rate (For Each Target Market)
The amount of people age 20 to 24 in Canada is only about 3% of our population, based
on atlas.nrcan.gc.c’s population pyramid. Afterwards the people who are going to head
into this age group is still small, so we will have to work hard to make our hostel stand
out among the others.
Below is a chart exemplifying the number of international visitors Canada welcomed in
the year 2010. This goes to show that there is room for many travelers to visit Vancouver
and subsequently stay at the North Shore Youth Hostel conveniently.
(Source: http://www.bcstats.gov.bc.ca/pubs/pr_tour.asp)
Exchange Rates (present and trends) and Stability of Currencies
As of September 27, 2011, the exchange rate for $1 Canadian is $0.97 American. This
rate changes incredibly often, however it’s never too drastically different so it is stable.
Spending Patterns and Disposable and Discretionary Income of Target Market
We know the spending patterns of our target market because we are part of that group.
We do not have much money at all; we may have a disposable income if we work and
still live with our parents, or if we have already started our careers but it is likely still not
going to be a high amount. Our target market doesn’t have any extra money to spend on
anything much more that their needs. If our target market is not paying for
accommodations it is most likely that they would buy whatever they wanted or save their
money.
Inflation Rates and Interest Rates
The tax rate in BC is 12%.
Social/Cultural Situation
The social groups that would utilize our product would be more outdoor recreation
groups, or traveling groups. The majority would be young adults with an easy-going
lifestyle, just passing through our town with intentions of staying in an accommodation
with a very social setting. The client demographics for our product, as mentioned earlier,
would mainly consist of young adults, those of which come from various parts of the
world. The demographics and culture of our target market affect the behavior towards the
North Shore Youth Hostel in a positive manner. This way, our clients will refer our
company to their friends and family who are potential customers for the future.
Furthermore, the main prevailing situations that may affect our company are: the
economy and competitors around the area. If the economy is in a downfall, travelers will
either choose to postpone their vacation for the time being or decide to spend their money
in cheaper locations, or where they get more value for their money.
CONSUMER AND CHANNEL ANALYSIS
TARGET MARKET ANAYLSIS
Market Characteristics:
Hostel Market Characteristics:
The three specific competitors analyzed were C&N Backpackers Hostel, The Cambie and
Grouse Inn, which were discussed in detail earlier in our Analysis of Specific
Competitors. The competition would be intense if we were located in the downtown area
where there are already several hostels, but since the N.S.Y.H. is the only hostel located
in lower Lonsdale, there will not be much competition in that location.
The benefits, product characteristics and service level our “outdoor enthusiast” customers
will be seeking are quite different from our “safety conscious” customers. The outdoorsy
target market will be seeking a comfortable yet affordable accommodation that is simply
a place to sleep, without caring much about any luxury components. Additionally, the
availability of our coin laundry facility will be very beneficial for that target group as
they will be doing outdoor activities and will likely get dirty and require more cleaning
than usual. A towel will be provided for each guest, which this target will look at as
another benefit. Convenience is important to this target market, and with the addition of a
space to lock equipment in this target market will be greatly satisfied. This target group
will not require much service other than information about the city and transportation.
The requirements will be similar for the “local students” target market as they will be
close in age to the “outdoor enthusiasts”. Communal space to hangout and meet other
travelers at will also be a benefit for these target groups. Our hostel offers a game room,
TV, and comfortable seating.
The benefits, product characteristics and service level for the “safety conscious” target
market will be slightly more detailed. As safety is key to them, and since this group is
more skewed toward women, the location of the hostel is of utmost importance. The fact
that it will be located away from the city lights and noise is a great perk, and the lower
Lonsdale area in which our hostel is located is relatively safe and busy enough for our
consumers to not be roaming the streets alone and unsafely. This segment will be looking
for better quality of service, however they are staying in a hostel, and are paying lower
prices. This target market is more likely to desire private rooms as opposed to our shared
dormitories.
Our outdoorsy target market will be using the facility during the busy touristy seasons:
summer and winter. As their main aim is to enjoy the outdoor tourism activities such as
Whistler Mountain, Grouse Mountain, Cypress Mountain, etc., they will not be as present
during the low tourist seasons. As for our “safety conscious” target market, they will be
more sporadic, in attendance as their interests vary from outdoors to culture and art, and
thus they will come year-round to enjoy the cultural aspect of Vancouver, visiting its
museums, galleries, and restaurants. The “student” target group will be mostly using the
hostel before and during the beginning of the school year or semesters, around August,
September and January.
In terms of environment factors, the weather conditions will definitely affect the number
of guests we get from the “outdoorsy” target market group, as they will primarily be
coming to enjoy outdoor activities. If there is little snowfall on the mountains one season,
most likely the number of “outdoorsy” visitors we get will decrease.
For the ‘safety conscious’ group, any political issues or protests that might disrupt the
peace in the community might affect their willingness to travel to Vancouver and thus
stay at N.S.Y.H. That being said, all three of the target markets will be affected by any
major political conditions. Weather and environmental conditions will likely not affect
the attendance of the “safety conscious” market, and wont affect the “local students”
target market at all.
Bar Market Characteristics:
As we have two target markets for our bar/restaurant, there are different benefits to attract
each market. The first target group will be the customers staying at the Hostel as guests,
who will have the option of eating a cheap meal at our restaurant, or have a casual
beverage at the bar in the evenings. This specific market will be looking for affordable
and simple products. If they desire to experience a more cultural and authentic type of
food, there are many restaurants located nearby to fulfill their needs. Our bar will be very
basic and will provide a space to socialize while eating and drinking.
