Analysis And Strategies For Maruia Hot Springs Essay.

Read the case study base on Maruia Hot Springs and answer the following questions

1. Conduct a SWOT analysis on the given organization in order to identify and evaluate the importance of the impact of external and internal environments on the organization's strategic options.

2. Apply Porter's five Forces Model to determine how well the given organization can compete in the marketplace.  

3. Develop a vision statement and two  specific, SMART objectives that will help the given organization achieve its strategic vision and improve its marketing strategies.

4. Segment the market for the given organization into different segments using four segmentation methods and present your findings. 

5. Identify the target segments for the given organization and suggest a targeting strategy for • the chosen segments and support with justification.

6. Use the four elements of positioning to construct a "Positioning Statement". Explain how the given organization can apply market research to develop the defined positioning statement.

7. Propose, with reasons, the best possible marketing mix strategies, using the 7Ps, for the given organization's product/service.

8. Provide an action plan to implement the bat strategies of your choice. Your action plan should be focused on tasks involved to implement the strategy, the people who will be accountable for the tasks, the allocated budget for the tasks, the potential barriers to implementation, and time frame to complete the tasks so that the overall strategy can be implemented successfully. 

9. Develop two standards to monitor the given organization's performance and demonstrate two control tools to control the implementation process.

10. Identify one internal and one external key stakeholders and evaluate the importance of the role of these stakeholders in achieving the success of the given organization. Propose and justify two effective communication strategies to engage with these stakeholders.

SWOT Analysis of Maruia Hot Springs, New Zealand

Strengths	· This hot spring has been providing wellness experience to people for more than a century, and hence, is a historical natural thermal mineral spring. · It has convenient location, 1 hour from Hammer Springs and 2.5 hours from Christchurch, located within the Lewis Pass National Reserve (maruiahotsprings.nz, 2018). · Natural beauty of the surrounding rugged mountains and native beach forest offer an exotic and attractive location for the tourists. · Newly renovated facilities are one of the best in the country.
Weaknesses	· Very less number of employees, with seasonal employment · Flat organizational structure, lack of proper management and inefficient human resource practices resulting in higher employee turnover rate and low organizational effectiveness (maruiahotsprings.nz, 2018). · Organization does not have mission and vision statements and thus lack the spirit in the employees, resulting in lower productivity
Opportunities	· New Zealand ranks 5th among the top 6 mineral/thermal spring market in the Asia-Pacific by 2013, with 96 establishments and revenue worth of 255 million USD (Rotoruanz.com, 2018). · All the 96 establishments offer differentiated hot springs experience, n terms of natural beauty, services, prices, etc. that brings customers to different establishments. · According to the Global Wellness Institute, there is 14% growth rate in the wellness experiences, which is more than twice than the total tourism expenditure (6.9%) in 2013 (Rotoruanz.com, 2018). · The market for wellness is growing rapidly with a wide range of quality experiences. · The value additions are increasing over time, such as, the customers can add some extra payment and enjoy a variety of services along with their experiences and hence, that is encouraging the organization to offer more personalized services. · The customers are preferring the transformational experiences, which creates opportunities for the establishments to launch new activities and services.
Threats	· The competition in this industry is growing rapidly. · Top 26% establishments accounting for 63% of the total revenue in the thermal and mineral sector presents a tough situation for the smaller and new establishments (Rotoruanz.com, 2018). · Customers moving away from the experiential activities towards transformational experiences are creating threats for the older establishments that do not have much transformational activities for the customers.

From the above analysis, it can be said that, that growing market opportunities are extremely important in influencing the strategic operations of Maruia Hot Springs. As the level of value additions is increasing in the industry and people are moving towards transformational experiences in these wellness destinations, the establishment, under the ownership of James White and his partner Kim, has collaborated with Peninsula Hot Springs and initiated a global hot springs research study to bring improvements in the activities and facilities of Maruia Hot Springs. A massive level of renovations in accommodations, sauna experiences, changing rooms, etc. was undertaken to rejuvenate the place (Kidson, 2018).

2. Porter's five forces model is a tool for analyzing the competitiveness of the business environment for an organization (E. Dobbs, 2014). This model illustrates five forces in the industry that determine the competitive intensity and therefore the profitability of the business. By analyzing these forces for Maruia Hot Springs, its potential scope for profitability can be measured.

