MGMT 3850

Prof. Sexton

10/11/2019

How Differentiation Will Make Spring Motel Successful

Introduction

The goal of this upcoming motel business is to be a successful one that will merge as one of the best service providers in the industry. Therefore, will purchase an infrastructure located in the outskirt of Dallas in Corinth and reestablish it to be a successful investment in the industry named Spring Motel. After choosing differentiation as a Porter’s Generic Model of Competition, this motel is to lead by offering high quality products and services to the customers. The motel is priced at $ 1.5 million and has 150 units to rent out. The dominating motels in the city, Irving, Garland, and Mesquite are offering good quality accommodation services, but there are some loopholes they have not yet been covered. This is where the idea of my business comes in. The big competitors are not taking advantage of the attraction sites in the outskirt of the city. Most of them are located closer to the center of the city, making their services even more expensive to the customers.

Target market

Spring Motel will take advantage of the foreign tourists who come to the city. These will be people who come for business meetings, as well as those who come for vacation holidays. The city expects about 27,000,000 foreign tourists every year, with the population being high during the summers (VisitDallas, 2019). Also, these will be customers who will want quality accommodation, with good deals and packages, to justify their expenses.

Customers’ motivation

One of the reasons that will motivate our target clients to buy our accommodation services is that we will provide value for the amount they pay. The big motels in the city offer quality service but do not meet satisfaction. At Spring Motel, we are located a few miles away from Golden Triangle Mall and Music City Mall, near lots of food and gas stations like Buckees, and close to Lewisville lake. Therefore, our customers will get to enjoy these beautiful sceneries, and conveniences.

Market size

There is a big population in the industry to attract. The visitors to the city are about 27,000,000 tourists. This size will need good quality accommodation services including technology to back them up. Dallas is also growing to be one of the largest metropolitans in the nation, and the number is expected to rise shortly.

Personal selling efforts

The main persons entitled to the sales are the manager, front desk person, and social media experts. They will be involved with the follow-up customers through telephone and will not be directly involved in sales and promotion. We will be outsourcing out promotion’s services to digital marketing agencies, as well as web developers to ensure that we have a successful website. The company will spend $ 200,000 annually on sales.Need a 1 page 12 point Ariel font, 1/4 inch indentions,  and single line and character spacing. 

Questions to answer:
Capital Requirements  How much cash and securities do we need to get started? We will bring 20% with us for a loan. 
Estimated Earnings  Can  we beat the Industry averages in the IBIS report? What do the numbers  look like? Do we lose money at first while developing the company? 
Time Out of Cash  Most  firms lose money the first or second year of operations while we pay  off debt. What is the burn rate and when will we run out of money if  there is no profit? 
Return on Investment  Can  we beat the Industry average? What is the normal return on an  investment like this? How soon do we expect to make a return on  investment? 
Remember that  you can estimate your expenses using the IBIS industry report. Start  with your room count, percent of occupancy, and estimated sales. Then  estimate your expenses using the averages listed in the IBIS report. 
 https://libproxy.library.unt.edu:2170/reports/us/industry/default.aspx?entid=1661