Strategic Marketing Report for the Association of Scottish Self Caterers (ASSC)

CASE STUDY: ASSOCIATION OF SCOTLAND’S SELF CATERERS (ASSC) STRATEGIC MARKETING REPORT
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Word Count: 6973
Table of Contents Executive Summary. 2 1.      Introduction. 4 1.1.       Organisational Background. 4 2.      Situational Analysis. 5 2.1.       SWOT Analysis. 5 2.2.       Market Analysis. 9 2.3.       Competitor Analysis. 10 2.4.       Customer Analysis. 10 2.5.       Organisational Analysis. 11 2.6.       Product Analysis. 11 3.      Marketing Objectives. 12 4.      Strategy. 14 4.1.       The Target Market for ASSC and its Members. 15 4.1.1.        Customers. 15 4.1.2.        Competitors. 16 4.1.3.        Collaborators. 16 4.1.4.        Company. 16 4.1.5.        Context 17 4.2.       Value Proposition for ASSC and its Members. 17 4.2.1.        Customer Value. 17 4.2.2.        Collaborators Value. 18 4.2.3.        Company Value. 19 5.      Tactics. 23 5.1.       Product 23 5.2.       Price. 24 5.3.       Place (Distribution). 25 5.4.       Promotion. 25 5.5.       Physical Evidence. 26 5.6.       People. 27 6.      Conclusions and Recommendations. 27 References. 29 Appendices. 35
Overview
In a post-COVID-19 era, ASSC has to focus on the external factors affecting the self-catering sector, such as changes in consumer attitude/behaviour, technology, and marketing trends, while building on its internal capabilities to best represent the self-catering businesses.
Situational Analysis
Strengths
Strong partnerships
Strong brand recognition
Scottish Tourism Alliance Council membership
Weaknesses
Lack an online centralised booking agency
Limited sources of funding
Lack of differentiation
Opportunities
Shifts in consumer preferences
Technology
Growth in the self-catering sector
Threats
Increased competition
Negative perception
COVID-19 and other infectious diseases
Marketing Objectives
Based on the situational analysis, the following objectives were identified:
1) Establish and run an online booking agency by the next quarter
(2) Differentiate from competitors by the next financial year
(3) Increase digital capacity to incorporate new digital technologies within the next three years
(4) Improve the public's perception of self-catering businesses within the next two years. To achieve these objectives
Strategy and Tactics
ACCS should use the 5C marketing framework and the value proposition model to achieve the above objectives. The critical components of this framework are customers, competitors, collaborators, company, and context. ACCS customers include young travellers aged 18-36 years, and its main competitors are self-catering businesses in the collaborative economy. Its collaborators include online listing companies such as Interhome Group. Its context is characterised by a growing desire for authentic tourist experiences and a shift towards digital technologies and marketing. It should also use the product, price, place, promotion, physical evidence, and people tactics to gain a competitive edge.
Recommendations
ACCS should use its human resources component to achieve service differentiation. It can provide ongoing training opportunities for employees working in the self-catering businesses it represents. It should also venture into new geographical areas that provide agritourism or offer new accommodation packages for price-sensitive customers to achieve market development.
1 Introduction
Organisations operate in a dynamic business environment characterised by changes in consumer attitude and behaviour, external factors, and internal capabilities. They have to compete with other organisations operating in the same environment; to succeed; they need to gain a competitive advantage. According to Sahaf (2019, p.11), an excellent strategic marketing approach allows organisations to tackle competition and customers’ needs by being competitor- and customer-oriented in the short and long run. As a result, organisations must utilise their internal capabilities to create customer value while responding to competitors' strategies to gain a competitive advantage. This paper explores and critically analyses how changes in the broader business environment affect the future direction of the Association of Scotland's Self Caterers (ASSC) and how the organisation can use strategic marketing to achieve its marketing objectives and gain a competitive advantage.
1 Organisational Background
ASSC is a Scottish self-catering trade association that was established in 1978. It represents the interests of traditional self-catering businesses offering self-catering properties throughout Scotland (ASSC, n.d.). Consequently, it has played a pivotal part in the Scottish tourism sector by ensuring visitors have access to high-quality short-term self-catering properties during their stay in Scotland.
