Marketing & Entrepreneurship: New Product Concept

The product/service idea of heritage bed-and-breakfast hotel chain spread across Europe is a novel one because no such chain exists in Europe or elsewhere. The idea of having bed-and-breakfast housed in two century old heritage properties is not only a pleasantly romantic one but also one that makes very sound business sense. It caters to a hitherto unmet need of the customers at extremely affordable prices. There are a number of heritage hotels spread across Europe; but all these are luxury ones which are largely beyond the reach of average budget tourists who flock in herds to European cities every year to partake of their splendid and amazing grandeur.

The new product concept is to start a chain of bed-and-breakfast hotels which are housed in heritage properties. For this purpose any property which is more than 200 years old will be deemed to be a heritage one. The concept is new because there is no other bed-and-breakfast chain in the world which is housed exclusively in heritage properties. The hotels of the chain will be located in historically significant locations in key European cities. The first heritage bed-and-breakfast hotel of this chain will be opened in Notting Hill area of London, United Kingdom.

Notting Hill area is of historical significance and attracts a significant number of tourists every year. Europe’s biggest street carnival, the Notting Hill carnival is held annually here. Notting Hill is located in the north-western corner of Kensington Gardens in the Royal Borough of Kensington (Jan O’Malley, 1977).

Paris has been identified as the location for the second bed-and-breakfast heritage hotel of the chain. Bern in Switzerland; Munich in Germany; Amsterdam in Netherlands; Florence in Italy and Vienna in Austria are other locations identified for expansion of the chain in the medium term. The plan is to open hotels of the chain in each of these locations by the end of five years of opening the first hotel in Notting Hill.

Each property of this heritage bed-and-breakfast hotel chain will have at least twenty five rooms. Every room will have attached toilet facilities and will be furnished with double-beds, writing tables, chairs and wooden cabinet. In order to maintain the heritage theme throughout, the furniture in the rooms will be of classical Victorian style.

Every room will be equipped with television and satellite TV connection. The whole property will be Wi-Fi enabled so that guests can access internet from their rooms or any other point in the property.

The guests will get a complimentary breakfast for each night of their stay in the hotel. Every hotel will have a kitchen for the purpose of preparing breakfasts for the guests. American, English and Continental breakfasts will be served in the hotels of the chain; guests will have the choice to choose from any one of them.

The target segment for the heritage bed-and-breakfast chain is the budget tourists segment. Budget tourists flock the major European cities every year in herds. These tourists look for a unique experience which is also affordable. Most of the places catering to the budget tourists are highly standardized and therefore lack any unique charm of their own.

At our hotel chain, the budget tourists will get a very unique experience of living in a heritage property at very affordable prices. This experience will be our unique selling proposition.

The size of the target segment is really big. This gives faith that the business model of a heritage bed-and-breakfast hotel chain spread across European cities will be commercially and financially viable.

The marketing efforts however will not be limited to attracting those from the target segment only. Luxury tourists will also get a unique experience of stay in our hotels. So the tagline for our marketing campaign will be: “Heritage, Luxurious and Affordable.”

There are a number of bed-and-breakfast places and budget hotels in major European cities like London, Paris and Munich. However most of these places cater very standardized products and services. They do not strive to provide the guests with any unique experience.

The focus of our bed-and-breakfast chain will be on creating a very unique experience for the guests. We intend to create differentiation through this experience which will be unique to our chain. Our heritage properties will create the differentiation and will give us a sustainable competitive advantage over rivals and substitutes.

There are currently no other heritage chains in the bed-and-breakfast segment, so there are no direct competitors. There also no existing pan-European bed-and-breakfast chains; in this regard also our product concept is very unique.

The marketing campaign will promote our chain as “Europe’s first heritage bed-and-breakfast” chain. Most of the substitutes and alternatives are either inferior (bed & breakfast places or budget hotels) or are much more expensive (the luxury hotels).

Once our heritage bed-and-breakfast chain is rolled out, competition is expected to follow. However we expect that we will get away with the first mover advantage.

The 4Ps of the marketing plan are:

i) Product: The product is unique – a heritage bed & breakfast hotel chain spread across major European cities. The hotels will be housed in properties which will be at least two hundred years old. One of the critical factors of success will be to identify such properties which are suitable for the purpose of bed-and-breakfast hotel. There is no dearth of such properties in major European cities like London, Munich and Florence.

