Executive summary
The paper mainly focuses on creating a marketing plan for the Puerto Rico Tourism company. Puerto Rico is responsible for ensuring local hotel quality services, physical structures, health and hygienic conditions. The plan will help to secure extra funding for expansion and to inform employees of the current situation and direction. Although the Puerto Rico has managed to unveil its leaders recently, the firm has faced great challenges in delivering quality services to the customers. Therefore, the marketing plan will help in extending the product line and adding new ones into the market. The Puerto Rico government plans to explore new opportunities in the e-marketing in order to capture diverse communities, which will enhance online sales. The marketing environment has been challenging to the company’s high quality services due to the stiff competition in the industry. However, we hope the plan could increase its distribution, provide new products and capture new customers. Therefore, the company is supposed to monitor the progress of implementing the plan and evaluate its performance.
Company Description
The Puerto Rico Tourism Company is the government agency which deals with island’s promotional campaigns. During the past 20 years, the company has spent over $585 millions of the citizen’s money on marketing strategies and promotional campaigns (Leyda, 2011). Although the amount of the tourism hand cost has doubled, the tourism company budget as also increased tremendously. The company is responsible for providing an array of entertainment choices including hundreds of restaurants, nightclubs and casinos, among others. Meanwhile, the company has a number of museums, golf courses and national parks.
Puerto Rico is devoted to helping the community by contributing to local programs. Eventually, the company would like to plan and fund its own training programs in order to help the community understand the significance of tourism. This marketing plan will explain how Puerto Rico intends to introduce new products, enhance its distribution, enters new market and help the community.
Mission and goals
The Puerto Rico’s mission is to be responsible for providing an array of entertainment choices including hundreds of restaurants, nightclubs and casinos, among others. Puerto Rico wants to inspire people on the significance of customer service in the hospitality industry. Thus, the training programs will help to improve the quality of services which make the company to be recognized and expand its outlets. In the next five years, the Puerto Rico aims to obtain financing to expand hospitality industry, increase distribution and introduce new product lines in the market.
The company aims at developing and delivering consistently high standards of customers that will that will strengthen their competitive position. Meanwhile, the company inspires to comply with all legal requirements and utilizes government financial incentives which offer 100 percent tax exemption (Leyda, 2011). The company wants to expand its infomercials into new markets in order to test how customers respond to the destination. The company seeks to expand the e-marketing while maintaining strong relationships with customers.
Core Competencies
Puerto Rico aims at utilizing its core competencies to attain a sustainable competitive advantage that ensures to their rival industries will not meet its standards. It has developed core competencies in providing a high quality services that are recognizable by customers. The company has managed to create a sense of community among customers who enjoy their services and developed a good reputation among suppliers. Thus, Puerto Rico seeks to create these competencies via marketing efforts, which promote the number of services provided as well as distribution outlets. By creating powerful relationships with suppliers, customers,
Puerto Rico hopes it will establish a sustainable competitive advantage in the tourism industry because tourism is its business.
Situation Analysis
The marketing environment for Puerto Rico demonstrate a significant opportunity. It has experienced some challenges in the offering quality services but the company believes with a proper plan it will overcome them. In order to capture the real picture of the Puerto Rico’s marketing environment, we will do a SWOT analysis that will show the company’s situation in the market place.
The company has established some impressive strength and set forward to new opportunities. It has committed leaders, expanding loyal customers and stable cash flow which shows the company is in good position to expand (Leyda, 2011). However, as Puerto Rico seeks to introduce new products and expand e-marketing, it should formulate proper strategies to guard against stiff competition in the market. Puerto Rico has tried to expand its product line and entrance into new market niches. However, to achieve this, the company has to safeguard against failure to recognize its business scope and quality slippages. The table below shows the SWOT analysis of the Puerto Rico Company.
Competition
The Puerto Rico Tourism Company is experiencing some significant competition from Caribbean neighbors because they receive more than a million international visitors each year. These rivals include Cuba, Cancun, Bahamas and Jamaica among others. These are likely to be the company’s most formidable competition for the entire market share in the next five years. However, the number of visitors in the Caribbean has increased by 6 percent since 1997, but Cuba has managed to increase its annual growth rate (Evelyn, 2003). Thus, Cuba has been capable to secure almost 10 percent of overall traffic visitors to the region in recent years. However, the outlook for the tourism industry in general and Puerto Rico in particular is positive for several reasons.