                                                   

                                                                  Figure 1: Porter's five forces framework

                                                                             (Source: E. Dobbs, 2014)

This model is applied to understand the competitive position of Maruia Hot Springs in the market.

Bargaining power of buyers	This is high as the customers want to have the most value from the money they spent to have the best wellness experience, and as there are many other hot springs establishments in New Zealand that provide almost similar services, the cost of switching for the customers is quite low. Hence, international standard of services must be provided all the times to retain the customers.
Bargaining power of suppliers	This is moderate as the suppliers of services do not have much choice to change their partnerships. There are some local suppliers to Maruia Hot Springs, such as, the food raw materials suppliers, who cannot change their partnerships even if it pays a low or moderate price, as going to other establishments would require them to travel more and that would eventually increase their cost. However, they have the liberty to change their partnership contract with Maruia if their profit margin is not met.
Threat of new entrants	This is very low as the hot springs are a natural attraction and its supply cannot be increased. Hence, new entrants cannot open up a new establishment. However, they can opt for a joint venture, can take over the ownership of earlier establishment or can collaborate with existing organizations, which requires high investment cost.
Threat of substitutes	This is quite high as there are many other international level hot springs establishments in New Zealand that offer highly personalized services and experiences. However, the location of Maruia is within the Lewis Pass National Reserve, which is quite unique and the other establishments cannot provide the comfort of hot springs and surrounding forest experience together.
Competitive rivalry	Competition is very high in New Zealand as there are 96 hot springs establishments. One of the major competitors is Peninsula Hot Springs, which is also a shareholder of Maruia.

Thus, it can be said that Maruia Hot Springs face a highly competitive market. The bargaining power of buyers, competitive environment from the other establishments and threat of substitutes are quite high for Maruia and hence, it needs to focus on its additional services to attract new visitors and retain the loyal visitors, who return to enjoy the tranquil nature. Hence, to increase its profitability and secure a better position in the market, Maruia needs to explore the opportunities and offer more value additions.

Maruia Hot Springs wants to be the most popular health, wellbeing and retreat destination in the next 5 years by providing the ‘world class’ services and facilities in New Zealand, where the customers can rejuvenate and connect with their inner selves, their loved ones and with the purest of the nature and explore their best abilities.

Porter's Five Forces Analysis for Maruia Hot Springs

Vision statement of an organization reflects the future ambition of it in the industry. It depicts how the organization wants to achieve the future goals and objectives and where it wants to see itself in the industry (Taiwo, Agwu & Lawal, 2016). The vision statement mentioned above illustrates that in the next 5 years, Maruia wants to secure a good position in the ranking of the hot springs establishment within New Zealand in terms of world class wellness services, coupled with highest quality dining, staying and opportunities for exploring the surrounding national reserve. To achieve this goal, Maruia needs to give a reason to the visitors so that they visit this place repeatedly.

Two specific objectives

Specific objectives refer to those objectives of an organization that put emphasis on particular tasks. The specific objectives for Maruia are framed with a focus on the next 2 years.

• Achieve higher employee retention rate in the next 2 years through efficient human resource practices
• Achieve financial stability and efficient marketing management.

These two objectives are aimed at increasing employee retention through the efficient HR practices, improving its financial condition and implementing effective marketing management. Increase in the quality of services is highly dependent on the retention of skilled and experienced employees and on the financial stability of the organization. This is again beneficial in motivating the employees through financial benefits, incentives and rewards. This is also important for introducing international standard facilities and services. Lastly, efficient marketing management is required to highlight its products and services to the visitors.

4. Market segmentation refers to the process of dividing the market of potential consumers into different segments or groups on the basis of their different characteristics (Cross, Belich & Rudelius, 2015). There are usually four types of market segmentation, namely, geographic, demographic, psychographic and behavioral. These are important to fulfill the wants and needs of the customers in a more precise manner through effective utilization of resources. The market segmentation for Maruia Hot Springs based on the following four market segmentation criteria are as follows.  