Site or location is very important when it comes to a hotel. Our bed-and-breakfast hotels will be located in areas of historical or tourist significance.        In London, the first hotel of the chain will be located in the Notting Hill area.

Guest will get complimentary breakfast on the morning following their nightly stay. They will have the option to choose from American, English and Continental breakfasts. Every property will be equipped with a kitchen and two chefs for preparing fresh breakfasts.

Every room of the hotel will be equipped with all the modern amenities like Wi-Fi, amidst heritage settings. All the rooms will have attached toilet facilities.

ii) Price: The pricing strategy is to charge prices that are affordable for our target segment of budget customers. We will still be charging a price higher that other bed & breakfast hotels because of the unique experience that we will deliver besides better quality and better service. Rooms will be priced between GBP 150 – GBP 200 for the Notting Hill property. The room tariffs will be varied according to seasons i.e. higher tariffs will be charged during peak seasons while lower prices will be charged in seasons when the flow of tourists is lean.

iii) Place: A famous hotelier once said: “ When it comes to hotels three things are very important : site, site and site,” (Pinson, Linda. ,2004). The heritage bed & breakfast hotels of our chain will be located in major cities of Europe. The first property will be opened in the Notting Hill area of London. Notting Hill is  a popular tourist destination in London. In other cities too, the properties will be located in areas which are frequented by tourists.

iv) Promotion: Promotions are one of the critical factors of success for our new hotel chain. The bed-and-breakfast chain will be promoted as, “World’s first heritage bed-and-breakfast chain.” The tagline of the promotional campaigns will be : “ Heritage, Luxurious and Affordable,:” and “ Live in 200 year old houses at very affordable prices.”

The promotion budget of the hotel chain has been kept substantial. Advertisements will be run in European magazines, newspapers, television channels and travel related websites. A reputed advertising agency will be hired for creating promotional material and place them in relevant media. The promotional campaign will be launched a week before the opening of the first hotel in Notting Hill, London.

The promotional strategy is to carry intense advertising in the first two years. Once the brand name is firmly established in the market, promotional campaigns are likely to be slackened in subsequent years. Word-of-mouth publicity or viral marketing is then expected to take over and promote the hotel’s brand.

The brand name chosen for the hotel chain is: “Heritage Bed-and-breakfast”. This name gives out our unique proposition of being a heritage bed-and-breakfast chain. One of the objectives of the promotional campaign is to create the right brand image for the hotel chain. The brand image to be pursued for the chain will be that of a very comfortable hotel with a heritage ambience.

Besides brand image, brand recall is also very important for the success of the chain. The first name that should come to the minds of tourists while looking for a place to stay should be of our bed-and-breakfast chain.

The hotels of the bed-and-breakfast chain will be located in major European cities. A PESTLE analysis of Europe reveals the following:

Political Factors: Europe enjoys a very high degree of political stability; it is actually one of the most politically stable regions in the world. Almost every country of Europe is a democracy with very stable elected government (Patterson, Laura, 2008). Markets identified for the expansion of our chain in the near and medium term are the most stable and developed ones in Europe.

Economic Factors: The Euro zone economy continues to be plagued by problems that come with having a common currency area. United Kingdom, where the first hotel of our chain will be opened, is located outside this common currency area and has its own separate currency, the pound sterling. However the British economy too is mired in a prolonged economic recession (Eric S. Siegel, Brian R. Ford, Jay M. Bornstein,1993). In such an economic context customers have become more value conscious; they want higher value for their money and have become less extravagant.  Our heritage bed-and-breakfast chain will deliver on these expectations of the customers.

Social factors: Europe has a developed society with an adequate pool of skilled and educated employees.

Technological Factors:  The technological infrastructure, including that of internet connectivity, is highly sophisticated in Europe.

Legal Factors: Europe has well defined legal laws which govern every aspect of commercial and professional activities.

Environmental Factors:  The local population and regulators are environmentally very conscious (Joshi, Rakesh Mohan,2005). A heritage bed-and-breakfast hotel chain needs to adhere to environment-friendly practices.

The concept of having a heritage bed-and-breakfast chain spread across European cities is a commercially sound one. No other heritage bed-and-breakfast chain exists presently. The chain will give guests the unique experience of living in 200 year old heritage houses at very affordable prices. In this way the concept serves to satisfy an unmet need of the customers i.e. of staying in a heritage place at extremely affordable price.

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