Strategic Marketing Project
Submitted on
Tuesday, 09 June 2009
By:
Tam Thanh Nguyen 174010
Tasanee Pinthong 179312
Sophie 177303
Ryan
Tao Yu 181303
(Eric) Bing Shan Li 174507
Submitted to:
Mr. Colin Seeley
MKT430 Strategic Marketing
In partial fulfillment of the requirements for the Degree of
Bachelor in International Business in Hotel and Tourism Management
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1.1
Summary of Roles, Contributions, and Duties
Tam – Project Manager
Mr Tam managed and summarized the project. He edited and combined member’s parts together
and make sure information is relevant to each other. He analyzed outline, point out importance
part and divide the job for each member in the group.
His written contribution consists of the Executive Summary, S.W.O.T analysis, Marketing
Position, Plan Analysis, and the research on Japanese, German, South Korean and Australian
market.
Tasanee – Assistant Project Manager
Ms Tasanee organized the presentation and has contributed difference research aspects for the
project. She also help Mr Tam managed the project in term of correcting and generally provides
useful information for the project.
She has used her creative to create attractive activities plan for hotel’s target market. She also has
been in charge marketing budget with Finance Manager, Eric. After all, all hotel’s activities and
plans will go through her Control & Evaluation Procedures.
Tao – Executive Research Manager
Mr Tao has been in charge of primary competitor, community and service analysis. His analysis
has importance role for property understand clearly the market and make improvement.
Nevertheless, Canada market on his research as well.
Sophie – Assistant Research Manager
Ms Sophie, as Assistant Research Manager she cooperates with Mr. Tao to identify clearly the
market. She has done well on Market Research, Market Segmentation and Selection of hotel’s
target market. Her contribution also consists of United Kingdom market.
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Eric – Finance Manager
Mr. Eric was in charge research the reason why and how Mandarin Oriental Auckland is
selected, the outline of company and why team chooses New Zealand as target market. As
finance manager so he has importance responsibility to double check again finance report and
marketing budget.
Ryan – IT and Engineering Supervisor
He was responsible for Chinese market and also deep research on environmental analysis, market
potential analysis. His experience about New Zealand has contributed lot of useful information
for the project.
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1.2 Executive Summary
Mandarin Oriental Auckland is 42th hotel of one of famous hotel brand in the world, Mandarin
Oriental Group. The main organization has excellent reputation all over the world (The world’s
best hotel in 2008/2009), and strong concept about quality service which is not easy to substitute
by other competitors.
New Zealand is rank as the most peaceful country in the world with many famous attractions all
over the country. Auckland is one of the biggest of North Island and hosts the largest and busiest
international airport in New Zealand with over 15 million passengers per year.
The project starts with an outline of Mandarin Oriental Auckland and other perspectives,
justification on why choose Mandarin Oriental as the brand name of new property. The
following will analyze detail the market, environmental, societal, political, competitors and other
perspectives, trends in New Zealand. This deep research is a must in order to set clearly
strategies and objectives to reach specific target market.
The following will focus on market research, segmentation and selection of target market. Detail
on why certain market was selected. Further more detail about implementation plan for Mandarin
Oriental Auckland was also provided. Activities plan, brief discussion what activities are
necessary to attract the customer
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2.1 Why New Zealand?
New Zealand is an island country located in the south-western Pacific Ocean comprising two
main landmasses (commonly called the North Island and the South Island), and numerous
smaller islands. New Zealand is a Multi-cultural country; the population consists of people
immigrate from UK, USA, China, German (Immigration Statistics, 2007), and other regions.
Therefore it could be an advantage for Mandarin Oriental, because it enlarges the company’s
target market. Moreover, New Zealand is a famous tourism destination, the guests from different
countries spent 10,491,208 nights in 2008, and the tourists will have a 3.3% of increase till 2014
(Key Tourism Statistics, May 2009).
Moreover, New Zealand is considered to be the most peaceful country in the world (Global
Peace Index, 2009), it has the high level of political stability and low level of violent crime rate,
which gives Mandarin Oriental business guarantee to be safety, the company could have a
sustainable development. Furthermore, The Travel &Tourism Industry is expected to contribute
directly 5.9% to Gross Domestic Product (GDP) in 2009 (NZD10.9 billion or US$6.2 billion),
rising in nominal terms to NZD17.8 billion or US$10.7 billion (6.0% of total) by 2019 (travel &
tourism economic research, 2009). Last but not least The Ministry of Tourism's International
Visitor Survey shows international visitor spends increased by almost five percent in the year to
June 2008, up to $6.2 billion.
In addition, from all the aspects have been considered, the management team has sufficient
reason choose New Zealand as investment destination.
2.2 Chosen property: Mandarin Oriental Auckland
The company Mandarin Oriental is an international hotel investment and management group
with deluxe and first class hotels, resorts and residences in sought-after destinations around the
world. The Mandarin Oriental Hotel Group (MOHG) is a hotel management company which is
part of Jardine Matheson Holdings Limited and is formally known as Mandarin Oriental
International Limited. Mandarin Oriental is best defined as a family of individual hotels and
resorts, each with their own distinct personality yet inherently linked to their exotic oriental roots.
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The luxury brand aims to delight guests by providing service that is gracious and sincere and
steeped in the values of the orient.
Moreover, the company acclaimed collection of luxury hotels awaits customers. Perfectly
located in the world’s most prestigious destinations, Mandarin Oriental welcomes everyone with
legendary service and exquisite facilities, steeped in the values of the orient. Besides The Group
regularly receives international recognition and awards for quality management and legendary
service hospitality.
Furthermore, there is no Mandarin Oriental in New Zealand, our aim is to buy a Four-Star hotel
Sebel and re-brand hotel into Mandarin Oriental Auckland because the group’s aim is to be
recognized widely as the best global luxury hotel group, providing 21st century luxury with
oriental charm in each of its hotels. This will be achieved by investing in the Group’s exceptional
facilities and its people, while maximizing profitability and long-term shareholder value. The
strategy of the Group is to open the hotels currently under development, while continuing to seek
further selective opportunities for expansion around the world.
2.3 Mandarin Oriental Auckland Company Outline
The first hotel of the Group, The Mandarin, opened in Hong Kong in September, 1963. The
group began its expansion in Asia in 1974 as the "Mandarin International Hotels Limited" and
acquired a 49% interest in "The Oriental" Hotel in Bangkok. The trademark 11-bladed gold fan
logo was created in 1987. The Group now operates, or has under development, 41 hotels
representing over 10,000 rooms in 25 countries, with 17 hotels in Asia, 14 in The Americas and
10 in Europe and North Africa. In addition, the Group operates, or has under development, 13
Residences at Mandarin Oriental, connected to the Group’s properties. The Group has equity
interests in many of its properties and net assets of approximately USD 2.0 billion as at 31st
December 2008.
The hotel that management team chose to purchase in New Zealand named Sebel, Which is
located at the Viaduct Harbour. Adjacent to Ackland's CBD, nested in the American's Cup
Village with the Casino, Museum, Art Galleries, shops and tourist attractions, all within walking
sidtance, and it takes only 24 kms from Auckland International and Domestic airport, also 500m
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to the train station. The Sebel Auckland combines suite-style accommodation with personalized
hotel services, 135 Spacious Studios, Marina Suites and Executive One Bedroom Suites.
Auckland's central business district and the city's finest shopping, restaurants, cafes and
recreation activities are all within easy walking distance of the hotel. Guests will appreciate the
freedom of the spacious studios and suites, the individual balconies with marina or city views
and Sebel Auckland's convenient location. (Mirvac, N.D.) This elegant property offers spacious
meeting rooms, perfect for hosting business meetings and conferences. The historic Tepid Baths
opposite to the Sebel Suites provides guests with a modern swimming pool, spa, sauna, steam
room and fully equipped gymnasium. Aerobics, aqua aerobics classes and massage room are also
available. (Asian Hotels, N.D.)
3.0 Industry Research
http://www.asianz.org.nz/
http://www.apexrentals.co.nz/
http://www.nzherald.co.nz/
http://www.newzealand.com/
http://www.tourism.govt.nz/
https://www.cia.gov/library/publications/the-world-factbook/geos/nz.html#Intro
http://www.nationmaster.com/graph/imm_asy_see-immigration-asylum-seekers
http://www.visionofhumanity.org/gpi/results/new-zealand/2009/
http://www.investmentnz.govt.nz/section/14233.aspx
http://www.holidaycity.com/sebel-suites-auckland/map.html
http://www.newzealand.travelmall.com/content/hotel_info/The_Sebel_Suites_Auckland55115.html
http://www.nz-holiday.co.nz/sebelsuites/
http://www.asiahotels.com/hotelinfo/Sebel_Suites_Auckland_The/
http://www.asianz.org.nz/our-work/action-asia-business/action-asia-insights/highyenhttp://www.trcnz.govt.nz/News--Media/News-Archive/2008/Tourist-SpendingSlows/http://www.nz.emb-japan.go.jp/culture_education/foundation-report.htm
http://www.mandarinoriental.com/about_mo/media/press_releases/property/business_plus.aspx
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http://www.stats.govt.nz/products-and-services/hot-off-the-press/labour-cost-index-all-labourcosts/all-labour-costs-jun08-hotp.htm