Its vision is to place its members at the forefront of Scotland's professional, vibrant, and prosperous self-catering sector. The organisation's purpose is "to represent and promote the interests of all self-catering accommodation businesses in Scotland (ASSC, n.d.).” Other than representing self-caterers, ASSC also provides marketing opportunities for self-catering businesses. Specifically, it offers social media opportunities, a customer-facing website, and public relations and press coverage (ASSC, n.d.). Its marketing opportunities are in line with changes in technology in the industry and beyond.
In a post-COVID-19 era, ASSC has to represent the interests of its members by focusing on the external factors affecting the self-catering sector, such as changes in consumer attitude/behaviour, technology, the natural environment, and marketing trends. This necessitates a situational analysis.
2 Situational Analysis
The sustainability and effectiveness of an organisation are highly dependent on its ability to anticipate and respond to its environment. Situational analysis is essential because it allows the organisation to capture the internal and external factors that affect its success (Stravoka et al., 2018). A SWOT analysis is necessary to understand the factors influencing ASSC's success.
2 SWOT Analysis
A SWOT analysis examines the internal factors (strengths and weaknesses) and the external factors (opportunities and threats) that give or deny an organisation a competitive advantage (Baines et al., 2021, p.104).
ASSC’s Strength
Strong partnerships: The ASSC has formed some strong partnerships with equally strong brands such as Airbnb, Sykes, Interhome Group, and Visit Scotland, among others in Scotland and beyond (ASSC, n.d.). These partnerships provide ASSC and its members with access to resources and clients. Such alliances also allow ASSC to increase the revenue generated by its members.
Strong brand recognition: The ASSC is a well-recognised brand in Scotland's self-catering and short-term rental sector and the tourism industry. It is also well-recognised by government authorities. As a result, it has worked with the Scottish Government and local authorities (ASSC, n.d.) to represent the interests of self-catering businesses and support them in achieving their business objectives.
Scottish Tourism Alliance Council membership: The ASSC is a member of the Scottish Tourism Alliance (STA) Council membership (ASSC, n.d.). This membership is a strength because it offers the ASSC and its members several benefits that allow it to be competitive (Scottish Tourism Alliance, n.d.). For instance, the STA membership gives members representation, information, and an opportunity to connect with other businesses in the tourism industry. The latter is essential to ASSC because its businesses target tourists.
ASSC’s Weaknesses
Lack of an online centralised booking agency: The ACCS does not have its own booking agency (ASSC, n.d.). This means that consumers cannot book accommodation directly through the association. Yet, consumers are increasingly booking their accommodation and tickets online. However, it can turn this into a strength by incorporating an online booking agency on its website to ensure visitors on the website have an accessible link for booking their accommodation.
Limited sources of funding: The ASSC is a not-for-profit organisation. However, it has limited sources of funding to support its activities. Currently, the association is primarily funded by member subscriptions (ASSC, n.d.). This means that a reduction in the number of members can reduce its access to funds and cripple its ability to meet its objectives.
Lack of differentiation: The self-catering sector has grown significantly, and new business models that focus on the collaborative economy have emerged (Scottish Government, 2018). This growth has increased competition in the sector. Yet, the ASSC and the businesses it represents lack pronounced differentiation to help it stay ahead of these competitors.
ASSC’s Opportunities
Shifts in consumer preferences: Changing consumer preferences provide ASSC and the businesses it represents with an opportunity to grow. According to STR (2021), the number of consumers in the world who prefer short-term rentals and self-catering accommodation increased by 15% post-COVID-19. This indicates that consumer preferences are changing in favour of short-term rentals and self-catering accommodation. The changes were exceptionally high in the United Kingdom, as shown in exhibit 1. Thus, there is an opportunity for ASSC to meet the demand for self-catering accommodations in a post-COVID-19 era.