Geographic segmentation	Wellness travelers from New Zealand and all over the world. As Maruia wants to create its position among the best hot springs establishments in New Zealand and among the world, and there is a high inflow of international visitors in New Zealand, the geographic segment is important. This segment includes all the local and international travelers, who make trips for enjoying wellness treatment. As seen from the report of the Global Wellness Institute, the revenue of the wellness travel sector has earned $563 billion in 2015 globally, and hence, Maruia should target all the wellness travelers from across the world.
Demographic segmentation	Wellness travelers, belonging to all age groups, irrespective of their gender, race, and with middle to high income status. Wellness services can be enjoyed by all, as these services offer a feel good factor for people of all ages, genders and classes. To become a popular travel destination, an establishment should cater to people with all types of income. Maruia provides high quality wellness services and other packages such as, dining and different type of accommodations as per the suitability of the visitors in terms of tastes and preferences and budget (maruiahotsprings.nz, 2018), which can increase its popularity among the visitors.
Psychographic segmentation	Visitors, who travel for enjoying wellness experience from the thermal mineral springs, who want to enjoy a luxurious relaxation in their vacations, and, who prefer to stay away from the crowded city and want to enjoy some time with the nature during holidays. This segmentation is based on different personality attributes, interests, attitudes, values and lifestyle of the consumers (Cross, Belich & Rudelius, 2015). Travelling needs are always different for people. While some travelers want to experience adventure, some others want to relax from their busy schedule in a calm and quiet place amidst the nature. Thus, personality traits are a deciding factor for visiting to a hot spring establishment and hence, Maruia must develop its marketing strategies to address those traits of the visitors.
Behavioral segmentation	Customers, who want to enjoy more values for the money paid and who would stay loyal to the organization at all times due to their quality or product and/or service. This segmentation is mostly dependent on the buying behavior of the consumers (Bruwer, Roediger & Herbst, 2017). Purchasing pattern of people depends on brand loyalty, price, quality, preferences for benefits offered and value for money. This is applicable for the travel destinations also. Thus, some people would prefer to enjoy the value added services from the hot springs, which would influence them to have a good impression about the establishment and would make them loyal customers. Hence, Maruia should focus on further value addition to its products and services in the future to secure its position in the market.

There are four generic segment targeting strategies, which consider the basic factors, such as, the size and growth rate of the market segments, structural attractiveness of the segments, and compatibility with the company objectives as well as resources. West, Ford & Ibrahim (2015) explained these generic strategies as undifferentiated or mass marketing, differentiated marketing, concentrated or focused marketing and direct marketing. These are explained below with respect to each of the market segment.

Geographic segment: undifferentiated or mass targeting

As Maruia Hot Springs aims to grow as one of the best world-class wellness service providers, large scale national and international visitor footfall is required. Hence, visitors from all over the world are the target market for the organization. Thus, for this geographic market segment, the organization will apply undifferentiated or mass marketing. Under this strategy, the organization considers the market as one single big market and the marketing mix would be same. Maruia Hot Springs does not differentiate between its customers based on their regions and hence, undifferentiated targeting strategy is applied for this segment.

Marketing Mix Strategies for Maruia Hot Springs

Demographic segment: differentiated targeting

Maruia Hot Springs targets the wellness tourists, irrespective of their age, gender and race. These tourists travel either solo or with friends or family. Thus, people of any age group, gender and race can be wellness tourist. However, they target people with higher to middle income status. As they provide a luxury service, people with low income will not be able to afford these. Thus, they will use a differentiated targeting strategy. Distinct marketing mix will be used for three groups, a couple, a family with a large number of members and a group of adult individuals who are not part of a family.

Psychographic segment: differentiated targeting

This market segment has different groups with different needs and hence, different type of targeting techniques should be applied for them. Each group will need different and specific marketing mix based on their preferences. Maruia Hot Springs thus targets the groups that have needs like wellness treatment, luxurious retreat in nature’s lap, and isolated stay from the city life for few days or for a weekend with separate marketing mixes.

Behavioral segment: customized targeting

Value for money is the main motive of the visitors under this segment and hence, Maruia Hot Springs needs to focus on giving value addition services or customized services through loyal membership. They need to offer discounts, extra services and special packages on the birthday month of the members once they get the loyal membership by paying a certain extra amount annually. This strategy is helpful in retaining the loyal customers.