http://www.mandarinoriental.com/geneva/images/mogva_ebook.pdf
http://www.fh-htwchur.ch/uploads/media/Studie_Reiseverhalten_Japan.pdf
http://www.estheva.com/ourspa.htm
http://www.tra.australia.com/content/documents/Consultancy%20series/Changing%20Consumer
%20Behaviour%20Impact%20on%20the%20Domestic%20Tourism%20Market%20(final).pdf
http://www.tourismresearch.govt.nz/Data--Analysis/International-tourism/International-VisitorArrivals/IVA-Pivot-Tables/
http://www.taanz.org.nz/about-taanz
http://www.achinatravel.co.nz/index.php
http://www.visionofhumanity.org/gpi/results/rankings.php
http://www.specialolympics.org.nz/documents/2009NSGMediaReleaseFINAL20071129.pdf
http://www.nz-holiday.co.nz/sebelsuites/
http://www.outdoorland.info/Auckland/63723.htm
http://www.tourismnewzealand.com/tourism_info/market-research/market-guides/unitedkingdom/visitor-arrivals-&-behaviour-uk.cfm
http://www.tourismnewzealand.com/tourism_info/market-research/market-guides/unitedkingdom/market-snapshot-uk.cfm
http://www.immigration.govt.nz/migrant/stream/visit/visitors/LinkAdministration/To
olboxLinks/visafreecountries.htm?level=1
http://www.nztourismstrategy.com/files/NZTS2015%20final.pdf
http://www.trcnz.govt.nz/Data--Analysis/International-tourism/International-Visitors/IVS-PivotTables/
http://www.zhuzheli.com/English/news/View_38978.html
http://www.abujaenterprise.com/uplds/15_unmark/Marketing%20plans.pdf
http://www.newzealand.com/travel/trade/marketing-toolbox/market-snapshots/marketsnapshots.cfm
http://www.aucklandnz.com/index.php/landing_A/?L1=66
http://www.aucklandnz.com/index.php/events_listing/?L1=38&L2=39
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http://www.stats.govt.nz/NR/rdonlyres/8892F0FF-A2D9-4450-A46A8903BB74DE37/0/Mar08_AucklandCity.pdf
http://www.stats.govt.nz/products-and-services/table-builder/intercensal-populationestimates.htm
http://www.booking.com/hotel/nz/hiltonauckland.html?sid=53d022ad7f44d3be580806e70d310cac;checkin=2009-06-25;checkout=200906-30
http://www.hilton.co.nz/
http://www.mirvachotels.com/quay-west-suites-auckland
http://www.tripadvisor.com/Hotel_Review-g255106-d255649-Reviews-Hilton_AucklandAuckland_North_Island.html
http://www.tripadvisor.com/Hotel_Review-g255106-d256715-ReviewsQuay_West_Suites_Auckland-Auckland_North_Island.html
https://www.cia.gov/library/publications/the-world-factbook/geos/nz.html#Intro
http://www.nationmaster.com/graph/imm_asy_see-immigration-asylum-seekers
http://www.visionofhumanity.org/gpi/results/new-zealand/2009/
http://www.investmentnz.govt.nz/section/14233.aspx
http://www.holidaycity.com/sebel-suites-auckland/map.html
http://www.newzealand.travelmall.com/content/hotel_info/The_Sebel_Suites_Auckland55115.html
http://www.nz-holiday.co.nz/sebelsuites/
http://www.asiahotels.com/hotelinfo/Sebel_Suites_Auckland_The/
http://www.newzealand.com/travel/trade/marketing-toolbox/market-snapshots/marketsnapshots.cfm
http://www.tourismresearch.govt.nz/Documents/Tourism%20Sector%20Profiles/HotelSectorMa
y07.pdf
http://www.newzealandrugbyinfo.co.nz/
http://www.tourismresearch.govt.nz/Documents/Tourism%20Sector%20Profiles/TotalAccommo
dationSectorMay07.pdf
http://www.tourismresearch.govt.nz/Documents/Forecasts%20Summary/Forecasts%2020082014/SummaryForecastTables2008-2014.pdf
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4.0 Marketing Plan
4.1 Market Analysis
4.1.1 Environmental Analysis
This part is focusing on analysis of external marketing environment factors, which cannot be
controlled or influenced by organizations. Those factors have huge impacts on establishment of
organizations’ short-term and long-term goals. They determine organizations’ future direction
and the way to pass. A successful business must constantly plan and update its environment
analysis in order to make sure its business on the right direction. The business will not survive if
failure to understand its surroundings. It likes fish is born in the water but does not know about
water until die in order to understand detail the environmental surrounding there are four
questions need to be answered. (Appendix A)
4.1.2 Market Potential Analysis
For Mandarin Oriental, Auckland is a new destination for its business development. This is
might be a challenge and an opportunity for this luxury hotel with strong theme of Chinese style.
Its potential markets are mainly based on New Zealand’s tourism export, hotel location and
business activities in Auckland. The following is a list of the seven key research questions about
potential customers of Mandarin Oriental in Auckland.
For more detail market potential analysis, please see Appendix B
4.1.3 Primary Competitor Analysis
Mandarin Oriental Auckland has two major competitors both located at North Sea side of
Auckland city that have view of the Harbor. They are: Hilton Auckland and Quay West Suites
Auckland. Above two hotels are all luxury standards with approximately same capacity. In
addition, they are both chain hotels that would have similar type of marketing resources as
Mandarin Oriental hotels.
Hilton Auckland has the best design of building with close view on Auckland’s harbor. Based on
its famous brand, most European and American guest will have better perception than other
hotels. Sophisticated global loyalty program can also guarantee guest sources. It has the
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management contract with apartments of two building next to the hotel giving flexibility to
manage capacity. However, they were accused with poor condition and few services. Equipped
with all facilities such as Spa and outdoor swimming pool, Hilton Auckland can also create more
accretions. Nevertheless, few complaints had post on trip advisor there is a lack of stuffing in
restaurant.
Quay west suites Auckland is a unique CBD hotel under MIRVAC group which also has other
business in financial and retail area. One hand, inner connection can bring business. On the other
hand, reflected on its website that the hotel is lack of hotel marketing stuff as there is no loyalty
program and system assist browsing hotels. The advantage of this hotel is mostly reflecting on
design of rooms and facilities. Additionally, it also has better convenience on accessing
attractions in Auckland.
For complete primary competitor analysis, please see Appendix C.
4.1.4 Location and Community Analysis
Auckland is located on middle of the north island. The Auckland city has a population of
443,200. As the capital of New Zealand it has a fairly high ratio of resident arrival and departs.
According to local government’s report, there will be 20% change of total permanent residents.
Approximately 20% of emplacement in Auckland city was taken by service industry. In terms of
tourists’ accessibility, Auckland has an airport that operates more than 20 Airline Company.
Furthermore, it is also possible reaching Auckland by cruise lines. It has more than 10 attractions
within the city that can schedule 3 days of package tour within the city. To put more incentives
in Auckland, public sectors in Auckland has organized tight calendar of events in different
region. The events cover sports, art and culture well-distributed in different areas.
For further information please see Appendix D
4.1.5 Services Analysis
The Mandarin Oriental Auckland would follow general service culture as other hotels in the
world with adoption to local demand. The concept is to closely identify both international and
inbound guests demand with friendly and elegantly delivering our services. As Auckland is
holding events for all types and easy access to great natural tourism destinations, apart from
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classical luxury hotels operating model in big international city, our hotel will also innovate
distribution and promotion tactics in order to maximize our client sources.
Mandarin Oriental Auckland has 135 rooms’ categories into the following:
ROOM TYPE
No of Rooms
Bedding
Premier room
35
Queen
Harbor room
30
King twin
Deluxe suite
25
King twin
Oriental Suite
20
King
Mandarin suite
15
King
Howarth Suite
8
King
Auckland suite
2
King
Aim to be the best hotel in Auckland; our hotel would have following facilities: 24 hour
reception that can operate maximum eight check-ins at same time; rooms for disable guests;
luxury shops; business centre; spa with warm swimming pool and gym; conference rooms that
can accommodate 200 people at same time; in house Thailand restaurants with banquet hall;
luxury lounge; musical bar performs blue music every night. In rooms, liquid crystal TV set
would be equipped; free high speed internet. Other special request on linen and amenities can be
reasonably request.
To incrementally enhance the quality of experience for the guests, our hotel providing luxury
services. There will be a catalog of room service available which include following: in room
massage; coiffure services; mini bar; meals with different menu at different time. Concierge
services will also include. Our employee would pleasantly give advice of activities that our
guests may interest in upon request. Spa facilities have professionals that are able to answer all
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related questions and providing contributive advice on design therapies or exercise plan. Hotel
will also develop partnership with local golf courses and tennis clubs enable to meet guests
demand. There will be no worry on transportation since we will have 24/7 pickup and send of
services.
4.1.6 Marketing Position and Plan Analysis
According Kotler and Keller (2006) describe “Positioning is the act of designing the company’s
offering and image to occupy a distinctive place in the mind of target market.” So create a
perception in the customer’s mind, get the customers to associate different things/feelings with a
specific brand is importance. Mandarin Oriental Auckland considers as luxurious property which
targets difference type of group customers by extraordinary service and luxury facilities. The
property offers additional services such as offer in room massage service and beauty salon, rental
car service also provided especially for Europe and Japan market.
Porter (1998) believes a firm possesses a competitive advantage when its value-creating
processes and position have not been able to be duplicated or imitated by other firms. So to be
able to compete in an industry it is vital for every firm to have a competitive strategy by taking
offensive and defensive actions to create a defendable position (Hall, 1980). One question arise