Technology: Technology provides ASSC with an opportunity to reach a broader market. According to Scaglione et al. (2018, p.12), technology and information systems allow customers to book tickets and accommodation for their tourist destination. ASSC can utilise technological opportunities to explore and reach a broader market.
Growth in the self-catering sector: According to the Scottish Government (2019, p.8), the self-catering sector in Scotland is growing steadily. This growth gives the ASSC an opportunity to explore the market and increase its market share. The growth in the self-catering industry illustrates that there is a demand for short-term let properties, and as such, ASSC has an opportunity to help its members become part of the growth and expand their businesses.
ASSC’s Threats
Increased competition: With the increasing demand for self-catering accommodation, more businesses have joined the sector, posing a threat to traditional self-catering businesses. According to the Scottish Government (2018), conventional self-catering businesses face stiff competition from collaborative economy businesses or peer-to-peer accommodation providers in Scotland. This increased competition poses a threat to ASSC because the businesses it represents can be pushed out of the market by these newly established accommodation businesses that rely on digital technology to reach more consumers.
Negative attitude towards self-catering businesses: Over the years, self-catering businesses in Scotland have attracted the public's attention and are now viewed negatively. According to the ASSC (2020, p.9), short-term rental businesses have received intense media and political scrutiny, which has painted them as a threat to the housing supply in the country. This has increased the negativity towards self-catering businesses and contributes to stringent regulation of such businesses (ASSC, 2022). This negativity threatens ACCS and its mission to represent and support self-caterers. Exhibit 2 reveals that most residents in Scotland believe short-term rentals negatively impact the community.
COVID-19 and other infectious diseases: The recent COVID-19 pandemic and the future occurrence of such contagious diseases pose a threat to ASSC and the businesses it represents. The pandemic affected the self-catering sector and accounted for losses from which companies in this sector are yet to recover. For instance, the self-catering sector in Dumfries and Galloway lost £15 million in 2020 due to the pandemic (Gillespie, 2021). Such infectious diseases threaten ACCS and its mission to increase market shares, profits, and other interests of the businesses it represents.
Table 1: Summary of the SWOT Analysis
Internal Factors
Strengths
* Strong partnerships
* Strong brand recognition
* Scottish Tourism Alliance Council membership
Weaknesses
* Lack an online centralised booking agency
* Limited sources of
funding
* Lack of differentiation
External Factors
Opportunities
* Shifts in consumer preferences
* Technology
* Growth in the self-catering sector
Threats
* Increased competition
* Negative perception
* COVID-19 and other infectious diseases
3 Market Analysis
The self-catering market has grown significantly in recent years, partly due to changes in consumer preferences and partly due to the demand for short-term tourist experiences. According to the Scottish Government (2019, p.8), the self-catering sector has experienced significant growth in the last few years. Additionally, STR (2021) reveals that consumers’ preferences have changed in favour of self-catering accommodation post-COVID-19. These changes have increased the attractiveness of the self-catering market. And as Czinkota et al. (2021, p.118) reveal, the more attractive the market is, the more it will attract new entrants and increase the competition. ASSC has to consider these changes moving forward to ensure it remains competitive even as the market attracts new entrants. Over time, as the market grows, the market will become competitive because the rate of growth will reduce (Czinkota et al. 2021, p.118). Thus ASSC needs to create strategies to increase its competitiveness as time goes by.
Further, changing tourists are influencing the self-catering market. There is also a shift toward agritourism which has developed in Scotland in recent years (ASSC, n.d.). This shift supports the self-catering sector, especially in rural areas where farming is common.
4 Competitor Analysis
According to Hitt et al. (2020, p.63), understanding a competitor's current strategy, strengths, and weaknesses enhances a firm's ability to compete effectively. The ASSC and the businesses it represents face stiff competition from non-traditional self-catering accommodation in the collaborative economy (Scottish Government, 2018). Self-catering accommodation businesses in the collaborative economy differ from traditional self-catering businesses because the former extensively use new digital technology to provide short-term accommodation. In contrast, the latter does not use digital technology as much. As the Scottish Government (2018) reveals, using digital technology in a collaborative economy allows such businesses to address accessibility issues by removing geographical constraints and increasing digital connectivity. The ASSC and its members lack this digital capacity, which puts it at a competitive disadvantage. However, these competitors do not have the backing of powerful brands such as the (STA), of which ASSC is a member (ASSC, n.d.). They have also not formed the same strong partnerships that ASSC has formed with strong brands such as Sykes and Interhome Group. These partnerships put the competitors at a disadvantage against ASSC and its members.