6. Positioning statement of a brand defines the customers and the desired perception of the brand in the market (Batey, 2015). The four basic elements of a position statement are:

1. Target audience
2. Frame of reference (FOR)
3. Benefit or point of difference (POD)
4. Reason to believe (Batey, 2015)

The position statement for Maruia Hot Springs could be:

“Maruia Hot Springs (FOR) is the world-class luxurious wellness retreat in the lap of nature (POD) for you (Target audience) to unwind and connect with yourself and with your loved ones at a fair price (Reason to believe).”

The hot springs establishment in New Zealand can apply the market research in a more specific way to define all these elements for a successful brand positioning. Through market research, Maruia Hot Springs can get an in-depth idea about the characteristics of the frequently visiting customer groups, such as, the age group, economic class, nationality, preferences, etc.  This will help the organization to prepare more specific marketing mix for the groups.

Action Plan to Implement Marketing Strategies

Market research will also help the organization to establish its point of difference from its competitors. This is the uniqueness of the establishment that makes it different from the competitors (Chernev, 2018). Although there are many other hot springs establishments in New Zealand, Maruia Hot Springs must develop its uniqueness to sustain in the industry. Market research will help it to understand the expectations of the customers and thus, promote its uniqueness in the ways aligned with the customers’ expectations through the position statement (Weinstein & Pohlman, 2015). This is also beneficial for designing and promoting the reason to believe about the brand positioning. The target group must be given a convincing reason to accept the promotional mix of the organization (Bresler & Lubbe, 2014), and this is possible through market research.

7. 7Ps marketing mix for Maruia Hot Springs

 Marketing mix refers to the combination of the factors of marketing that is used to put forward a product or service to the target group. 7Ps of marketing mix includes product, price, place, promotion, people, physical environment and process (Khan, 2014).

                                               

                                                                             Figure 2: 7Ps Marketing Mix

                                                                                     (Source: Khan, 2014)

For Maruia Hot Springs, the 7Ps marketing mix is as follows:

Product (and services): The thermal mineral spring water, which is a natural resource and has medicinal properties, is used for wellness of the travelers. Along with that, there are different types of spa services, sauna and bath, camping facilities, dining experience, comfortable accommodations amidst the nature, and services for exploring the surrounding national reserve that are provided to cater the demands and expectations of different target groups.

Price: Maruia Hot Springs provides these products and services with a price range starting from NZ $40 to NZ $2399. The classic stay with sauna and bathing experience comes for NZ $249 (Secure.maruiahotsprings.nz, 2018) and there after the price increases with addition of extra services, like, dining, different type of accommodations, camping, retreat packages etc. Thus, this organization provides the wellness services at quite an affordable price.

Standards to Monitor Performance of Maruia Hot Springs

Place: Being a travel and retreat destination, the location of Maruia Hot Springs is fixed. This is located within Lewis Pass National Reserve, at a fair distance of 2.5 hours from Christchurch and 1 hour from Hammer Springs. This is quite a convenient location.

Promotion: Maruia Hot Springs should focus more on digital and social media marketing to reach out the customers, especially the millennials. Traditional promotional tools like television, radio, newspapers, magazines and hoardings will be used and to capture more audience, it should organize occasional events and host conferences for the corporate houses. Discount pricing should be promoted for group bookings or on special occasions.

People: This includes both the customers and the employees or people related to the organization. People at every segment of the business are very important and they should be motivated through benefits and rewards to make them perform their best so that the customers get the best services and come back again.

Process: systems and execution processes of the business affects the delivery of the products and services. Maruia has flat organizational structure with only 5 departments and hence, the process of execution is simple. This helps the organization to deliver the world class services quite faster and minimize the waste of resources and cost.

Physical environment: the perception of the brand in the market place attributes to the physical evidence and Maruia should focus on positioning of its brand to create a place in the market. Manipulating the customers’ perception through advertising and actually delivering the products and services would create a strong position of Maruia.

Thus, it can be said that Maruia should design and implement new promotional strategies to address the different target groups about the new renovated facilities and services. It should focus on illustrating the new value added services, new style of accommodations, and all other renovated and refurbished amenities and produce different advertisements with different messages for different target groups. Social media marketing communication strategy should also be introduced to attract the millennial and tech savvy customers. This way it can also be able to collect customers’ feedback, which would be beneficial in decision making process in the long term.