is “How can Mandarin Oriental defend its competitive position to compete others in the longrun?” In the future health care and sustainable tourism will be new trend in New Zealand (New
Zealand tourism strategy 2015); respond to that trend Mandarin Oriental Auckland will operate
Spa facility. Spa facility will operate by ESTHEVA spa, that is luxury and famous brand name
spa in Singapore. The reason property chose ESTHEVA because their service concept is brilliant;
they understand well Asian and European market, it gives advantage to attract difference kind of
guest.
Kurtz (2008) indicated that core competencies make a firm stand out from everyone else in the
marketplace. And Rupert, E. W. (2005) believes that core competencies need to have three
functions:
 Provide potential access to a wide variety of markets.
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 Make a significant contribution to the perceived customer benefits of the end product or
service.
 Be difficult for competitors to replicate.
Mandarin Oriental Auckland core competency is concentrating in the quality of service. Hotel
targets wide variety of market so to satisfy all guests, staffs need well-training and have high
motivation. Hotel will provide Employee Award program to motivate employee and training
campaign will operate continuously in order improve the quality of service. In hospitality
industry the competitive is very high; competitors will copy each other strategy to help them
dominate the market. However service is unique and no one can copy them and Mandarin
Oriental Auckland believes that maintains and improves service as core competency will create
good competitive advantage in the market.
Moreover the special Olympic event held in Manawatu which near Auckland region on 2th – 5th
December 2009 and Rugby World Cup in 2011; it will give big boost for incoming tourists to
visit New Zealand. Due to the fact Auckland will hold several importance games in Rugby
World Cup 2011 (quarter final and final match) so the expectation of high number of reservation
for this time period is absolute. Hotel will focus in marketing campaign to improve popularity as
much as possible and make sure everything is ready for that big event. Nevertheless hotel will
cooperate with local tourism agency, local hotels, other hotels in Mandarin Oriental’s group,
difference alternative distribution channels (Expedia, Priceline, hotwire) to attracts customer and
promote new property.
Last but not least, the property will clearly target individual market segmentations, the detail
information will be discussed in the section below.
4.1.7 S.W.O.T analysis
Mandarin Oriental group has excellent reputation all over the world (The world’s best hotel in
2008/2009), it gives huge advantage to establish new property in New Zealand. The reputation
gives customer good impression about hotels’ images however customer’s expectation will be
very high as well. Good location can be great advantage, the hotel located near pier and city
center (5 minutes walk) so it will easy to attract both target markets: business and leisure
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customer. Nevertheless new program “Business Plus” wide offer and give the most benefit to
business travelers with exceptional value. Mandarin Oriental Auckland will apply sustainable
system like Mandarin Oriental Miami. However there is big competition market within the
location, Sky city hotel has casino so they can target wider target market, it will gives them more
advantage than the other hotel surrounding.
For detail information about S.W.O.T analysis, please see Appendix E
4.2 Market Research
Before targeting any types of market, it is compulsory to look at the overall of the types of
people coming to New Zealand, followed by the hotel market. From the data of April 2009 for
international visitor arrivals, the main market of international visitors for New Zealand are from
Australia, UK, US, Canada, China and Japan (Tourism New Zealand Market Research, 2009).
• Australia - 90,508, up 22.8%
• UK - 17,930, up 1.0%
• US - 14,388, up 1.4%
• Canada - 3,212, up 6.2%
• China - 10,670, down 6.0%
• Japan - 6,072, down 15.7%
Source: Tourism New Zealand Media Release (Ministry of tourism Forecast Tables, 2008)
Moreover, there’s a prediction that general growth in overall tourism arrivals of 3.3 % annually
until 2014 (Ministry of tourism Forecast Tables, 2008). The importance of the hotel sector is
showed by the fact that 31.5% of all visitors staying over in New Zealand stays in a hotel. We
especially chose Auckland as our location because Auckland is the city that attracts the highest
number of accommodation guest nights (Ministry of tourism, 2009).
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Source: Total Accommodation Sector (Ministry of tourism, 2009)
The tendency is that mostly international travelers stay in a hotel. In recent years, 55% staying in
hotels were international visitors. Moreover, 66% of international travelers staying in a hotel are
on holiday. Another paradox is that people staying in a hotel are more likely to spend more than
people staying in another type of accommodation. Their average spending is around 220$ per
night all expenses included which is 65$ more than the second biggest expenditure from motel
guests with 155$. Auckland has also the second highest occupancy rate (63%), compared to the
other areas (Ministry of tourism, 2009). This statistics and numbers clearly show that there is a
big potential for our hotel to target international visitors because the hotel sector is very
important in New Zealand.
Another aspect to point out is that Auckland attracts business people due to its important
business base. Moreover, In New Zealand, 24% of international guests staying in hotels are
“business travelers” which is the second largest group after holiday’s purpose. For domestic
guests, 52% staying in hotels are for business purposes. These numbers show that business
travelers are a primordial target market for our hotel (Tourism New Zealand Market Research,
2009). The age profile of international hotel guests are mainly from 25 to 54. This age category
represents 66% of the guests. Domestic travelers are mainly aged from 35 to 54 and represents
51% of total domestic guests staying in hotels (Tourism New Zealand Market Research, 2009).
After looking at a general overview of the target segmentation in New Zealand and with the
results of the market analysis, our segmentation of target markets can be divided as followed:
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4.3 Market Segmentation and Selection of Target Market
After examination of the area, the market analysis and market research, we came to the choice of
our selection of target market. We chose to have a mixed market. Our target would be
international travelers and domestic travelers. Their main travel purpose would be either for
holidays or business purposes.
For business purposes, we will target both domestic and international visitors. For holiday’s
purpose, we will target middle/up class, aged 25 to 54, essentially people travelling in couple,
friends or families, staying from 1 to 14 days in New Zealand. Our reason for choosing this
market is that our hotel offers the luxury and the exclusivity of a high class hotel and is perfectly
suitable for the purpose of a vacation as well. We target middle class and up, because our price
will be moderate to high rates regarding to what we offer and the comfort people can find in our
hotel. The location is an element we take in consideration as well when targeting people. We will
also take into consideration that most international travelers and especially American visitors are
very sensitive about value for money. In order to attract them, we will, then, include facilities
and services in the prices.
However, we will also focus on targeting people coming to visit New Zealand on a tour holidays
and staying in New Zealand for 1 or 2 nights and we will offer special packages to attract couple
and families, which means they will be more likely to stay in our hotel. We will also try to have
partnerships with sports teams coming in New Zealand when special events take place,
especially such as the Rugby World Cup that will be held in 2011 in New Zealand.
More information about different main target markets will be analyzed below.
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4.4 Market Strategy, Positioning, Mix and Objectives
VISITOR ARRIVALS BY TOP SEVEN INTERNATIONAL MARKETS
According to the chart above, the top seven international visitor arrivals will slightly increasing
in the future. Australia dominate the number of arrival, following is UK, US, Japan, China,
South Korea and Germany. Identify the market and set clearly market strategy and objectives
which suitable for each market is critical.
For more information about Market Strategy for each specific market, please refer Appendix F
5.0 Implementation Plan
5.1 Activities Plan
Marketing activity plan should base on the realistic budget and target market research
information. The marketing activity plan has not only reach target market activity, but also
including major events such as exhibitions and trade shows during the year, when each activity
will start, and who are taking the responsibility.
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The activities are planned by the Global Marketing Solutions Company, in charge of the general
manager and assistant manager. They are started when the new operation begin. The first activity
should be taken is creating the hotel website to attract target market including promoting the
hotel facilities and package for specific markets. Then, the hotel should connect to other websites
to advertise the hotel such as kayak, priceline.com, hotwire.com, tripadvisor.com. In addition,
events in Auckland are promoted during the year, such as AC/DC Black Ice World Tour.
Moreover, the specific activities should be concerned for each target market. For example, tour
trips should be organized for Australian market due to their long length of stay and also
promoting Australian foods, jointing the campaign “what do you say UK” to take people to the
hotel, according to word of mouth is the best motivating British to come to New Zealand etc.
More detail about the
Mandarin Oriental Auckland timetable and activities schedule can see in Appendix G
5.2 Marketing Budget
The budgeting method the management team chose to adopt is Competitive-Parity under
Unsophisticated Approaches which means the management team set the rack rate by compare
with company’s competitors. The financial department of Mandarin Oriental firstly differentiates
