MARKETING Next Gen - SURNAME 1 Name Institution Course Date...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
SURNAME 1 Name: Institution: Course: Date: MARKETING PART 1 a. Assembled bundled pricing system for the hotel amenities The main goal is to have the best 3 combinations of the amenities in addition to establishing bundle pricing mechanism that would maintain 25% profit margin for the hotel. It is worrying that despite the occupancy rate of the hotel being as high as 80%+, the usage of the amenities was only used at the rate of 45 percent capacity. It is thus imperative to use pricing strategy as a way of inducing customers to utilize all the three amenities as a package in a customer friendly price. Professional Massage, Paddle boating and Spa package put together as one package named as ‘Three in one Special package’ would result in the best combination of the amenities whose outcome is better friendly customer price and more usage. Explanation of the pricing system, final price to offer and price elasticity The pricing system is a very sensitive aspect of consideration that needs careful attention. It is vital for a new hotel to store various strategies of pricing depending on the concentration on the target market needs. It should be noted that the main objective of the hotel, is to maximize its profits. In generating sufficient revenues hence profit, it is critical for the hotel to be in a position to have an effective criterion, in which to charge prices for its products. Prices charged for the products should be worth the quality of such product. It is also important to consider the price charged by the competitors for the similar amenities and the capability of the
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
SURNAME 2 consumers to be willing to pay for the same. The quality of the product should not be compromised in whatever way. In fact, today consumers are willing to buy the product for high prices as long as that is assured of high quality. In maximizing the quality of the product, the hotel can consider integrating with the suppliers of raw materials that have the capability of bringing out high-quality products. All in all, the hotel can easily gain the market competitive advantage by putting more effort on the quality of their amenities. In the determination of the final price to offer, it is prudent to take into consideration of all the costs involved in coming up with a particular product, in this case, the three amenities included in the ‘three in one special package’. Getting the summation of the total cost and thereof adding the required profit margin of the 25% determines the required market price to offer. For instance cost of Professional massage package if the set price is $60 for a 30-minute massage having a 40% PM, then cost = $60- (40%*60) = $36. Paddle boating – price: $25 for the first 60 minutes rental and $5 for each additional 30 minutes beyond the first hour (35% for the first hour and 20% for the remaining hours) Cost=$25-(35%*25) = $16.25for first 60 minutes (for 30 minutes this is equivalent to $16.25/2=$8.125), for $5-(20%*5) =$4 Spa package -price: $95 for a 30 minutes (30% PM) Cost= $95-(30%*95) =$ 66.5 Total cost for (three in one special package) for 30 minutes =$36+ $8.125+4+ 66.5= $114.625 Add 25% profit margin (114.625*25%) = $28.66.
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern