La Hacienda Del Sol Harvard Case Solution & Analysis

Statement of Problems

The president of La Hacienda del Sol, Juanita Garcia, is facing a problem that their sales volume is lower in the winter season, which is the off season for the hotel business in Mexico. Further, Juanita Garcia is in a dilemma where she has to decide that whether entering into the Mexican market will overcome the issue faced by La Hacienda del Sol.

Causes of Problems

However, the sales volume in winter season decreases only because the American travelers reduce their traveling activities in Mexico. Because they like to spend their time enjoying the Mexico’s hot weather, but the winter season causes the United States’ travelers to avoid coming to Mexico. Additionally, the local Mexican consumers have a perception that La Hacienda Del Sol is specifically for the foreign travelers, therefore, they do not stay in La Hacienda Del Sol hotel during any season, which reduces the revenues due to the unavailability of foreign consumers. Further, there are some other issues that limit the revenues of La Hacienda Del Sol such as the consumers are not aware of the availability of SPA services in the hotel premises, and despite the consumers like the SPA services but due to the lack of awareness they prefer to use other hotels with SPA services.

Discussion of Alternative Strategies
Market Segmentation

Juanita Garcia can divide the market for potential customer into two segments according to the location of the prospect customers and according to the different cultural values of the prospect customers. However, the marketing segmentation strategy is used to increase the customer base through effective marketing and targeting a customer on the basis of defined segments. Further, the customers from one location and with different cultural values can be targeted directly without affecting the customers in other location and with different cultural values.

Geographical Segmentation

However, since Juanita Garcia is concerned about the decreasing revenues during the off-peak season, which is during the period of October to May each year. Further, the La Hacienda Del Sol targets the foreign travelers, specifically travelers from the United States. Further, during the peak season the vacancy rate of La Hacienda Del Sol is almost 90%. Hence, Juanita Garcia is not concerned about the sales volume during peak season, which is the summer season, but there are serious concerns of Juanita Garcia over the low sales volume during the off-seasons.

However, the reason for lower sales volume during off season is due to the decreased number of foreign travelers during the off-seasons and further, the reduction of tourist travelers even during the peak seasons. Therefore, targeting potential customers in the United States location during the off-peak season would not attract sizeable customers. Hence, La Hacienda Del Sol will have to target local markets of Mexicans during the off-peak season in order to improve the sales revenues during off peak seasons, so that La Hacienda del Sol’s reliance on seasonal sales for the rest of the year can be reduced. However, Juanita Garcia should also consider the sales in the United States, so that the 10% remaining capacity can also be filled.

Cultural Segmentation

Meanwhile, Juanita Garcia can segment the market according to the culture of two distinct nations, Mexican and United States. Since the culture is different, therefore, different marketing strategy will need to be devised so that the local Mexican and foreign travelers can be attracted to fill the vacant capacity during the off-peak season. However, in order to target the local Mexicans, Juanita Garcia will have to include traditional ways and should make other amenities available within the Hacienda del Sol in order attract them. Additionally, Juanita Garcia will have to include cultural outlook in its services and local architecture in the hotel building.

Sales Promotion Techniques

Several sales promotion techniques are used in order to attract customers, however, sales promotions is aimed to achieve an increase in customer base through offering incentives or an extra service within the same cost of using the services or the hotel rooms.

Service Bundles

However, Juanita Garcia can choose a sales promotion technique that involves, offering a bundle of services to its potential customer at attractive prices. This sales promotion technique will not attract the customers to occupy hotel rooms, but will also increase the consumption of other services provided within the hotel. For example, Juanita Garcia can offer SPA service linked with the hotel booking which increase the sales of hotel rooms, but will also increase the customer awareness of the availability of SPA services within the hotel premises. However, initially the revenue from SPA services would not hear, but Juanita Garcia would be able to cover the cost of SPA service and its profits will mainly .......................

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