Tasks	Accountability	Budget allocated	Potential barriers	Time frame
Market research (Collecting customers’ feedback prior to designing new marketing strategies)	Front of house employees, managers, R&D department	$1500	Reluctant customers, lack of feedback collection devices, technical issues	3 months
Designing the promotional strategies	Managers, Board of directors, Marketing department	$1000	Market competition, conflict of ideas	3 months
Implementing marketing strategies (advertisements, sales promotions, PR events, social media marketing)	Marketing department, finance and audit department, R&D department, HR department	$30000	Lack of budget, contingencies, negotiations with the marketing agencies and channels, resentful employees	4 months
Evaluating business performance after implementing marketing strategies	Finance and audit department, R&D department, HR department	$15000	Lack of accurate information, reluctant employees and customers for giving feedback, lack of expert for measuring the progress parameters	4 months

• Setting the Key Performance Indicators (KPI):KPIs for Maruia must include the business performance attributes, such as, revenue, income, cost reduction, market share, and employee turnover rate, and that should be measured quarterly to monitor the business performance.
• Setting Key Success Factors (KSF):Technology strategy, salient benefits, cost structure, brand, product capability and financial strength are the key success factors that should be measured to monitor the business performance of Maruia quarterly. These factors are aligned with the KPIs and hence, measure the performance of the business in a wide variety of customer oriented and business oriented activities over the measurement period.

Two control tools for controlling implementation process

• Financial control:The costs of operations and promotions should be controlled and hence, budgets and accounting audit should be performed to keep the costs in line and maintain a feasible relationship between the assets and liabilities of the organization.
• Non-financial control:These are required to keep the employees motivated to perform with the maximum productivity. Thus, Maruia should introduce rewards programs, such as, awards for employee of the month, and quality control by regular checking the products and services delivered to maintain its quality.

Stakeholders are those who have a direct interest in the performance and growth of a business. There are internal and external stakeholders. Internal stakeholders are the employees, managers and owners; and the external stakeholders include the entities like, government, suppliers, society, creditors, shareholders and customers (Cardwell, Williams & Pyle, 2017).

Control Tools to Control Implementation Process

Employees are one of the major internal stakeholders. They are the pillars of any organization. Without diligent, efficient, loyal and productive employees, a business can never be successful. Hence, employee turnover rate is highly important for the success of a business. For the growth of Maruia, the employees working in the 5 departments are very important to run the business, who make the delivery of the world class wellness treatment possible.

Customers are the most important external stakeholder of Maruia Hot Springs. Any business survives due to the existence of the customers. Customers are the source of revenue and income of the business as they come to purchase the products and services. Hence, like all other businesses, Maruia should also focus on delivering the best services to the customers to keep them hooked.

Effective communication strategies for the employees and the customers

Training is an effective communication strategy to engage with the employees of Maruia. The existing and new employees should be given training about how to operate the new systems and renovated facilities and how to improve their services. This will improve their performances and appreciations from the customers and management will keep them motivated (Austin & Pinkleton, 2015).

For establishing an effective communication with the customers, Maruia should ask for feedback about their services and renovated establishment. This would help them to get an idea about the quality of the products and services delivered. Based on the feedback they can take corrective measures, such as, improvement in the products and services, safety features, arranging new equipments or systems and training the employees to enhance their productivity and therefore that of the business. The customers will also be intrigued if they find that their feedback is considered valuable and necessary actions are taken accordingly (Austin & Pinkleton, 2015).

References

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Kidson, S. (2018). New owners rejuvenate Maruia Hot Springs. Retrieved from https://www.stuff.co.nz/nelson-mail/107385065/New-owners-rejuvenate-Maruia-Hot-Springs

maruiahotsprings.nz. (2018). Maruia Hot Springs | Our Story. Retrieved from https://www.maruiahotsprings.nz/our-story/

Rotoruanz.com. (2018). THERMAL & MINERAL SPRINGS DEVELOPMENT // ROTORUA MARKET OPPORTUNITY. Retrieved from https://www.rotoruanz.com/RNZ/media/Media-Library/Business/Do%20Business/PDFs/Rotorua-Thermal-Mineral-Springs-Development.pdf

Secure.maruiahotsprings.nz. (2018). Maruia Hot Springs Package Bookings. Retrieved from https://secure.maruiahotsprings.nz/mhs/1955/findyourexperience

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