Case Study: Kerikeri Lodge
Joanne Hart - #7
Facts (Brief Summary)
Kerikeri Lodge is a getaway adventure playground designed specifically to appeal to the very wealthy. It is located in the South Island region of New Zealand. The facility boasts a beautifully architected lodge, with spacious rooms with large windows to showcase the spectacular views of the paradise region. It is located on 28,000 hectares of original farmland, which has been converted into a game reserve with the introduction of deer, elk, chamois, and wapiti. Guests are provided with privacy and security, and very upscale treatment and service levels. Activities include safari shooting, photographic safaris, horse-trekking, golfing, helicopter rides, and nature walks. Gerard Olde-Olthof is one of the founders and is currently the managing director of Kerikeri Lodge. Gerard was a New Zealand Department of Conservation investigator when he met up with the son of the former Indonesian president. They came up with the idea to purchase a high-country station and covert it into a private resort for the very wealthy. The facility was designed specifically to please its targeted affluent clientele, and provide highly valued privacy and security. The company is still fairly new, but is experiencing a constant stream of customers.
Kerikeri Lodge is an upscale vacation destination. The target audience is very affluent customers to whom price is not the determining factor for comparison or choice. The target market includes those customers to whom privacy, security, and extremely high customer care are most important. Kerikeri Lodge currently relies on word of mouth from past clients to continue to provide an ongoing stream of affluent customers. They also rely on publicity and public relations to reach their targeted customers. Kerikeri Lodge is a relatively new vacation destination and this strategy has been successful so far in bringing in sufficient customers.
Kerikeri Lodge could alter its marketing strategy to include a more middle class group of clients. Though this would target a larger potential customer base, they would likely be less willing to pay the current level of prices, and the current facilities, accommodations, and activities are designed specifically around a wealthier clientele. The amount of money these customers would be willing to pay would likely not bring in enough to make the facility profitable with the current capacity of only eight rooms. Going down this path would require major facility changes, at great expense, and a total change in company vision. A more reasonable alternative is to continue to pursue its upscale target market. Although, Kerikeri Lodge has experienced success so far, it should not take its accomplishment for granted without taking measures to ensure continued profitability and to develop a stronger reputation. It needs to take a proactive stance to ensure it continues to live up to the very high expectation of its customer. It also should not rely solely on the simple word of mouth and public relations method for reaching its target customers.
This chart highlights the strengths, weaknesses, opportunities, and threats for Kerikeri Lodge.
Michael Porters Five Competitive Forces
The Threat of New Entrants
There is a relatively low threat of equivalent new entrants into the business within New Zealand. The threat is higher on world-wide scale. The capital investment involved is substantial. Building a brand name and reputation to compete with established firms does take some effort. The particular market is a relatively small niche within the larger vacation, travel and leisure industry. The Intensity of Rivalry
The existing market is competitive, but not extremely so. The...