Our second target market will be locals from the area wishing to simply go out and enjoy
a casual drink in the vicinity. They will also be looking for reasonable prices, and a
social atmosphere where they can unwind and enjoy.
2. Buyer Characteristics
Our outdoor enthusiasts will range in age from approximately 18 to 30 years old. They
are international and domestic travelers looking for an outdoor experience, with easy
access to those areas by using a good transportation system (BC Transit). The target is
skewed towards males. These people want an escape from the city, but to still have the
city available if they change their minds. They want a comfortable, laid back environment
where they can relax after a busy day on the mountains or exploring the outdoors.
Outdoor enthusiasts are most likely to come during Vancouver’s high seasons: summer
and winter.
When we advertise to this market, we will use travel and sports magazines, as well as the
Internet, with sites such as Facebook, Twitter, and Hostel-specific sites. We would also
have brochures and pamphlets available at sport clothing and equipment stores, and on
the local mountains at purchasing centers. A chasm to cross would be to get our hostel’s
name out there, and to be known as the ideal accommodation for outdoor enthusiasts in
the region of Vancouver. We are hoping to transform many of our customers into clients
that would return frequently during peak seasons. We will do this buy building a strong
customer relationship.
Our next target market is the hostel is the safety conscious. This category of our target
markets would be skewed more toward women than men, with age ranging roughly from
the late 20’s to early 30’s. This targets solo-travelers that would find more safety in our
location in peaceful North Vancouver than they would in busy downtown. This target
market would also prefer a quieter environment away from noisy travelers, which they
will get in private rooms. These clients would not necessarily be traveling for the purpose
of ‘partying,’ but instead to focus more on the cultural and exploratory side of the city.
A chasm to cross with this target market would be that they might be hesitant of the
location not being directly downtown, however we will focus on advertising how easy it
is to access downtown via the sea bus which is located just minutes away from the hostel
itself, and how much safer our location is. Another issue is the fact that we are a
relatively new hostel, and most travelers want to stay in a place with a reputation. While
we do not have the longevity that many of Vancouver’s hostels have, we are constantly
trying to build a positive reputation.
Our short-term domestic market will be geared towards students and out of town guests
who needed to find a place quickly and easily, for only short-term accommodation.
Students moving for school are looking for a rental but need a place to stay in the mean
time. Our hostel would be the perfect place to fit the needs of those who are looking for a
permanent accommodation but haven’t yet found it. These guests are looking for a
comfortable, social environment where they can easily make new friends and adapt to
their new environment. N.S.Y.H thrives to provide plenty of information to help to make
our customers feel at ease. This particular target market looks for convenience, low prices
and friendly service. There age ranges from 17 to 25. To advertise to this target market
we will put posters up around high schools and universities, at local libraries, and provide
BC Ferries and other areas around Vancouver Island with brochures.
Our bar’s target market is comprised of all our other targets that have become hostel
guests, as well as locals. The hostel guest will come to the bar because they are looking
for a convenient place to eat and drink. This market is geared towards people who do not
want to experience fancy restaurants but still need to eat. Our location is close to other,
nicer restaurants, in case they change their mind or happen to be the type that wants to go
out. We want to provide this market with a place to have a casual drink, appetizer, or
basic meal after a busy day on the mountain or out exploring.
Our local clients are residents of North Vancouver. They will use the bar in the evening
and through the night. It will be a comfortable, simple place that provides customers with
affordable food and beverage services. There will be no dress code, it will just be a very
casual place to meet people and enjoy the positive atmosphere. A chasm to cross with this
would be the nearby competition of bars and restaurants located on lower Lonsdale.
Strong advertisement is going to be required to attract customers. This bar is known for
its highly social and friendly atmosphere, but not necessarily for the selection of food.
3. Value Chain (Means End)
The location of our hostel is the primary factor that motivates the outdoor enthusiasts to
choose our accommodation. The consumer chooses our product because of the
convenience of transportation to outdoor activities like the mountains and nearby ocean.
Our hostel satisfies a sense of belonging and safety to our consumers, especially the
‘safety-conscious’ ones because the location is in a safer environment. The reasonable
prices are a motivator for all of our target markets because they are not looking for a
luxurious accommodation, but instead more of a convenient and homey-feeling place.
4. The Buyer Decision Process
Need Recognition
Our customers require our services when they need a place to stay in North Vancouver.
They are likely to stay in winter to be close to the mountains, and they are likely to stay
in summer so that they are closer to the beach. Our hardest times to attract customers will
be in late spring and late fall, when it’s too cold for the beach but there is no snow.
People come to hostels because they want to travel but are unable to afford most
accommodations. They realize they need to come to a hostel when they find out through
external resources how much other types of accommodation, such as hotels and motels
cost. They decide these things usually before they leave for the location, often weeks and
months in advance. People will use our hostel to satisfy their need for travel in a costfriendly way. In addition to cost, most guests at a hostel want the social atmosphere that
is not available at a hotel.
Information Search
The customer will first have an internal search for information, thinking of places they
have already been to, have heard of, and have been told about. Then they will do an
external search. If they know where they want to go, they will call the hostel and find out
prices or check online. If they have not decided, they will likely check the internet for
good deals, check out reviews, and may even go to a travel agent for help. Because our
customers are unlikely to have limitless funds, they will probably have to do a lot of
searching to find somewhere at the right price. They will probably also look for a good
location, and our customers will want a location that is close to the mountains or safe on
the North Shore. Customers will also need to ensure that the hostel they choose has
availability, and may want to find out about meal options.