5 Customer Analysis
The target customers for ASSC and its members are tourists interested in experiencing Scotland within a limited time frame. When most of the vibrant population consists of millennials and Gen-Z, the use of technology in researching and booking tourist destinations and accommodation is standard (Veiga et al. 2017). The target customer of ASSC is primarily millennials and Gen –Z who desire to travel the world. Specifically, they want to have authentic experiences as tourists and, as such, are more likely to seek accommodation in residential areas (Veiga et al. 2017, p.3). Additionally, they prefer booking their accommodation online, mainly through an online booking/travel agency (Wiastuti & Ngatemin 2020, p.6).
Further, as people who value digital connectivity, the target customers prefer sharing their tourist experiences on social media. They use user-generated content to assess tourist destinations (Veiga et al. 2017, p.3). Therefore, ASSC has to meet the needs of this target market to enhance its competitiveness in the sector.
6 Organisational Analysis
ASSC’s main competencies include strong partnerships and brand recognition, as well as membership in the STA. These competencies have given it a competitive edge over its competitors in the non-traditional self-catering accommodation businesses. However, it lacks the digital capacity, a booking agency, and multiple funding sources to support its mission. These weaknesses hinder its ability to exploit existing opportunities. As Hooley et al. (2020) indicate, the ability of organisations to exploit opportunities depends on the available resources and competencies. ASSC's limited digital capacity hinders it from exploiting the technological opportunity of reaching a broader market. The lack of multiple funding sources also hinders its ability to exploit the current steady growth in the self-catering sector or the changing consumer preferences toward self-catering accommodation. Access to finances can help it expand its marketing activities and ensure that more members are meeting the demand for self-catering accommodation.
7 Product Analysis
ASSC and its members offer short-term accommodation services through self-catering properties and short-term rentals. These products are of high quality and standard. According to the ASSC (n.d.), the high standards of self-catering properties and short-term rentals is enhanced through consistency in cleanliness, quality, and comfort. According to Martin et al. (2018, p.5), customers check for attributes such as the furniture, Wi-Fi connection, staff friendliness, and property size when assessing the quality of self-catering accommodation services. These are attributes that ASSC and its members should focus on to ensure improved product quality.
3 Marketing Objectives
Marketing objectives play an instrumental role in the strategy of an organisation. According to Lancaster (2018, p.62), marketing objectives are linked to a firm’s mission statement and overall corporate strategy. ASSC wants to put its members at the forefront of the Scottish self-catering sector (ASSC, n.d.). Its corporate objective is to ensure its members are the leaders in the self-catering market. Organisations achieve such an objective by developing a marketing plan and setting marketing objectives (Jobber & Ellis-Chadwick 2020, p.605). The ASSC needs a marketing plan with clear goals. Based on the above situational analysis, below are ASSC’s primary marketing objectives:
* Establish and run an online booking agency by next quarter
Currently, the ASSC does not run an online booking agency for its members (ASSC, n.d.). The lack of a centralised online booking agency denies it the ability to increase the market shares of its members. Wiastuti and Ngatemin (2020, p.6) revealed that most tourists, especially the-savvy Gen Z and millennials, prefer to book their accommodation and travel tickets through an online booking/travel agency. In the absence of an online booking agency, ASSC and its members risk losing these customers to competitors who have an online booking agency or other online options for booking accommodation and making travel arrangements. To turn this weakness into a strength, ASSC needs to establish a centralised online booking agency for its members.