the rack rate for different types of room. The room price started at $250 and the most expensive
room is the Auckland suite, and there are only two of them at the price of $650.
After setting the Rack Rate, according to the deep researches, management team recognized that
the tourism peak season in New Zealand starts in December and ends in April, therefore, the
company estimated that the occupancy rate would be the most at the end of the year, and the
revenue reaches the top. (Appendix H)
5.3 Control & Evaluation Procedures
The new organization need to be ensured it will stay on the right track, which is operated within
the budget year and go forward to the operating target, the hotel should create internal control.
The internal control is provided to increase the efficiency and effectiveness in the operation,
maximize utilize limited resources, and realize the hotel objectives. To launch the successful
internal control system, the rules and regulations are reasonable and acceptable set. The works
and duties are clarified allocated to reduce the conflict between departments. Moreover, the hotel
supports the education and training of staff.
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In addition, the hotel also put attention on the maximize revenue strategy and control the costs.
The marketing cost should be enough to promote the hotel, especially initial staring period as
well as check the efficiency of marketing channels, do not waste money with useless advertisings.
Lastly, evaluation is always needed to make sure the hotel is going to reach the goal. It should be
done timely to recognize the existed problem, the ways to solve the problems, and know the
competitors. The hotel can correct the information by doing the survey or questionnaires for
guests and employees to measure the satisfaction, the problems, and recommendation.
20
Appendices
21
Appendix A – Market Environmental Analysis
+ What are competitive and industry trends?
Due to the deepest financial recession since World War II, 1.3 percent contraction in world’s
economy in 2009 has impacts on world tourism industry as well as hotel industry (NZ Hotel
Industry Conference, 2009).
In New Zealand, Hotel sector hosted 31.5 percent of mainstream commercial accommodation
guest nights. In 2006, there were 570 hotels, decreased by 2.6 percent compared to 2001 with
585 (Hotel sector, 2007). There are 32.08 million guest nights for the year ended March 2009,
which decreased by 3.8 percent of guest nights on the previous year. In March 2009, total
number of guest nights is made up by 51.8 percent of domestic guests and 48.2 percent of
international guests. They all declined by 10.2 percent and 11.2 percent respectively. All types of
accommodation in New Zealand have dropped down in terms of room occupancy. Hotel is
ranked fifth decrease within all types of accommodation, down 2.5 percent from previous 66.3
percent (Ministry of tourism: CAM, 2008). However current hotel’s room occupancy is still
higher than 2006 with average occupancy rate 55.1 percent.
According to specialists in accommodation consulting, more Australian and international
operators would move into New Zealand (Hutching, 2003). Currently, international operators
still believe that New Zealand is a growing market in terms of tourism, because of:
 One of the most desirable destinations in the world
 Prime Minister = Tourism Minister
 Unique tourism product and services
 Asia is one of growing markets for New Zealand tourism
 100% pure environment and sustainable tourism positioning
 Rugby World Cup 2011
 Safe
22
Tourism is New Zealand’s number one export earner. It contributes $20.1 billion annually to the
economy. According to New Zealand Tourism Data (2008), there are 2.47 million international
arrivals in 2007, expected to be 3.1 million by 2014. Domestic trips are forecast to increase from
49.5 million in 2007 to 52.7 million (New Zealand Tourism Forecast, 2008-2014).
+ What are economic trends?
New Zealand is a market economy, mainly has trade with Australia, the European Union, the
United States, China and Japan. Its major industries are tourism and agriculture. New Zealand is
one of the most business-friendly countries in the world. New Zealand emerged from World War
II with GDP growth at average annual rate of 4 percent. In 2009, GDP dropped down to minus 2
percent due to world’s economic crisis. New Zealand’s economy is expected to start recovery by
2010 to reach 4 percent of GDP growth rate by 2013 (The economy of New Zealand, 2009).
Auckland is the largest city in New Zealand, has the biggest port and largest population. It plays
a major role in economic sector of New Zealand. Auckland has the highest levels of productivity
performance based on almost all measures of earnings. In particular, Auckland has significantly
higher average levels of labor income, and wage rates than the other areas. Auckland has also
experienced stronger growth in wages, in particular for wage/salary workers, than other regions.
Growth rate of GDP per employee within hospitality industry is 20 percent that higher than rest
of New Zealand (Auckland’s Economy, 2008).
+ What are political and legislative trends?
Tourism of New Zealand generates over 14 billion each year. The tourism industry employs 1 in
10 New Zealanders in a diverse range of businesses, and is the largest export industry. Thus New
Zealand is willing to establish favorable policies or legislations to help the national tourism
industry. For example:
 To maintain the existing transport network to set standards and to provide the mechanism to
enable New Zealand’s transport infrastructure to grow to meet the demands of tourism
growth (Land transport policy, 2004).
23
 To enable New Zealanders and visitors to New Zealand to have reasonable access to the
transport mode of their choice, providing that the appropriate pricing and funding
mechanisms are in place to establish, and sustain such transport modes (Land transport
policy, 2004).
 Tourists from Australia, UK, USA, Hong Kong and Japan except China travel to New
Zealand for three month or less, they will not need a visa. In addition, British Citizens are
able to stay up to six months without visa. Australians are all free to enter to New Zealand.
Those countries are all major outbound markets to New Zealand tourism (visa-free countries,
2009).
+ What are societal and cultural trends?
With society developing, people’s lifestyle and perception are constantly changing. Recently
years, growing number of female travelers is one of trends within tourism industry. Female
traveler is becoming a separate segment. The majority of them come from Japan, Australia, New
Zealand, China and Singapore.
“According to the Hong Kong tourist Association, the number of women travelers in the territory
increased from 2.1 million to 4.7 million between 1987 - 1996. Similarly, the Tokyo Office of
the Pacific Asia Travel Association reports that, in the past ten years, the number of outbound
Japanese business women increased by 380% compared to 300% for all outbound Japanese
travelers. Meeting the needs of female travelers requires particular attention to hotel safety and
security features, comfort, opportunities for social interaction, value for money and no surprises”
(Hing et al., 1998: 269).
Other trends are increased pleasure travelers due to increased two-income families, more
convenient and less expensive transportation, and business traveler stay shorter or less because of
financial downturn result in companies concern about cost of business operation.
24
Appendix B – Market Potential Analysis
WHO? Who are the customers?
Due to the nature of Auckland and
the location of Mandarin Oriental,
domestic business travelers, and
international business and holiday
travelers from Australia, UK,
USA, China, Japan and Germany
are major target markets. In
particular China is the fastest
growing outbound market. People
from those markets have high
level of disposable income.
What? What needs are they
In general, Western and Eastern
trying to satisfy?
customers have different
perception and expectation on
hotel facilities, location and
services. Asian customers
generally have higher level of
expectation on physical condition,
for example, they expect a large
lobby and deluxe decoration
either within hotel or room.
Western people have a higher
expectation on service quality and
location, such as smile all the time
by hotel staff and sea view where
hotel located. Mandarin Oriental
in Auckland is equipped with all
of conditions to meet expectations
25
of customers worldwide
Where? Where do the customers
Mandarin’s potential customers
live and work?
are from all over the world. They
are
mainly
from
those
six
countries as mentioned above and
other regions of New Zealand for
business
purpose.
Australia
travelers
mostly
come
Brisbane,
Melbourne,
from
Sydney,
Adelaide, Canberra and Perth.
The main origin cities in the U.K
are
London,
South
England,
Scotland and Wales. American
market
mainly
California,
Washington,
consists
of
New
York,
Florida,
Texas,
Colorado and Illinois (Tourism
New Zealand, 2008). About half
of the Chinese tourists come from
Beijing, Shanghai and Guangzhou
(Tourism indicator, 2008).
When? When do they buy?
The period of high demand in
hotel sector is from October to
April and lower demand from
May to September (Hotel sector,
2007)
How? How do they buy
Thanks for current technology!
26
All potential customers are easily
able to make reservations through
online website, travel agency and
direct phone booking etc.
How Many? How many
In 2006, Auckland hosted 2.81
customers are there?
million of hotel guest nights.
International guests accounts for
55 percent, other 45 percent
comes from New Zealand.
Australians are the largest group
representing 34.6 percent in 2005,
followed by visitor from UK
(11.2%), US (11.1%) and Japan
(10.1%). 60 percent of
international visitors staying in
hotels for holiday, 24 percent for
business, followed by 11 percent
for visiting friends and relatives.
Inversely Domestic visitor staying
in hotels accounts for 52 percent,
only 33 percent for holiday, 9
percent for VFR (Hotel sector,
2007).
How Do? How do they feel about
The most of international and
our organization and about
domestic visitors are highly
primary competitors?
satisfied with their hotel
experience in New Zealand.
International visitors are more
satisfied than domestic visitors.
27
They give 8 out of 10 for their
satisfaction rating, whereas
domestic visitors give 7.7 (Hotel
sector, 2007)
28
Appendix C – Primary Competitors Analysis
Hilton
Auckland
Strengths