Evaluation of Alternatives
Our potential customers will have to consider a few things when they are searching for a
place to stay. Of course they have to choose a location that suits their needs. Customers
will have to find another place if our hostel is fully booked, or there is some unexpected
problem that causes the hostel to be unavailable. They will likely look at the hostels
downtown, like The Cambie, because they would like a cheap price, however in that case
they lose out on being close to the outdoor activities. If they choose to stay on the north
shore, they will have to pay more to stay somewhere like The Grouse Inn. Our clients
likely would not have many alternatives because our product is very unique and nothing
can compare. They will probably have a maximum of three extra accommodations in
mind.
Purchase
The purchase will most likely be made over the Internet on our hostels site or a travel
website, over the phone speaking with the hostel directly, or in person upon arriving at
the hostel. The product is consumed every night. If we do not sell a bed, we lose money;
there is no inventory for our business. Guests can pay with credit, debit, or cash.
Post-Purchase
When the customer completes their purchase, they will receive a receipt. With online
purchases there will be a print option and when in person they will receive a paper
receipt. When making the purchase over the phone they will receive a confirmation
number and then we will email a printable receipt. They will be required to pay a deposit
to ensure nothing is damaged. After their stay they will leave, we will clean the place up
after them. They will not get to take anything home with them other than memories or
purchased items. We are hopeful our product will be consumed frequently but it will not
always be by the same people. We do hope for repeat visits but is not our main goal.
People will want to come back if they had a good experience and found our hostel to be
of good value. They will remain loyal for the same reasons; they may be more loyal if we
send the coupons, or thank you cards. Customers are satisfied if all their needs and wants
are fulfilled. We will be able to fully provide them with satisfied needs quite easily, and
we will supply them with the resources to satisfy their demands.
Barriers to Adoption, Use, etc
Our target market will have a cost barrier. They are looking for very affordable places
and if we cannot provide them with an affordable price then they will not purchase our
product. They should not have any problems with access because Vancouver has an
excellent transit system that will bring them from the airport straight to the hostel, or
from the ferry.
The Buying Unit
The members of the buying unit are the initiator, influencer, decider, buyer and user.
Because of the kind of service we provide, it is likely that one or two people will take all
these steps. Let’s say two people are together, they will both split the price, choose where
and when to go, make all other decisions together and they go together. The initiation
might only be the result of one person, but then the other will agree. Mostly we need to
communicate with the person/people paying.
Usage Patterns
Our product will be used mostly in summer and winter, as stated earlier. Our product is
used to stay overnight in. People need places to stay in overnight any time they are not at
home, so our product is always needed. We just need to worry about competition. People
may use our product more than once if they become loyal customers and really enjoy
their stay.
CHANNEL ANALYSIS
1. Channel Characteristics
Our primary advertising channels would be Vancouver area Visitor Centers, and Lonely
Planet advertising as well as a review in their book. There would also be advertisements
in general interest magazines, such as snowboarding, mountain biking or backpacking
magazines.
Free and Easy Travel is tour company for young adults with whom we have a partner
ship. They guarantee us their business when their tours come through the Vancouver
area; in return we offer them a low rate and a 10% return in revenue from their room
sales.
Lonely Planet is one of the leading travel guidebooks for backpackers. According to their
website, they receive “more than 4 million unique visitors per month. According to [our]
research, 57.5% of our audience is male, 42.5% female. The bulk of our audience fall
between the ages of 18 and 34, though over 24 year olds make up a majority of that
number.”
“Our audience is educated – 67.5% have at least one basic degree. 65% earn over
[$60,000 US annually]. A majority of this audience are independent, frequent travelers
who have been to more than 4 countries and plan to visit more. 85% of our travelers
frequently use the internet as a source of information before or during their
travels.”(LoneyPlanet)
This fits into our target market very well. Lonely Planet is a trusted travel resource that is
more than just advertising; it is peer reviewed, and accommodations being in their book
or on their website is a huge advantage in marketing. Lonely planet is widely used by all
of our competition so it is a very important channel to market through. Considering the
statistics, they represent a huge component of our potential business.
Hello BC is another channel for us. We are an approved accommodation. This offers us
access to millions of potential customers, all of the resources that Tourism BC offers such
as brochures in over 100 visitor centers and onboard all BC Ferries. This service is
around $250 a year, a small price to pay to give us access that we could never receive on
our own. As Tourism BC is the governing body for standards in BC this ensures our
guests that we are a clean, safe, and legitimate establishment.
2. Value Chain
The tourist experience starts from the moment you leave home until the moment you
return. Our hostel is committed to making a memorable experience for all of our guests.
From us, the four owners, to our support staff, to our guests, everyone is part of making
the experience at the North Shore Youth Hostel memorable and positive!
The moment a guest walks into our establishment a staff member is there to welcome
them and check them in. We strive on making our guests feel at home and feel as though
they are a part of our comfortable community. Once they are checked in we offer the
opportunity to socialize in our games room, grab a beverage in our bar, or a purchase a
snack or meal. We bring everything we can to the table to help our guests and make sure
their experience was everything they hoped for. To further enhance their experience, we
offer help in planning trip activities with extensive information on local attractions and
events.
