How to Determine Market and Fair Share

1
How to Determine Market and Fair Share

• In assessing competition, a worthwhile exercise
  is to calculate your fair share and your market
  share against that of the competition.
• First step is to set up a table for competitive
  properties showing property size in rooms,
  occupancy percentages, and the room nights sold
  for each.

2
Area Demand Analysis
3
Market Share Calculation

• Actual market share refers to the amount of room
  nights sold by your hotel relative to the total
  room nights sold by you and your competitors.
• It can be calculated for your hotel

Market Share Property Room Nights Sold
335 23.9
Total Market Room Nights Sold 1,400
4
Area Demand Analysis Market Share
5
Area Demand Analysis Market Share
6
Fair Share Calculation

• Fair share refers to the amount of room nights a
  property would sell if demand were distributed
  evenly based on the number of rooms among all
  properties. It is calculated as follows

Fair Share Property Available Room Nights
500 25.4 Total
Market Available Room Nights 1,972
7
Area Demand Analysis Fair Share
8
Area Demand Analysis Fair Share
9
Summary of example

• In this case, your hotel is not capturing its
  fair share of the market since its market share
  is falling one and a half percentage points under
  the fair share calculated for it. Market share
  and fair share computations are measures of
  success relative to competition. The absolute
  size of the share may or may not be important,
  but it is useful when measured over time to
  determine trends in market share and the impact
  of various marketing strategies.

10

• What is the difference between Objectives,
  Strategies and Tactics?

11
Objective

• A desired end-state.
• i.e. Increase the restaurants lunch-time meeting
  business.

12
Strategy

• A broad direction for a company to proceed in to
  achieve a goal.
• i.e. Promote and advertise more to small
  businesses in the area.

13
Tactics

• The step-by-step procedures to implement a
  strategy.
• Advertise in newspaper.
• Host open houses.
• Acquire list of businesses.

14
The Mission Statement

• A companys mission is used to ensure unanimity
  of purpose within an organization and also to set
  it apart from other organizations of its type.

15
The Mission Statement (cont.)

• Its a statement of attitude, outlook, and
  orientation rather than details.
• Its a starting point for all marketing plan.
• It dictates all action plans.

16
Criteria of an Effective Mission Statement

• 1. It states what business the company is in,
  or will be in. It goes beyond the specific
  industry and states how we serve our customers.
• 2. It identifies the special competency of the
  firm and how it will be unique in the marketplace.

17
Criteria of an Effective Mission Statement (cont.)

• 3. It identifies the needs of its constituents
  and who they are.
• 4. It identifies the future or long term major
  goal of the company.