* Differentiate from competitors by the next financial year
The ASSC strives to offer high-quality and standard short-term rentals and self-catering properties by encouraging its members to provide quality accommodation consistently. However, its main competitors in the collaborative economy also strive for the same (Scottish Government, 2018). As such, it must differentiate from these competitors to remain competitive. ASSC needs to create a service model for its members that distinguishes them from competitors. According to Genc and Over (2018, p.91), one of the critical concepts businesses in the accommodation sector can use to differentiate themselves from competitors is the human factor. This concept refers to the services offered by employees working in the accommodation sector. The ASSC can help its members stay competitive by differentiating the human resources to improve the services provided to guests.
* Increase digital capacity to incorporate new digital technologies within the next three years
As revealed in the situational analysis, ASSC has a limited digital capacity compared to collaborative economy competitors. This limits its ability to capture a broader market. According to Alford and Jones (2020, p.1), more consumers are making travel arrangements online, and this has forced businesses to adopt digital technologies. However, small businesses are lagging behind in the adoption of digital technologies. Such technologies include e-marketing and e-business technologies. ACCS has limited digital capacity because customers can only contact its members directly for booking. Since these members are small businesses, they lack the digital ability necessary for sustainable competitive advantage in the self-catering accommodation sector.
* Improve the public's perception of self-catering businesses within the next two years
Currently, the ASSC’s main threat stems from the negative perception held by the public toward self-catering businesses in residential areas. Most residents believe self-catering accommodation businesses negatively impact the community (Scottish Government, 2019). This negative perception works at the disadvantage of ASSC and its members. Improving this perception is vital to ASSC and its mission. According to Ferell et al. (2022, p.99), organisations can also draw their competitive advantage from perception rather than reality. This means that if the organisation is perceived positively, it can have a competitive edge over others in the industry. The opposite is also true in that negative perception, however different it is from reality, can be a source of competitive disadvantage. It needs to change how the public perceives it and the self-catering accommodation business in general to gain support as well as a competitive advantage.
4 Strategy
A company’s business model is characterised by strategy and tactics (Chernev, 2019). This section focuses on the strategy that ASSC should integrate to achieve its desired marketing objectives. According to Chernev (2019), marketing strategy incorporates the target market and the value proposition of the business. Thus, the market planning framework should be explored through the lenses of these two components. The 5C marketing framework is a framework that assesses the factors that define the target market. As shown in exhibit 3, customers take a central position in the 5C marketing framework.
8 The Target Market for ASSC and its Members
To effectively plan for its market, the ASSC must understand the market. The 5C framework is a good marketing planning framework to achieve this. It has five key components: customers, competitors, collaborators, company, and context.
1 Customers
Customers refer to individuals or organisations whose needs are to be met by the company (Iacobucci 2022, p.7). The ASSC and its members fulfil the customers' need for short-term and self-catering accommodation for an authentic tourists experience. These customers are international visitors looking to stay in Scotland for a short period and want to experience Scotland the way the locals do. Most travel just for a few days, and during this time, they want to learn something new about the local community (Visit Scotland 2020, p.15). For this reason, they seek accommodation in residential areas so they can be immersed in the local community and authentically experience the local culture (Veiga et al. 2017, p.3). According to Visit Scotland (2020, p.1), a majority of international tourists in Scotland are young travellers aged 18 to 36 years. Thus, the demographics of ASSC’s customers include millennials and Gen Z. These individuals are tech savvy and want to share their experiences on online platforms (Veiga et al. 2017, p.3; Wiastuti & Ngatemin 2020, p.6). This group is a bit price sensitive and is looking for an authentic experience at a cheaper cost (Visit Scotland 2020, 17). There is also another group of international visitors in Scotland: families. This group is interested in taking short breaks between their busy schedules but also wants an exciting, family-friendly accommodation experience (Visit Scotland 2019, p.12). ASSC must meet these needs to remain competitive.
2 Competitors
Competitors refer to the entities that meet the same customers' needs (Iacobucci 2022, p.7). ASSC must strive to provide superior customer value because customers will also be attracted to the offering of competitors. For instance, the main competitors to ASSC and its members are the self-catering businesses in the collaborative economy (Scottish Government, 2018). These businesses use new digital technologies such as e-commerce and e-marketing to provide and rent their sh...