Considering we are the primary staff of the hostel, our attitude towards our customers
directly influences our business. We hold the majority of the responsibility. We do
everything we can so that we build a lasting relationship with our guests and help make
amazing memories for them.
3. Relationship/relevance with TM’s
The target markets for our hostel are essentially sought out through our channels;
therefore is it crucial that we maintain relationships and loyalty with Free and Easy
Travel, Vancouver Visitor Centers, Lonely Planet, and general interest magazines.
Maintaining business with these channels will further help with any travel planning, and
enhances their knowledge of establishments such as the North Shore Youth Hostel. Since
its not located in your typical Vancouver scene, our channels help reach out to our target
markets that may be coming from long distances and assist in driving them towards our
unique location.
With the location of our hostel, our target market for the bar, the locals, will be constantly
passing through after getting off school or work. Therefore reliance on channels does not
play a huge part in this because locals generally rely on ‘word of mouth’ when it comes
to local products. However, keeping contact with channels like Lonely Planet are still
vital in generating business. Reviews and information provided by this channel may
reflect whether or not our bar is the ‘right place’ to go for a casual drink.
The North Shore Youth Hostel relies on our channels to help distinguish our hostel as the
leading place for accommodation on the north shore. Keeping relationships with Free and
Easy, Vancouver visitor centers, Lonely Planet, and general interest magazines help
provide valuable information for future consumers. These channels help achieve our main
target markets through promotion and advertising, and assisting our customers with their
planning process. Maintaining interaction with our channels is relevant for our company
because they can provide more useful resources and information than we, as a small
establishment, have enough funds to produce. For our company, having these relations
creates a large impact because they help generate the majority of our business.
SWOT ANALYSIS AND OBJECTIVES
Strengths
 Only hostel on the North Shore
 Experienced staff with strong knowledge of area, and well versed in business
 Close to downtown via sea bus, close to mountains
 Quiet safe environment
 Connections with Capilano University or student temporary housing
 Partnership with Free and Easy tours
 Close to restaurants and shops
Weaknesses
 General Business success
 Location
 Seasonality
Opportunities
 Competition Weaknesses
 Increase in target market
 Acquisition
Threats
 Competition
 Variability of Demand
 Strict Regulations
 Rising Gas Prices / cost of travel
 Pricing – too low become a flop house, to high lose our target market
Objectives
1. To attract students to use our hostel as temporary housing while looking for
permanent living
2. To build a strong community base for domestic/ local travelers
3. To gain patronage from international backpackers
Strategic Focus
Strengths
While Vancouver does have a large number of Hostels in the down town area, we are the
only hostel on the entire north shore. This means we have an entire market to ourselves.
Anyone looking to get away from the busy streets and the party scene has a perfect
escape with our hostel. We still offer the option to have a few drinks in our bar, but in a
quieter, more relaxing environment. Our entire staff has grown up in the area, and has
extensive knowledge of actives, tour options and history. We have all graduated from
Capilano University, so we have a strong sense of business and the tourism industry.
Being located on lower Lonsdale, we are very close to the sea bus and bus loop. This
means while we are not right in the hustle and bustle of the city, it only takes fifteen
minutes to get there if that is what is desired. The north shore is a safer community,
which means our target market, which in some cases is skewed towards women, can feel
safe and secure while visiting the city. Having partnerships with Free and Easy means we
have a guaranteed rooms booked through out the year. This takes off some of the stress of
trying to sell rooms in slower seasons. Being located on Lonsdale means there are a ton
of restaurants to choose from to satisfy everyone needs.
Weaknesses
We may have issues with general business success, where the company is struggling to
gain momentum and recognition from consumers, due to being located in a new location
where no other hostels exist. Once recognition and popularity will increase, our business
will generate more income and success. Our company does not have much money to
increase marketing communications.
Since our hostel is located on the North Shore, some customers might prefer to be more
central to downtown, and choose to stay with our competitors in downtown Vancouver.
Our outdoor target market might also choose to stay in Whistler, or even closer to the
mountain resources, like at the Grouse Inn. This is fixable through promotion as there are
many advantages to our location, such as easy access to transportation, and a quieter and
safer environment than the downtown scene.
Seasonality is a weakness for our Hostel. It will be popular during the summer and winter
seasons but slower during the low season. This is why we are promoting how
advantageous it is to stay in the safe and quiet environment of our hostel, directed
towards our customers that are more interested in the city’s culture, which can be
explored at any time of the year.
Opportunity
Our hostel has a few opportunities. Being in North Vancouver, we can make our location
popular, and when there is a greater demand we can acquire another property to further
grow our business. We also can use the weakness other accommodations have, which is
that they are in busy locations and are not located in ‘safe’ areas.
If our operations are successful, we can also increase our target market. We could add
more promotions towards travelers coming from other Canadian provinces, or increase
our food services to get more customers from the community.
Threats
Vancouver is full of hostels and low cost hotels, which have an immediate effect on the
number of guests we receive at our hostel. We do have an advantage being the only, and
the lowest priced, accommodation in North Vancouver. But this may not always be the
case, and we have to be aware of the threat of other hostels and low cost hotels invading
out territory.
Competitors also cause a problem when they have better rates than ours. Even though all
of Vancouver’s other hostels are downtown, potential guests may find the difference in
price by staying downtown and paying to travel across the inlet is worth it compared to
paying more to stay at our hostel, even though we have a great location. Furthermore, any
competition will cause us to have a smaller market share and to make less of a profit.