The consumers are seeking for ways to enjoy their leisure time with family without going beyond their budget. Meanwhile, consumers are gaining confidence in the tourism industry and are willing to spend their time and money. Puerto Rico faces competition challenges because it has higher labor and development costs and has invested in higher priced hotel and all inclusive packages. It should apply the Cuba’s strategy if it hopes to attract European visitors by developing the all inclusive model and ensuring that the packages are competitively priced. While Puerto Rico has the significant share of overnight visitors in the Caribbean which amount to 3.3 million visitors, nearly half of the visitors do not stay in hotels but with relatives (Evelyn, 2003). This places the company second to the Dominican Republic in total visitor expenditures.
Puerto Rico has the smallest hotel inventory among its regional competitors. Meanwhile, it has generated the fewest room nights. This means the company‘s tourism competitors are expanding twice as fast. The threat is immediate and unless it respond faster and decisively to attract visitors, its title as the leader in Caribbean tourism will be taken. It would be hard for Puerto Rico to catch up once it lags behind by the other competitors. Although the government plays a significant role in the tourism industry, it is vital for the Puerto Rico to be aware of what must be done. Meanwhile, it should develop cooperation between the private sector and diverse tourism companies in order to have a critical success. Thus, it should develop and deliver consistently high standards of customer service in order to match the level of competitors in the tourism industry.
The Target Market
The target market for Puerto Rico products is active consumers ranging from young to old. These active consumers represent a demographic group of successful persons and well educated such as married, single and raising families. The company targets individuals with income ranging between $80,000 and $140,000 annually (Evelyn, 2003). Although, these consumers may have a comfortable income, they are price conscious and consistently look for value in their purchases.
The East Coast of the united state especially the Tri-state area is the Puerto Rico’s top market target. The company has launched infomercials in new market to test how the customer responds to the destination. The infomercials will continue to air in California and Florida which are secondary markets for Puerto Rico. Thus, the company targets all persons in these regions regardless of their age but who have active lifestyles. The Puerto Rico goal is to target the consumer in the Boston and Florida who form the large Hispanic population who are not aware of its products and services (Evelyn, 2003).
Meanwhile, the company targets political parties because they fit the industry’s reality and demand. They are calling on the industry and government to separate sale and marketing from product development and enforcement. It also recommends integrating the sales and marketing for leisure, groups and conventions into a single. Sales and marketing should also be removed from all possible political interference that keeps tourism promoters and campaigns from being dynamic. Thus, the Puerto Rico has tried to implement marketing strategies that will help in growth into new outlets.
Marketing mix
The Puerto Rico’s marketing efforts are too general which are not known by the customer. In order to improve the marketing strategy we have proposed some marketing mix for the Puerto Rico Tourism Company.
Promotional strategy
Puerto Rico communicates with clients and suppliers about their products in a wide range of methods. The information about the products and the company is being communicated via the company’s websites, direct mailings and phones among others. In the past years, the company has spent millions on marketing campaigns to enhance the number of guests visiting the company. With the growing tendency of online reservations and online hotel bookings the company aims at initiating a campaign that includes more internet promotions. Thus, priceline.com is one of the sites that will be receiving promotional information on Puerto Rico as a marketing strategy.
The company has increased its visitors via the internet which offers special promotional offers on hotels and resort on the island. This new tourism promotion campaign will help to increase tourism activity on the island during the low season months of September until November. Sales promotions and public relation have recently made up the promotion strategy of the Puerto Rico. The company works with diverse outlets to provide short term sales promotions tied to event and contests. The promotional brochures are being distributed via email to Prequalify clients of American Airlines, which is being involved to promote Puerto Rio as a tourism destination. The company aims at designing programs that will enhance hotel occupancy throughout the island, especially during low season.
The island will become a desirable destination in the future, if Puerto Rico invests in the promotion strategy. The Puerto Rico is a flexible industry which makes it easy to implement ideas such as distributing promotional brochures and discount coupons in order to meet the sustainable advantage. Thus, the company plans to engage in the design contest, selecting a winning slogan that can make customer to recognize their products. The company needs to modify, modernize and evolve the campaigns and not to change them constantly. The inconsistent and ever changing promotion strategy will create a distorted image of Puerto Rico (Kurtz, 2013).
