Marketing and economic strategy for Punta Cana resort development in Dominican Republic

Marketing Analysis

Punta Cana Resort and Club in Dominican Republic

Importance of Tourism in the Area

On the mention of tourism and tourist destinations, one is always tempted to consider the Caribbean region. On of the most lucrative and attractive places in this region is the Dominican Republic. This is a country that relies on tourism to help propel its economy since it is the largest foreign money earner and many other internal industries rely on it to continue in their operations. The proximity of the Dominican Republic to the North American market makes it sustainable for many industries within the country apart from just the tourism sector. The thriving tourism sector is so significant to the nation that there is an estimated 800 miles of coast line dedicated to the tourism industry. Apart from the large dedicated shore line, the warm climate and the white sand beaches keeps attracting tourists to the region from allover the world.

The tourism industry is very central in the economy of the country, for instance the number of tourists that visited the country in 2005 was over 3.6 million and the tourism sector accounted for 7% of the GDP as well as 35% of al the exports that came from the country (Embassy of the Dominican Republic in the U.S.A., 2012). With the knowledge of the centrality of the tourism in the republic, the government has strived to uphold the sector by promoting several destinations there in like the San Pedro and La Romana, Punta Cana, Bavaro and Macao, Samana, Cabrera, Puerto Plata, Cibao and seeral other widely known tourists destinations.

Nature Of Business

It is a reality that the economy of Dominican Republic (DR) is highly volatile, this follows the observation of the three major economic crisis like that of 1980s and that of 1990, as well as the most recent banking crisis of 2003 to 2004. these are the major economic events that triggered devaluation of the currency, inflation, lower income levels, unemployment and generally rising poverty levels. Prior to 2003, the country was well towards the recovery trend until the 2003 bailout that was handed to the second largest private bank in the country. It is worth noting that before this bailout, the inflation was in single digits and the GDP grew 74% between 1992 to 2002. Due to the bailout, the economy of the economy shrank by 0.4% in 2003 and the inflation went up to 42.7% (Hanke & Steve, 2004).

It is however, worth noting that the economy is now well towards the recovery with the inflation rate stabilizing and the GDP growth rate has been experienced again, though with some skepticism, the investors are now coming back in significant numbers again.

The nature of business in the country over the last four decades has greatly shifted from agriculture and moved towards manufacturing, contraction as well as the FTZ or Free Trading Zone. The dominant business share is however still held by the service industry with tourism being the main service that is provided. For long, the GDP growth has been largely associated with the outstanding contribution from some four major industries namely the telecommunication, FTZ, financial service and most significantly the tourism sector. The business environment in the country is such that it is dominated by the large firms within the leading sectors with an outstanding 2/3 majority employed in the economy are within the firms that have less than twenty employees.

It is also worth noting that the DR has been actively pursuing the export promotion particularly through their FTZ with the export of goods and services almost doubling between 1993 at $4.1 billion to $8.2 billion in 2004 with a complementing rise in the imports from $5.5 billion to $9 billion within the period mentioned above. The majority of the trade that DR engages in is with the U.S.A. since 82% of exports going to the U.S.A. despite the bilateral trade agreements with some states like Spain. DR also stands out to be a giant exporter of tobacco, sugar, cocoa, vegetables, coffee and fruits. This has however decreased and the shift has been towards the labor intensive products like textile within its FTZ (Mongabay, 2012).

Current Situation

The republic, just like many others across the globe had its economy shaken by the recession and before that was the Hurricane Dean that saw the country losing an equivalent of 20% of the GDP in 2007. The DR has however recovered significantly in 2010 to 2011 and is now stable again (World Fact Book, 2012).

With the tourism sector strongly dominating the economy of the DR, investors interested in other areas are weary due to the fact that if there could be any destabilization in the tourism industry, then the effects will affect even the other industries in the country and the entire country will be badly affected in terms of the economy.

There are some major steps and policies that have been put in place in order to ensure the economy of the country runs smoothly. Some are the significant tariff reform that saw the slashing of several tariffs by half and doing away with the off peaks. The other is the foreign investment law that opened all the sectors of the economy to foreign investment which saw the emerging of a private airport. Removal of restrictions on foreign exchange, technology transfer and ownership share is yet another step. There was also the establishment of the Center for Export and Promotion of Investment as a one stop shop for investors. The DR-CAFTA Free Trade Agreement that was signed with the U.S.A. And Central America and the other CARICOM FTA that was made with 15 Caribbean countries among other agreements was also geared towards strengthening the foreign investments within the country.

Target Markets

Apart from the obvious foreign markets that are targeted as mentioned before from the U.S.A. And the Central America as well as other Spanish speaking regions, the DR also targets highly the internal or local tourists. The relatively vast population has seen the rise of a middle class that has driven the local demand for the tourism services. There is also the presence of the foreign investors that creates another special kind of demand for the tourism sector.