We are very price sensitive. If we raise the price to stay at our hostel to an amount that is
too much for our target market, we will lose them. But if it is to low, we have the risk of
becoming a flophouse. We have to be very careful not to do this. If we lose our target
market we will lose profits, and may have to spend our funds on attracting these people or
changing our target market. This could also cause us to lose our staff or pay them smaller
wages. Another problem that may cause us to lose our target market is the rising cost of
gas, which leads to higher transportation expenses. We expect much of our target market
to fly in, but if prices are too high they will no longer come. To deal with this we will
have to focus more on local clientele.
BC has strict liquor laws, and because we have a bar in our hostel, we will have to make
sure that we do not allow anything to happen, due to staff or customers, that will cause us
to lose that license. We also have to make sure to follow sanitation guidelines and be
ready for food and safety inspectors.
PRODUCT STRATEGY AND ACTIONS
General Product Strategy and Actions
Our hostel is located on lower Lonsdale. We have 21 rooms. Thirteen are private and
eight are dormitory style. Our 13 Private rooms have two beds. Five of our dormitory
rooms have four bunk beds; the other three have five bunk beds. . There is a communal
bathroom on the second and third floor with five showers, five toilets, sinks and mirrors.
Each room also contains lockers. In addition to our rooms we have a restaurant and bar,
and a games room. Our games room has a pool table, a dartboard, and a couple of small
tables for playing cards, a television, and couches. We have a range of board games as
well. Our bar is a basic set up; everything in the bar, like the rest of the hostel, is mix
matched. We are going for a very eclectic theme. In our front check-in area we have
couches for waiting guests, and area with maps, brochures, and photo albums of the area.
There is also a computer and a TV. Our hostel offers:
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Free linens and WIFI
Desktop computer with a small fee
Coin laundry
Booking information and assistance
Wide selection of maps, brochures and information
T-shirts and shot glasses for sale in the lobby
Floor Plan:
Service
We aim to offer a high level of service, within reason. It is a very basic hostel and we
really want our guests to feel at home, so while we will try and help our guests with what
ever they need, they will not experience the service level that one might expect at a five
star hotel.
Ambiance and décor
The facilities are basic. We focus on comfort, not decor. We have pictures of the area
around the whole hostel, and try and bring in work from locals. The walls are funky
colors; and each room is painted a different color.
The Bar and Restaurant
The bar is very simple. It is within a fifty-seat restaurant. We have the standard liquors,
with a selection of domestic and imported bottled beer. Granville Island beer is on tap.
Our menu changes nearly every day, but the basics are as follows:
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Breakfast: made to order omelets, toast, fruit salad
Lunch: soup, salad, sandwich/Panini of the day, an assortment of baked goods
Dinner: no formal dinner, a selection of tapas
Since we have such a small restaurant and it is not the main focus of our hostel, we have
decided to do a very simple menu that changes regularly. After we learn the favorites
among our guests, certain menu items may be added permanently.
Once a month we do an “evening in the dark.” We turn off all the lights in the bar, games
room and front desk area (after check in time) and rely on candlelight. This is one of the
efforts to move towards being green, and makes for an interesting evening for our guests.
We do ensure there are numerous fire extinguishers on hand at all times.
Our staff does not wear uniforms, but since we sell shirts with ‘North Shore Youth
Hostel’ on them, we encourage staff to wear these (however it is not a requirement).
Dress is casual, but we do have nametags. Guests should be able to tell the difference
between the staff and other guests!
Positioning and Branding Decisions
At the North Shore Youth Hostel we strive to sustain an eco-friendly environment for our
clients. Although we are an eco-friendly company, our customers can still expect
accommodation at a reasonable price in comparison to surrounding hotels and hostels.
Compared to other accommodation companies with heavier promotion techniques, we
provide the majority of our promotion through the web instead of using paper products
such as brochures and magazines. With this, our hostel generates clients who would also
like to sustain an eco-friendly environment and with the same outlook. Besides being an
eco-friendly company, other aspects that may satisfy our target markets will be our
location, as we are away from the busy downtown Vancouver scene and convenient
distances from many outdoor attractions and trails. In addition, we provide more of a
social atmosphere to our clients rather than the upscale services they would receive in
some downtown Vancouver accommodations. This is an aspect that may attract people to
our hostel while we are still building our reputation, and are trying to gain recognition.
Product Feature Description and Decisions
The most unique feature the North Shore Youth Hostel offers is the location. Although
some customers prefer to be within the downtown Vancouver scene, our target markets
appreciate the uncommon location and feel they would benefit more staying at our hostel.
Our target markets would have access to various attractions that would best suite them,
which would provide a more fulfilling experience, if they choose our hostel. The
atmosphere of the North Shore Hostel would have a laid-back vibe. We intend to create
more of a social scene for our clients, making them feel at ease while also providing
easier interaction between each other and the locals.
Product Service Description and Decisions
Intangibility
Having an independent company creates some disadvantages such as price management.
Compared to larger companies, we are not able to earn sufficient funds for promotion. In
addition, pricing of our rooms is affected by the funds of our target market, and we need
to price smart in order to sustain our company. Also, when our clients are planning their
accommodation, unlike other large companies, our clients will not be able to see a visual
of the rooms they are booking until we have the means to provide this.
Inseparability/Simultaneity
In our company, our staff reflects the business we provide for our customers. It is
essential for our staff to be well experienced and have good work ethic in order to
enhance our customer’s overall experience at the North Shore Youth Hostel.