Famous global hotel chain brand

Has loyalty program

Spectacular building style

Great view of Auckland’s harbor

Large capacity

Complete facilities, include Spa and Gym

GM constantly replay complaints
Weaknesses
Opportunities
Threats

Sometime cruise ship block the view

Lack of stuff in the restaurant

Poor management in front office

Parking price is fairly high

Benefit from international image and loyalty program

Have close relationship with cruise services increasing business

Also has potential extend the apartment business next to the hotel

Facilities in rooms tends to need renew

Great view of both harbor and city scope

Boutique conference rooms

Convenient transportation to all attractions

Complete facilities, include Spa and Gym
Quay West
Suites
Auckland
Strengths
29
Weaknesses
Opportunities

No loyalty program

No response to complaints on the web

Bad internet connection

Lots of complaints on TV set performance

Ranked high position among Auckland’s hotels review in online
agency
Threats

The owner also have other business providing new guests sources

Limited room capacity, may be insufficient for groups
30
Appendix D – Location and Community Analysis
LOCATION AND COMMUNITY PROFILE
TRENDS
IMPACT
INDUSTRIAL & OTHER
EMPLOYMENT BASE
MAJOR
EMPLOYEE
EMPLOYERS
(#)
1 Manufacturing
11.3%
2 Service
22.2%
3 retail trade
9.5%
4 Education
7.4%
POPULATION
CHARACTERISTICS
(DEMOGRAPHICS)
433,200 (4,230,700
POPULATION SIZE: NZ)
median age= 33.4
AGE DISTRIBUTION: years
average annual
income =
INCOME DISTRIBUTION: NZ$ 687/week
HOUSEHOLD SIZE average size = 2.7
DISTRIBUTION: people (2.7 NZ)
TRANSPORTATION SYSTEM & FACILITIES
31
AIRPORT: Auckland Airport
BUS TERMINAL: Intercity Bus terminal
Cruise line : train between Christchurch and Picton
VISITOR ATTRACTIONS & RECREATIONAL
FACILITIES