MARKET SEGMENTS

There is a wide variety of tourist that visit the DR. acceding to Baruch Barera et.al., (2007), the DR hosts 96.3% of the tourists coming in for vacations, 2% of the tourists arriving in the country are on business travels and 1.2% on other purposes. This indicates the variety in the market segments that DR has and the apparent dominance of the leisure tourists.

Goals, missions and objectives of Punta Cana Resort and Club

This is known to be the leading hotel within the Dominican Republic. It is situated in Punta Cana just about ten minutes derive from the Punta Cana International Airport.

The goal of the resort is to offer the ultimate luxury, service as well as adventure to the people visiting DR. This they strive to achieve through the availing of the best services and the decor within their rooms and premises that are designed to satisfy even the most discriminate client who visits the place (Punta Cana Resort and Club, 2012).

Marketing Mix (four P's) of Punta Cana Resort & club

The four Ps marketing mix essential refers to the Product, Price, Place and Promotion. These are the foundations that enable any business t be able to cut out a market niche for itself and make the business stable and prosperous.

The product in the context of the resort here are the luxurious rooms that it has, the executive spa, the four residential communities, a full time service marina, the nine restaurants within its compound, a shopping village integrated, two golf courses each with 18 holes are the vast range of products that makes the resort to be above the others in the competitive market.

The price of the resort is also considered to be friendly despite the executive and variety of provisions that it has for the visitors. Taking into account that it is situated next to an international airport that provides convenience of traveling, the prices are generally affordable to the visitors hence the average of 75% bookings across the board. It is also worth noting that Punta Cana has various ranges of prices depending on the particular suite one wants and the location. This enables the visitors to make up their minds about the place and price that is most friendly to them (Punta Cana Resort and Club, 2012).

Place is yet another important factor in the market mix, in the case of the Punta Cana Resort & Club, it is essential to recognize the accessibility of the place for the international visitors and the proximity to the airport. This does not tax the tourists much of their time and energy since they just have to drive for ten minutes and they are within the premises. Bearing that it is also located along the beach, it suits the purpose that it is meant to do, which is giving he tourists a relaxation they are after and the luxury. The resort is also endowed with various sporting activities like tennis and fishing as well as the swimming pools for those who would not prefer swimming in the sea. This makes the place and ideal recess point for the tourists above the competitors.

Promotion is yet another significant thing that the resort has managed to effectively achieve. The resort has developed a very elaborate website that displays everything that is available at the hotel. In this age of globalization, many tourists will depart to a destination having known exactly what they are going to face or meet there. The resort has also registered its products and services with various websites that are accommodation oriented and promotion inclined. This makes their product to be accessible by many people around the world who end up using that information to make a decision to spend at the resort during their trips to DR.

It is also essential to note that there is no business that can prosper in the absence of proper customer care, regardless of the class of products that it may have. This resort has strived to ensure that the customer care is one that the visitors are proud of. They have staff that are concerned with each activity and department within the resort, be it swimming, golf, sports and all other departments, one is sure to get assistance appropriately. Further, the hotel provides toll free lines that clients can call in and make reservations or enquiries from the U.S.A. And Canada, this makes it easier for a customer even on transit to make enquiries and get directions

Recommended changes

Despite the fact that the resort has an outstanding performance and provisions, there are bound to be failures in a few areas. For instance their website is quite restrictive in that it doe not give the clients the room to anonymously hand in their complaints or compliments through the website yet, it is the common thing of late to have a blogging spot on each website to receive feedback. The effect of this lack is the dissatisfied clients will go to the advertising websites that the resort contracts and make their grievances known there; hence affecting the attitude of many people who wanted to book in and they go for alternatives instead. The potential clients who browse the website also find it hard to estimate the prices and base their decision to make enquiries on the price range, if a potential client will flip over to the next hotel website and finds the price estimation, they are more likely to call the alternative that the Punta Cana Resort & Club. There should be also video clips included in the website to better elaborate the activities and sports that are available therein.

Reference

Baruch Barera et.al., (2007). Tourism in the Dominican Republic. Retrieved February 25, 2012

from http://www.isc.hbs.edu/pdf/Student_Projects/DominicanRepublic_TourismCluster_2007.pdf

Embassy of the Dominican Republic in the U.S.A., (2012). Tourism Information: Dominican

Republic. Retrieved February 25, 2012 from http://www.domrep.org/tourinfo.html

Hanke, Steve H.(2004). The Dominican Republic: Resolving the Banking Crisis and Restoring Growth. The CATO institute Foreign Policy Briefing. 20 July 2004.

Mongabay, (2012). Dominican republic -- the Economy. Retrieved February 25, 2012 from http://www.mongabay.com/reference/country_studies/dominican-republic/ECONOMY.html

Punta Cana Resort and Club, (2012). Punta Cana Resort & club. The Caribbean's Premier Golf & Beach Resort Destination. Retrieved February 25, 2012 from http://www.puntacana.com/

World Fact Book, (2012). Central America and Caribbean: Dominica. Retrieved February 25,

2012 from https://www.cia.gov/library/publications/the-world-factbook/geos/do.html