Perishability
The North Shore Hostel provides tourists with reasonable accommodation, pricing that is
lower than the upscale accommodation companies but not enough to attract clients that
are not our target market. A lot of our reservations are done online which helps the
majority of our clients that come from abroad. Our company mainly satisfies clients in
the summer and winter seasons as they come to participate in seasonal sports, activities or
events. Thus, during low seasons, which are Spring and Fall, our room prices are
available at discounted prices for more convenience, especially to students from the
island that come for a short period of time (especially around August-September and
January, the beginning of the semester). Other than the four company founders, the staff
at the North Shore Hostel mainly consist of students, which fits well with our
atmosphere, but also provides them with a part-time job that does not require a lot of
stressful work.
Variability/Heterogeneity
Variability is inevitable with our company. Since we focus on a community feeling and
we offer dormitory-styled rooms, the guests staying at our hostel affect the mood of
others. We embrace the community atmosphere rather than create a negative experience
for our customers. With our company, as stated earlier, it is essential for our staff to be
well trained and be knowledgeable about the area. Providing a well established staff will
help maintain our clientele and keep a relationship with not only them, but their friends
and family as well.
3 New P’s
Participants
 Hostel guests
 Restaurant patrons
 Staff
 Partners at Capilano University, Free and Easy travel, Hello BC
 Other advertising or tourist information centers
Physical Evidence
 Different modes of promotion
 Our Website
 Cleanliness and state of building and surrounding area
 Word of mouth
 Seeing a happy customer!
Process
 Promoting on Universities websites
 Word of mouth
 Smooth and easy check in process
 Online booking
 Once checked in, customers are independent, made aware of the amenities and
facilities Assistance in arranging and booking tours
Points of Contact
From the moment a customer calls to book a bed or walks in the door they are in contact
with the staff for the rest of their stay. We want our hostel to be memorable not only for
the facility but the friendly and helpful staff. Whether it’s in the front of house, the games
room or the bar, we are available throughout the building to help, chat, and make our
guests feel at home. Because we focus on a younger, very social crowd, socialization is
very important. We want to emphasize this through points of contact by having an
outgoing staff.
Product Life Cycle
Our product is in the later growth stage, as we have late adopters as consumers. We are
introducing a new product to a new market area, resulting in profits increasing with our
promotion and other costs being spread over more volume. Once the word is out about
our product, rapid climb in sales will ensue. We enter new distribution channels and shift
some advertising from building product awareness to creating product conviction and
purchase. We present lower prices at the right time to attract the next layer of pricesensitive buyers.
The tourism area where our product is located, lower Lonsdale in North Vancouver, is
mostly filled with food and beverage businesses. In terms of the accommodation product
life cycle, this area is in the growth phase. There are two other hotels in lower Lonsdale
(The Pinnacle and the Lonsdale Quay Hotel), but it is not yet a central location for
hospitality and accommodation, especially not for lower-end hotels and hostels.
Adoption Process
Currently, seasonal outdoorsy-type consumers are using our product. Especially in the
wintertime, as we provide an affordable accommodation in a convenient location, close to
the mountains and other forms of entertainment in the city of Vancouver. We also have
students attending post-secondary schools in the area are using our product as a
temporary base at the start of school terms (late August, January). Safety-conscious
consumers, which are usually more women than men, will be using our product due to is
safe and quiet location away from the city noise. People looking for a more luxurious,
high-class form of accommodation based on the quality of its services will not be using
our product. Older people and families with higher discretionary incomes will not be
using our product either as our main consumers are young, outgoing, and on a lower
income.
The Product from the Consumer’s Point of View
In the range of hostels, younger consumers are attracted to the product. Consumers such
as young students or travelers will likely use our product. As for our bar, we will attract
locals, varying in age, mostly middle-class people. The product will be structured in a
way that will mostly attract young people who enjoy socializing and a comfortable,
friendly environment. The basic needs for these target markets are comfort, convenience,
affordability, and simplicity. We want to create an environment people feel is as
comfortable as being at home. As we are marketing a hostel, it will not be a luxurious
environment, so our consumers must accept the basics.
Benefits from using our product are convenience of location, affordable prices, and the
safe and quiet environment. The location is a key benefit, as it is located near numerous
restaurants, varying from Greek, to Italian, to Japanese, and many more ethnicities. These
benefits are important to consumers when choosing an accommodation for their stay in
Vancouver. The unique factor of this product is its unique location. There are no direct
competitors (hostels) in lower Lonsdale, so the N.S.Y.H. will be the only of its kind in
that location for now. Most of our competitors are located in downtown Vancouver, and
for consumers looking for an outdoors experience of the Vancouver area; the N.S.Y.H. is
the perfect location.
Deliverables
Overall Product Strategy
With our product, we want to achieve a reputation about our sense of community within
the hostel. This community will be based on our target market, the people we want to
come to our hostel. These people are international backpackers, home stay students
looking for a temporary place, and local travelers. Our second most important strategy is
to focus on our location.
Our sense of community is the top quality of our hostel. It is what our target wants. We
will achieve the sense of community by having a games room with comfortable seating
so that people can mingle. Rooms will be shared so people will get to know each other.
Our bar provides our guests with the opportunity to grab a drink and tell the others a
story. This is our strength.