Auckland City Art Gallery

Auckland Museum

Victoria Park Market

Auckland Harbour Bridge

BNZ Observation Deck

Kelly Tarlton’s Antarctic
Encounter & Underwater World

Auckland Zoo

One Tree Hill

Auckland Domain

Aotea Centre

Sky Tower
EDUCATIONAL
FACILITIES
Universities:
3 Universities
Secondary schools:
49
Primary intermediaries
schools:
12
Major
Cat: musical play
Boosts inbound
32
tourism
Small range
tourists would
Matariki Festival
come
Mass
FIBA world
championship
International
tourism
Boosts
The food show
Auckland
international
tourism
Source: Google Map
33
Appendix E – Mandarin Oriental Auckland S.W.O.T analysis
SWOT
Strengths
Mandarin Oriental Auckland

Well-reputation (The world’s best hotel in 2008/2009)

Travel services in Australia and New Zealand because Australia is
main target market.

New program “Business Plus”

Good location – near city center and good range of visit attractions

Sustainable system is applied.

Strong reservation system and marketing effort.

Agenda for upcoming events update weekly.

Extraordinary service and luxury facilities.

Strong tourism partnership. (Cooperate Apex car rental service,
local tourism agency, TAANZ New Zealand)
Weaknesses
Opportunities

Price is reasonable compared with other luxury hotel surrounding.

Lack of frequent guest program

Limited hotel capacity to large size conferences.

Large number of hotels managed may dilute focus.

Further improvement of facilities (Spa facility).

Environmental responsibility (sustainability, green design practice)

Repeated customers from main target market (Australia, US, China).
34
Threats

Cheap flight to New Zealand available.

Many strong competitors

Labor cost in New Zealand increase (June 2007 to June 2008 rise
3.7%)

Consumer changes
- Social consciousness (wants, needs, priorities)
- Work/life patterns & social needs (require certain service which
maybe do not have at establishment  lost customer)