Pricing Strategy
In order to meet the stiff competition in the market, the Puerto Rico services are priced with the competition in mind. The company is not concerned with pricing its products at high prices to represent prestige. Meanwhile, it does not attempt to attain the goals of pricing its products at low prices in order to sell high quantities. However, the value of pricing is done so that customers can match their purchasing power with the high quality of services in the market. The company is facing challenges in the pricing strategy because it has problem in defining its identity. The brand offers identical to a service and serves to distinguish it from its competitors. If Puerto Rico has a brand name it would help tourists make the choice in an already saturated and cluttered tourism industry. This will in turn help the company to price their services based on the market conditions. Thus, the company prices its services competitively, providing a reasonable value against its competition.
Product strategy
Puerto Rico is lagging behind at sea with no name recognition. Puerto Rico’s tourism campaigns have failed to establish a significant recall that has failed to create continuity and to establish a brand name for the island. The company is responsible for providing an array of entertainment choices including hundreds of restaurants, nightclubs and casinos, among others. Meanwhile, the company has a number of museums, golf courses and national parks. The Puerto Rico plans to expand its product line in order to include customized services to the customers. This will help during the product development that makes people incapable of identifying with the product. The tourists look for a vacation spot and less concerned about the politics of the place they visit (Kurtz, 2013). Thus, the company aims at creating an image that will last over a period.
However, the company’s slogan is too common and customers cannot remember it when purchasing. In the last 20 years the island has been promoted as Puerto Rico does can make it better among others. The company also plans to provide a series of training seminars on the significance of tourism to university professors, private and public schools and tour guides among others. Meanwhile, the agency is designing a curriculum for the new tourism vocational school at its websites (McDonald and Wilson, 2011). The agency will carry on with super host, a training program developed in British Columbia that emphasizes the significance of customer service in the hospitality industry. Thus, the training will help to improve the quality of services which make the company to be recognized.
Distribution strategy
Puerto Rico has used various distribution channels to create value for the customer. Meanwhile, the Puerto Rico has plans to enhance online sales by providing the customized service via e-marketing. The Company could like to introduce internets in the more feasible store outlets in order for customers to order customized services from the stores. Despite its expansion plans, the Puerto Rico intends to monitor and keep powerful relationships with distribution channel groups. The company seeks to expand distribution to retail specialty shops in various countries focusing especially on the Florida area and Boston. The company is yet to establish whether it will distribute its product via significant national chain like REI because other competitors could consider using such outlets (Ferrell and Hartline, 2013).
Puerto Rico receives its information via social media especially twitter and Facebook and at different types of retail outlets. Meanwhile, the company uses magazines and periodicals for casino distribution network and it uses more than three outlets. The outlets have helped the company to become more competitive and continue serving as a supplier in the Caribbean island. However, the current distribution system in Puerto Rico is out of date and does not meet the standards required in the competitive market.
Market implementation
Puerto Rico should budget approximately $ 6million to expand its operations. This is in-line with its competitors’ average advertising expenditure relative to market share. In a period of one year, an assessment should be made on the effectiveness of the campaign strategy in achieving its corporate objectives. Puerto Rico anticipates that there will be constant operations in the foreseeable future, with no plans to exit the market. As discussed in the plan, the company plans to increase its presence in the market. The company plans to enter into marriage in order to diversify its services and make a public stock offering. The company is supposed to monitor the progress of implementing the plan and evaluate its performance.
References
Evelyn, G. (2003). “Tourism Co.'s new business plan focuses on quality service.” Caribbean Business, Vol. 31 Issue 37, p28-28.
Ferrell, O. C., & Hartline, M. D. (2013). Marketing strategy: text and cases (6th ed.). Mason, OH: South-Western/Cengage Learning.
Leyda, R. (2011). “Competitiveness in the New Millennium in the Caribbean: The Case Of Puerto Rico.” Advances in Competitiveness Research, Vol. 19 Issue 1/2, p50-63.
Kurtz, D. L. (2013). Contemporary marketing David L. Kurtz. (2013 ed.). Mason, Ohio: South- Western Cengage Learning.
McDonald, M., Wilson, H. (2011). Marketing plans how to prepare them, how to use them (7th ed.). Chichester, West Sussex, U.K.: Wiley.