Our weakness is mainly not making enough of a profit to support ourselves, and making
our product so cheap that we start having undesirable guests. These guests may ruin the
effect of the community. We will have to ensure our prices are high enough to keep them
out. To do this, we can make our product worthwhile for our target market to pay a little
bit more. We will have bathing facilities and provide our guests with towels. There will
be a coin laundry room that we keep clean so they feel comfortable using it. We will do
everything we can to help our guests have a great experience in North Vancouver.
Our target market is staying in a hostel, and they want to stay for cheap. We need to
ensure that our hostel is predominant in their minds. That is the only way we will get our
target to purchase. We need them to think of us when they think about coming to
Vancouver in the winter to ski. We need to use the mountains as a channel to attract these
people. To attract guests in the summertime we can still use the mountains for hikers, but
we will have to promote being near the ocean. We can use marinas as a channel, and we
can promote in places along the beach that allow us to, such as TCBY.
Positioning and Branding Decisions
We want to be perceived as a place with a mid to high level of service and a low to
moderate price.
DISTRIBUTION STRATEGY AND ACTIONS
General Distribution Considerations
Our hostel is located on lower Lonsdale, an area that offers a variety of transportation
options for our clients to access us. For visitors from Vancouver Island we are only a half
hour bus ride on public transit from BC Ferries. The trek from the airport is longer, but
we can be reached from a shuttle service, public transit (which would be a combination of
sea bus and sky train) or taxies.
We do not have a partnership with any intermediaries to facilitate access, but we are able
to help our clients arrange transportation. Free and Easy travel works as a reselling
intermediary. They book a block of rooms in the winter and in the summer for their tour
groups to the area. Tourism BC acts as an agent, with a link to our website and other
valuable advertising opportunities through being an approved accommodation.
Title transfer occurs when the customer pays for the room.
Deliverables
Overall Distribution Strategy
The overall distribution and location match our product in the sense that we are a budget
option. Because we charge such a low rate per night it is not feasible to have added extras
like a shuttle service as of yet, we simply give our guests the information to get here.
Location
Our location is what our product is centered around; it is one of the key differences
between us and other budget accommodations in the area. We pride ourselves on our
convenience and close proximity to all of Vancouver’s wonderful attractions: the
mountains, downtown, Stanley park, great shopping, and tons of restaurant options.
Purchases are generally made in house at our front desk, but we also have online
reservations on our website and take phone bookings. Although location is one of our
main selling points, it can also be a barrier because tourists who do not know the area
might be put off by the idea of not being downtown before understanding the area.
Objectives for Each Intermediary Group
Our main intermediary that we reimburse would be the Free and Easy Tour Company,
because they have an exclusive partnership with us to use us as their accommodation
while in Vancouver. We give them a percentage of the sales from that tour group. They
also work for us by advertising our hostel on their brochures and website. In return we get
a chunk of rooms guaranteed to be sold, and free advertising while they get a discounted
rate and a small reimbursement, but most of all they get to offer their clients the exact
kind of accommodation they are looking for!
PRICING STRATEGY AND ACTIONS
Costs:
Startup costs: Our Company does not own the building our hostel is located in. The
building itself used to be a small hotel, which was sold to George Smith, the hostels
owner. The start-up cost for purchasing the building for would be $300,000. We have
remodeled the property to fit the look we want to portray to our target markets: a casual,
modern, vibrant-looking environment.
Acquisition of
equipment
Furniture &
fixtures
Electronics
Computer
systems
$200
$20,000
$5,000
$1,500
Hiring and training of initial employee base: The management and marketing team made
up of the founders will be involved, working as general employees as well as managers.
We have eight added general employees (duties include front desk, cleaning, wait staff
and cooking) who are paid $10 per hour including training, and two night guards (duties
include safety measures and front desk attendance) who are paid $19 an hour.
Launch Costs:
Advertising costs would be $700 a year. Some event expense would include a re-launch
party to promote our hostel where we would provide free appetizers for customers
(spending $200 of our budget).
Competitive Pricing:
Our main competitors are the C&N Backpacker Hostel, the Cambie Hostel and the
Grouse Inn. Because our North Shore Youth Hostel is the only available in the area, we
can afford to increase our prices in comparison to our competitors (most of which are
located in downtown Vancouver).
Operating Costs and Overheads:
Staff: Four managers/ marketing team: each on a salary of $40,000 a year
Security/night guard: $19 / hr
Additional employees: $10/ hr
Commission: 10% of sales back to Free and Easy
Restaurant Stock: $2000
Utilities: $1000 per month
Cost per Unit (dorm room):
 Cleaning fee: $10
 Laundry fee: $4
 Utilities: $3
 Total: $17, price per bed: $40
Channel Pricing
Free and Easy travel gets a 10% return on rooms booked though us.
Hello BC fee for being an approved accommodation with advertising fees is $250
Consumer-level Pricing
Our Hostel cannot directly charge different prices for different segment because we
advertise online where everyone, both domestic and international visitors, sees the price.
We have other ways to attract guests. We have created a promotional package where
anyone who purchases seven nights at our hostel will receive their eight night free. This
pricing does encourage guests to stay for longer than just one night. This ensures that we
are not going to lose our perishable product on nights with no guests. We also will give
any guest who books three nights or more with us a free drink at our bar. Another
package we will have is one where the guest can purchase breakfast for each day of their
stay while booking, and buy doing so they are paying 20% less for breakfast then they
would if they purchased breakfast once at the hostel. This allows us to have more
advanced purchases and know how much product we need in our pantry per day, and that
breakfast will definitely be purchased.