Global trend of shorter holidays

Global Economic crisis, main target market travel long distances to
New Zealand
35
Appendix F – Market Strategy, Positioning, Mix and Objectives Analysis
1 Australia
Key factors attracting Australians to overseas destinations included difference, diversity,
experience and value for money (Dunning 2006; Salt 2006; Travel Research Centre 2006 and
research for Tourism Australia). A holiday overseas was also perceived to be more prestigious
and exotic than a domestic holiday (Salt 2006) offering:
• Different food, culture, history, language and climate
• Diverse experiences, scenery and shopping, and
• Value for money in terms of airfares, exchange rates, accommodation, meals etc.
Located near New Zealand, the statistics from New Zealand Regional Tourism Forecasts (20082014) shows that the share of Australian visits New Zealand is the highest percentage amongst
all markets. Nevertheless the forecast for visitor arrivals (2008-2014) shows that Australian
market is growing from 904,000 visitors in 2006 to 1,248,000 in 2014; it grows 31.4% (The
Ministry of Tourism’s Forecast, 2008). The statistic clearly shows that the Australian market will
expect as major growth market for New Zealand.
Furthermore, the length of stay of Australian market is major strength of this market. Australian
market often visits and stays in New Zealand at least for 10 days and average expense per night
was NZ$156 in 2007, and will increase to NZ$186 by 2014 (New Zealand Tourism Forecast
2008-2014, 2008). Research clearly the market, Marriot Auckland will create package program
such as corporate with tour trips, create activities because of long length of stay. Marriot
Auckland wants to give more value in the package exceed than what customer’s expectation and
gives memory experience to customer in order to attract them visit again the establishment.
Nevertheless, Marriot Auckland located in city centre but it is quite far from airport
approximately 40 minutes so shuttle bus or special transportation will be provided to make
customer feel comfortable with the service.
Australia and New Zealand are neighbors, in order to attract and keep customer visit; Mandarin
Auckland will have special Australian menu to make customer feel as they are at home and enjoy
36
the time to stay. However, chef will specific cook according to customer’s wish and they will
give as much effort as possible to satisfy the customer.
Objectives:
 Create good image of luxury hotel and value for money
 Attempt to reach highest occupancy in the market for the duration of the Rugby World
Cup 2011.
 Achieving 30% market share of Australian market within 3 years.
2 United Kingdom
The second largest international visitor is from United Kingdom almost 270,000 people come to
New Zealand annually (“United,” 2009). British travelers stay 31 average nights with NZD
$119.00 average expenditure per night and spend NZD $3,733.00 during their stay (“IVS,” 2009).
Most of them come for their holiday, 50.5% of the total British arrival (“Visitor arrivals,” 2009),
following by visiting friends and relatives, business, education, and other respectively. There are
more senior travelers than youths normally, 48% of British visitors aged 45 and older while 38%
are 15 to 34 (“Market,” 2009), but in winter time it trends to increase younger market (“Visitor
arrivals,” 2009).
The British visitors always come in the end and beginning of the year, the peak months are
December, January, and February, at least about 39,000 arrivals in each of these months
(“Visitor arrivals,” 2009). One of the main reasons that bring British people to New Zealand is
landscape; visitors are highly satisfied to do the activities such as general sightseeing, bungy
jumping, glacier walks, kayaking, sailing, ballooning, water skiing, and white water rafting
(“Visitors satisfaction,” 2009). Moreover, people also get advantage from rate exchange New
Zealand offered to against the recession, NZD $1 is GBP 0.384 (“United,” 2009). Pound have
better value in New Zealand compare to North America and Europe Zone (“Market,” 2009), it
attracts British people to spend long holiday there.
However, the number of British traveler trends to decrease as a result of current economical
crisis. It has continued to decrease since 2006, from 285,927 visitors in the year end ended
37
March 2006 go down to 245,330 in March 2009, 14.2 % negative change from the peak year
(“IVS,” 2009). Therefore, the tourism New Zealand has created the market activities to attract
more British travelers. According to the research found that the most motivating people to come
to New Zealand is word of mouth, the campaign “What Do You Say UK?” launched in
September 2009. The television commercial is about what British visitor talk about their holiday
in New Zealand, it stimulates British people to think of New Zealand for their “next holiday” not
“one day” holiday. This effective campaign increases nearly 50 percentages of users the UK
gateway of Tourism New Zealand’s consumer website, and the television commercials became
the top ten most-remembered advertisers in the end of 2009 (“Activity,” 2009). Moreover, in the
beginning of this year the second phase of “What Do You Say UK?” campaign was contributed,
which is “Have You Say” mobile studio. It goes along the road and gives the international
travelers chance to send a video postcard back home and it is also recorded in YouTube channel,
100,000 people view it online (“Activity,” 2009). In addition, the rugby world cup is coming, the
great opportunity to bring people to New Zealand.
Furthermore, the research information shows that the main areas that create British visitor
satisfaction are these three sorts of experience, the activities, the accommodation and the
transportation, and the intangible aspects like landscapes and culture, clean environment, and
people (“Overall,” 2009). Most of visitors are happy with the intangible aspects, but some areas
show lower satisfaction such as urban ambience, available of good food, and driving experiences
(“Overall,” 2009).
The research helps the organization to meet the UK market’s need; these following objectives
should be achieved.
 Continuing the effective word-of-mouth campaign “What Do You Say UK?”
 High occupancy percentage during the Rugby World Cup 2011
 Supporting high food quality
 Friendly environmental transportation.
38
3 United States
United States is one of the major countries of the key markets of international visitor arrivals in
New Zealand; that is why our hotel will considerate United States as a main target market.
The number of people coming from the United States is in the top five of international visitors
visiting New Zealand. Although USA has seen its annual growth of population decreased by
11.7%, it still remains an important key market for New Zealand and at the end of March 2009,
was on the 3rd position among nations that visit New Zealand with a total of 196’655 people
(Key tourism statistics, May 2009).
Their total expenditure has declined by 2.2% as of end of March 2009. They are still on the top 3
of international markets’ expenditure (Key tourism statistics, May 2009). However, since 2007
their total expenditure has decreased 86 million$ from 698 to 612 million$.
Even so there is a decrease in the expenditure and number of people visiting New Zealand,
forecast of International Visitor Arrivals to New Zealand is optimistic. They predict an increase
of 9.7%, respectively 1.3% annually until 2014 (New Zealand Tourism Forecasts: 2008-2014).
The main purpose of travelling to New Zealand is for holidays; it represents 61% of the visitors.
37% of visitors stay on an average of 1 to 7 days and 34% of them, 8 to 14 days. This allows our
hotel resort to target directly most of American visitors coming for vacation purpose and as the
majority of them stays from one day to two weeks, we can directly promote packages and special
offers to this target market. Their length of stays is perfectly suitable in order to be staying in a
hotel.
The explications for the decrease on visitor numbers from the US can be linked with the actual
economy condition. However, the New Zealand dollar got stronger compared to the US dollar
which means it is now more profitable for Americans to change their dollars into New Zealand
dollars. This also means they will be more likely to spend more on holidays which would
increase their total expenditure in future trends.
Another explication for this decrease is a lack of awareness from American people. People will
be more likely to come to New Zealand if they knew more about this country and had a better
39
understanding of what New Zealand can offer. That is why New Zealand launched a campaign in
March 2009 in US television. George Hickton, Chief Executive of tourism New Zealand said:
“the cheeky ‘New Zealand LifeBack Promise’ campaign is intended to raise awareness and help
prop up declining visitor numbers from this market” (Life back promise for American tourists,
2009).
Another way that may influence and increase American tourists is the Open skies agreement
between Australia and New Zealand which has the capacity to reduce the air tickets prices (New
Zealand Tourism Forecasts, 2008-2014).
In conclusion, United States is New Zealand's third most important tourism market and even so
the numbers of arrivals and expenditure have been decreasing, this market is still incredibly
important for New Zealand and has a potential for growth in the next years.
Moreover, after this research, the following objectives for our hotel can be applied to the
Amercian market:
 To market to the United States with the use of internet and GDS and any other alternative
distribution channel in order to make us known and present on the market.
 To target middle/up class people willing to go on holidays with special offers and
packages.
 To establish and promote a good image and reputation of our hotel trough internet,
magazine and ads in order to attract people.
 To make competitive prices in order to make American people having value for money
which is a very important issue for American people.
4 Japan
Japan is the largest market among Asian group of incoming tourists to New Zealand despite of
Japanese market has been weaker in recent years because of global financial crisis (Tourism New
Zealand, 2008; Ministry of Tourism New Zealand, 2008). According to the study of Tourism
New Zealand, 2008; Ministry of Tourism New Zealand, 2008 the number of incoming tourists
40
from Japan will fall down slowly until 2010 but it is predicted the market will bounce up again
after that period. However from 2008 the spending levels by key markets increased for visitors
from Japan up to 0.8% to NZ$470M just behind Australia market (up 7.5% to NZ$1.7b) and the
UK market (up 4.1% to NZ$970m). Japanese travelers’ average length of stay is 6 days which is
4 days less compared to Australia which is the largest inbound market for New Zealand;
however the average expenditure of Japanese visitors is approximate NZ$900 more than
Australian does per stay (New Zealand Tourism Forecast 2008-2014, 2008).
Nishiyama (1996) believes that many Japanese wish to travel overseas to confirm what they have