The North Shore Hostel does have quite a few more guests that want to stay during the
winter season, when the mountains are open for skiing and snowboarding. To deal with
seasonality, every year from November to April our hostel will cost $40 per night. From
May to October, our hostel will cost $35 per night. On Fridays and Saturday night there
will be an additional $3 per night due to a higher volume of demand. Charging three extra
dollars per night is more attractive to guests that if we charged them five or ten dollars
extra. Food served will always be around the same cost and will only depend on the
availability of what we are serving.
The consumer will perceive our pricing as very reasonable. They will pay slightly more
than if they stayed in downtown Vancouver, however when they look at how much
transportation to the North Vancouver would cost and the safety factor, they will find it is
worth it to pay the extra fees.
Our market is very price sensitive because they are budget travelers. They do not have a
great amount of discretionary income and if our prices are too high, they are going to go
elsewhere. We need to make sure to keep the funds of our market in mind at all times
when deciding our prices.
We do want to have loyal guests who come back to our hostel when they return for
another visit. The loyalty factor will be affected by our pricing only if we make drastic
changes or become too expensive for our target market, which we will work hard not to
do. The loyalty comes more from the guests’ experience at our hostel.
We are very reliant on international guests, and guests will come to our city in most
economic situations because they love the mountains. Even of exchange rates change for
the worse on the visitors’ part, they will still find that our hostel is close to the cheapest
place they can stay, and so it does not affect our pricing.
PROMOTION (MARKET COMMUNICATIONS) STRATEGY AND
ACTIONS
A. Digital Media
Online interaction with our clients is essential to generate any future business. Our hostel
provides individuals with access to our website, a Facebook page, and a Twitter account
for any crucial information or any current promotions. With these online and social media
sites, our company can present more appealing aspects of our hostel, the environment,
and the available opportunities. In addition, being that many of our clients will be from
out-of-town, these sites create better interaction between our staff and clients; we can
help provide answers to any questions that travel agents may not be able to answer
themselves. Online travel services are also essential to our clients since they help provide
a quick and easy reservation system.
B. Advertising
We will advertise our hostel in a few different channels. We want our advertising to be
very effective and make an impact on our target market. Our advertising budget is not
huge; it is $700 a year. $250 will be used to advertise our hostel on the HelloBC
(HelloBC) website as an approved hostel. We will also have brochures that we will spend
$200 on. The brochures will be located at admission and rental centers on Grouse,
Seymour, and Cypress Mountain, where our target markets are likely to visit. We will
also have brochures on BC Ferries and at Waterfront Station in the rack of brochures that
people see as they get on or off the Sea bus, and at Universities on Vancouver Island. We
will have our own .com website which will cost us only $5 a year using godaddy.com!
When we first open our hostel, we will have a launch party that will cost us $200 for food
and décor. This will make people aware of us. Every year after this we will spend the
money on other events or put it into further advertising. The North Shore News will be
writing an article on the first hostel in North Vancouver, and they are doing this with their
own funds, so it is free advertising, although we do not get to tell them what to say about
us, which is potentially dangerous. The rest of our budget will be spent on flyers that we
pass around to local businesses to make them aware of us and encourage them to send
customers our way.
C. PR and Publicity
Since our main target market will be adults in their early to mid-twenties and outdoor
enthusiasts, we will be promoting our hostel in outdoor magazines such as Explore
Magazine. We are also targeting students, so we will have posters and brochures
available at local Universities and Colleges, as well as post-secondary schools on
Vancouver Island for prospective Vancouver students. We will also be promoting our
product at any local ski/snowboard/outdoor events such as launch-parties and movie
premiere screenings. As our main target market is a younger audience, the media and
social networks will be our main focus of publicity: Facebook, Twitter and a personalized
website will be available for customers to learn more about our company. Our website
cost $5 per year due to a special promotion which we are very lucky to have found. The
costs for the posters and brochures spread around campuses will be $100.
D. Consumer and Trade
Our promotions aim to increase sales in the short term and bring in more people. Since
we have such a high turn over and are a budget accommodation, our promotions will
boost the number of transactions. Our offers are all price reducing, offering things like a
free nights stay after a week, free meals and free drinks.
CONCLUSION
In conclusion, we have come up with a product that has a high chance of success. There
are no other hostels in North Vancouver, and nothing as reasonably priced, giving us little
to worry about when it comes to competition. We also have the great advantage of being
so close to the mountains and the ocean, and being in a safer location.
At this point in time, our target markets require our existence; without hostels like us,
international travelers on a budget would be unable to visit, and our guests from the
island will be forced to pay great amounts of money for fancy hotels. Locals will not have
any place nearby that they can go out for a drink and meet people from different places in
the world.
Our main objective is to supply our guests with the sense of community at a reasonable
cost. We will do this by providing the right atmosphere and great value.
Our plans for the future include expanding our menu with the success of our restaurant
and bar, and opening up another location in North Vancouver. If there is demand, we may
even purchase our own vehicle to provide guests with transportation.
Our greatest risk will come from not spreading enough awareness of our product. We will
combat this by placing brochures in as many places as we can, as well as posting flyers
and holding events, such as a grand opening party. We also will make sure that our guests
are provided with such a great experience that they come back to our hostel if they make
a repeat trip. Once our location is one that comes to mind to all those who would visit a
hostel in Vancouver, then we will know that we are truly successful.
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