heard from family and friends, read in newspapers, or seen on television; furthermore service in
Japan is excellent. The friendly Japanese workforce treats customers royally. Mandarin will
attack this point by giving high quality service which exceed their expectation and give them
good first-impression. Nevertheless, Embassy of Japan often organize study tour trip for
Japanese students group to visit New Zealand. However the tour trip only organizes in winter
(from September to November) when there is low season for tourism (June – October) in New
Zealand so the expectation of low occupancy is positive. Therefore Mandarin Oriental could
create attractive package for groups in that period such as provide courses to study culture, food
of New Zealand.
The need to have Japanese employee or translator in the property is a must. Nishiyama (1996)
says, that if Japanese are not happy or fully satisfied with a purchased service at their holiday
destination, in most of the case, they do not complain openly. They try to avoid the situation they
are in but hey will tell their friends and family back home about the mistreatment and persuade
them not to go.
Furthermore Japanese prefer to rent car during their travel, Mandarin Oriental Auckland will
cooperate with famous car rental service in New Zealand such as Apex car rentals. The reason
Mandarin Oriental Auckland cooperate with that service because Apex provides alternative
options to customer from budget car to luxury car with cheap price (average $NZD 40 per day).
It gives benefits to difference kind of customers, not only Japanese but also European market.
41
According to analysis above, Mandarin Oriental realize that Japan is high potential market, so
clear strategy and objectives should be considered properly:
 To achieve a market share more than 30% for each segment of the Japan market in three
years.
 Establish good reputation in Japan market by provide the best service in Auckland
 Attract and maintain loyalty customer.
5. China
In early 2008, China overtook Japan to become the forth biggest tourists generating country after
Australia, UK and USA (Tourism Data, 2008). There were 112,398 visitors from this market by
ended 2008. Although this figure dropped down by 7% compared to 2007 due to Sichuan
earthquake and economic crisis. However China’s rapid economic development and fastgrowing middle class will continue to generate significant figures to New Zealand’s tourism. In
December 2008, Chinese visitors contributed NZ $265 million to New Zealand’s economy.
China became the fifth-largest country in terms of expenditure in both 2007 and 2008 (Market
guide: China, 2009). In future, China is expected to be New Zealand’s fastest growing market in
the next seven years with average 8.7 percent of annual growth rate of visitor arrivals, and reach
217,000 by 2014 (Tourism forecast, 2008).
Auckland is the gateway of New Zealand, the largest and most popular tourism destination in
New Zealand. It creates first good impression for the rest of country. In 2007, there were 2.43
million international visitors in Auckland, and are expected to increase to 3.10 million in 2014.
Visitors from China are estimated to increase from 6 percent to 9.5 percent shares of
international visits. It will become 3rd inbound market to Auckland by 2014 (Auckland Forecast,
2008). There were 90 percent of Chinese tourists traveling within New Zealand that would visit
Auckland for their New Zealand trip. In 2007, they spent NZ $221 million in Auckland, and the
number of nights that they stay in Auckland is over one million (Tian, 2008).
As can be seen from those statistics, China is one of most important markets with vast potentials
for Mandarin Oriental in Auckland. Furthermore, Chinese visitors for holiday and business
42
purpose account for 78 percent of total visitors from China in 2007, and 76 percent of Chinese
visitors are age between 30-59 years. Their average length of stays is around 6 days. (Short-term
visitors of China, 2008).
Tian (2008): “Hotels have been the most popular accommodation type for visitors from China
since 1998. According to New Zealand Tourism Research (2007), 70 percent of Chinese total
arrivals and 90 percent of holiday arrivals used this type of accommodation. Chinese tourists
mainly stayed at 3 stars or plus hotel in Auckland according to Tourism Auckland’s statistics,
2007.”
These reflect needs of high standard accommodation for Chinese visitors with strong spending
power. Most of Chinese visitors prefer organized coach tours, although recently this trend is
changing. There is increasing interest from small group and families (Market guides: China,
2009). Therefore, there are many Asian travel agencies focus on this particular market and
arrange several popular package trips to meet those tourists’ needs.
Objectives:
 Mandarin Oriental builds up strong relationship with both travel agencies in New Zealand
and China, and to achieve win-win situation through complex promotion strategies and
organized reservations.
 The hotel must realize that there are some considerations must be taken into account, such as
standards of the hotel. Chinese tourists expect not only deluxe room standards but also a
large and luxury lobby if they book a four or five star hotel.
 Language and cultural barriers, it requires certain number of Chinese staff to deal with this
market.
 Food and beverage must have certain choices for Asians taste.
 Maximize profit from this tremendous potential market and create a positive image in an
early stage.
43
 Offer alternative tools for communicating with this market, such as Chinese version of
webpage enables people from China easily understand.
6 South Korea
7. Germany
German market is growing faster for the past few years; despite the current global economy
crisis the German market show optimistic grow 2.4% per year until 2014 (Tourism New Zealand
2008). Even German market is the last top seven travels in New Zealand but their expenditure
per trip is higher than the Chinese and Canadian markets (NZ$4,883 ) (Ministry of Tourism,
New Zealand 2008). Furthermore the strong Euro and cheaper airfares are also helping
make New Zealand an affordable option. Fares to New Zealand are currently sitting at around
NZ$2,400 with Air New Zealand. However, like all other markets booking lead times are getting
shorter and consumers are hunting for deals. It is expected that there will be a small drop-off in
visitor arrivals in the short term, but in the medium to long term New Zealand is likely to remain
as popular as ever with German travelers.
Germans tourists prefer activities involving nature while being based in either bed & breakfast
type accommodation or private household (Tourism New Zealand, 2008). Mandarin Oriental
Auckland use certain marketing technique for German market such as use up-selling technique to
attract them, offers them private room with big space and bed & breakfast included. Nevertheless
German travelers that are making use of the Working Holiday Program of the New Zealand
Government (A working holiday in New Zealand - Immigration New Zealand, 2005). In order to
attract this market Mandarin Oriental Auckland should advertise with specific distribution
channel in Germany such as StepIn (Work & Travel Neuseeland, 2008), Dialog (Work and
Travel Neuseeland, 2008), or Travelworks (Work & Travel in Neuseeland, 2008). According to
Tourism New Zealand (2008), Germans prefer travel based on their knowledge than booking
from travel agency. Hotel will provide and update detail information about property, activities
plan and New Zealand’s upcoming event to gives most benefit to them.
The following objectives should be met for the German market:
44
 Market to the German market through internet and travel agency distribution channels
and increase awareness by 40% within 2 years.
 Reach 20% market share of German market in Auckland region within 2 years
 Create positive image as luxurious and professionalism hotel.
45
Appendix G – Activities Plan
Mandarin Oriental Auckland Timetable and Activities Schedule
Fiscal Year: 2010
Assigned
Activities
to
Jan
Feb
Mar Apr May Jun
Jul
Aug
x
x
Sep Oct Nov Dec
Creating the hotel
website
x
Developing
strategic alliance
x
Promoting the
AC/DC Black Ice
World Tour
x
Email newsletters
x
x
x
x
x
x
x
x
x
Press releaseValentine Day
x
Promoting
Auckland Cup
Week
x
Pasifika Festival
promoting
x
Producing guest
newsletters
Collection
distribution
x
x
46
x
channels
information
Selection and
connecting
distribution
channels for each
market
x
Designing the
package tour for
each market
x
Printing and
distribution of
brochures in
several languages
x
Develop
relationship with
Asia agencies
x
Building
relationship with
“what do you say
UK” campaign
x
Promotion to
local people and
New Zealand
travelers
Creating special
x
x
x
x
47
offer for
Christmas and
New Year
Christmas and
New Year
promoting
x
x
Mandarin Oriental Auckland Timetable and Activities Schedule
Fiscal Year: 2011
Assigned
Activities
to
Jan
Feb
Mar Apr May Jun
Jul
Aug
x
x
Sep Oct Nov Dec
Analyzing marketing
budget
x
Producing guest and
employee newsletters
x
Email newsletters
x
Marketing anlysis
x
x
x
x
x
x
x
x
x
Pasifika Festival
promoting
x
Press release- Valentine
Day
Update distribute
x
x
48
x
brochure
Evaluating marketing
objectives, strategies and
tactics for each target
market
x
x
x
x
Re-assess distribution
channels for all markets
x
Begin promotion of
Rugby World Cup
x
Creating special offer
for Christmas and New
Year
x
Christmas and New
Year promoting
x
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x
Appendix H – Marketing Budget
Mandarin Oriental (opening 1 Jan
2010)
Marketing Budget Calculation
Sheet
Number of
rooms
Rack
Rate(NZ$)
Premier room
35
250
Harbor room
30
300
Deluxe suite
25
380
Oriental Suite
20
460
Mandarin suite
15
470
Howarth Suite
8
500
Auckland suite
2
650
number of days
90
91
92
92
365
Jan - Mar
Apr -Jun
Jul - Sep
Oct - Dec
Year
85%
70%
58%
90%
76%
Premier room
$669,375
$557,375
$466,900
$724,500
$2,418,150
Harbor room
$688,500
$573,300
$480,240
$745,200
$2,487,240
Deluxe suite
$726,750
$605,150
$506,920
$786,600
$2,625,420
Oriental Suite
$703,800
$586,040
$490,912
$761,760
$2,543,685
Mandarin suite
$539,325
$449,085
$376,188
$583,740
$1,949,237
Howarth Suite
$306,000
$254,800
$213,440
$331,200
$1,105,950
Forecast Revenue by Qtr 2010 2011
seasonally adjusted occupancy rate
2010
50
Auckland suite
$99,450
$82,810
$69,368
$107,640
$359,434
$2,084,625
$1,735,825
$1,454,060
$2,256,300
$10,074,495
Jan - Mar
Apr -Jun
Jul - Sep
Oct - Dec
Year
87%
74%
64%
85%
78%
Premier room
$685,125
$589,225
$515,200
$684,250
$2,475,156
Harbor room
$685,125
$589,225
$515,200
$684,250
$2,473,800
Deluxe suite
$704,700
$606,060
$529,920
$703,800
$2,544,480
Oriental Suite
$743,850
$639,730
$559,360
$742,900
$2,685,840
Mandarin suite
$552,015
$474,747
$415,104
$551,310
$1,994,269
Howarth Suite
$313,200
$269,360
$235,520
$312,800
$1,131,500
Auckland suite
$101,790
$87,542
$76,544
$101,660
$367,738
$2,133,675
$1,835,015
$1,604,480
$2,130,950
$11,197,626
Room revenue totals
2011
seasonally adjusted occupancy rate
Room revenue totals
% of
Revenue
Budget
8 months upto opening
7%
$705,215
2010
5%
$503,725
2011
5%
$559,881
Marketing Budget to 2011
51