Master in Marketing and
Communications Business Model Analysis
Purpose of Institution/Business
Barons Hostel is a family owned business in
the hospitality industry in Nairobi, Kenya. It is in the suburbs of Karen.
Initially, Barons Hostel was providing accommodation to female students from
nearby universities and institutions. This business has been carrying on for 10
years. After market research and a need to rebrand, they are now looking to
change their target market and category of housing to expand in to the hospitality
business. They are to re-open as a Hostel providing accommodation to travelers.
Their target market previously were female
students in nearby universities and institutions. Current market shall be millennial
travelers in need of affordable accommodation traveling through or within the
country. Barons Hostel shall focus on Segmented Marketing approach where we
shall market our products to the already targeted market but with variations in
the product to suite each of the various preferences. We shall also consider Diversify
Marketing where we shall market our individual services with a slightly different
approach to the needs met.
Strategic alliances: Nairobi National
Park, Giraffe Center, Karen Blixen Museum, Elephant Orphanage and Rolf’s
Place. The mentioned are tourist’s attractions located in Barons Hostel
neighboring surroundings. We shall market them in our hostels and guests are
given discount prices to visit each of the above if they book with us in a
group of more than 3 and the above shall market our hostel on their website.
Buyer-Supplier relationships: We maintain
relationships with big organizations such garbage collection and disposal
companies that in turn enable garbage disposal for the entire neighborhood.
We are big on supporting local businesses and acquire necessities such as
milk, eggs and any other farm produce from local farmers who can distribute
their produce in large quantities and consistently. This gives us a relationship
with our neighboring businesses.
Co-opetition: Barons Hostel is big on
preservation of the environment and energy: agreement with nearby businesses
to outsource water from neighbors with boreholes and to invest in solar
energy that can be distributed to the entire neighborhood or to those
interested in acquiring solar power both as businesses and household
Receptionist – the receptionist oversees
receiving of guests and handling bookings made prior to or on arrival.
Accountant – the accountant shall oversee
receiving payments that are made on arrival, handling all cash transactions
as well as updating guest information on payments accessible by the
receptionist who manages check ins and check outs.
Customer Service Desk – the customer
service is there to help guests with any questions they have regarding
booking and accommodation and assist them in any way possible across the
different online platforms. The Customer service desk updates the online
platforms with current news regarding the accommodation and oversees issuing,
designing questionnaires and surveys to the guests, issuing them, compiling
the results and suggesting methods of improvements.
General Manager – the general manager
supervises the staff and assures everything is done on time and to precision.
He assures work flow is current and consistent and handles and troubles or
complaints by the guests when available staff are not able to.
Resources: Furniture in dining, common areas, workspace rooms, setting up of
a bar and restaurant within the property, kitchen appliances, cutlery, computers
for employees, art work, refurbishing and construction of new buildings,
plants, growing of more trees and flowers
Resources: Brand identification, partnerships with neighboring business,
customer and employee database, Websites
Resource: Accountant, receptionist, manager, customer service representative,
cleaners, constructors, gardeners, security, chefs, bar man and
Resources: initial investments, bank loan, investors, insurance, legal licenses,
credit and debit card handlers
What value is delivered to which markets?
is Targeting both male and female travelers looking for affordable
accommodation for their short or long stay. They have a website that is consistently
updated with a gallery and specification of the accommodations available
including the prices, activities and resources at their disposal. The guests
can then book beforehand or choose to pay for the rooms on arrival. The
website indicates which rooms are available and which ones are occupied.
Shared rooms offer
privacy to each guest because the bunk beds are in cubicles with curtains. The
hostel assures high security within the compound and as much as possible
guarantees and reminds guests to keep their valuables secure. We offer in
house storage in form of lockers secured by the receptionist for valuables
such as cameras, laptops, jewelry and any form of expensive possession, which
in turn the guest receives a key to. However, we encourage passports, credit
cards and money to be kept safely by each guest.
respectable of female solo travelers and promote respect among all guests to
each other and their possessions. We offer male and female only rooms for
those not comfortable in open sharing.
in a group of 3 or more enables discounts on certain activities such as game
drives and park tours in Nairobi National Park.
Social Media, Website pop up chats
Assistance to every customer that needs help or has any questions regarding
making a booking, accommodation provided or using the website.
Use of social
media platforms to understand our guests as well as create a Community where
the guests can interact with each other and the Hostel to provide insights,
leave reviews and comments and share experiences in the Hostel.
Service on the website by having a customer create a profile and log in to
their account to have the best filtered results based on their interests and
purpose of stay.
Channels of Communication and
channels: website, mail, phone
Diversified Customer Targets. This shall be acquired by specifically
targeting millennial travelers through social media channels as well as separately
marketing the services Barons Hostel offers (double rooms, shared rooms, male
only and female only rooms) to the market. Every need that shall be met by
both male and female travelers and couples who need accommodation.
(location, target market)
The Hostel is
in the suburb of Karen with tourist attractions in its immediate surroundings
that are frequented by travelers. As our main target is both male and female travelers,
we offer travelers of groups: more than 3, discount prices on park fees and game
drivers through a partnership with the National Parks in the area.
What costs are involved in delivering that
is value driven
renovations, purchase of items needed: furniture, cutlery etc., solar panels,
Costs: maintenance of the hostel, water
scale and scope: economies of scale are achieved by purchasing goods in large
scale from neighboring businesses and farmers to save on costs. Economies of
scope is achieved because all resources in the hostel are shared resources
among every guest which they purchase.
Where are the revenues coming from?
renting, advertising, brokerage fees
you suggest changes to the current business model – what would they be?
The current business model cannot be
achieved immediately. It entails a heavy financial plan and it would be a good
idea to spread it out between a couple of years. I would suggest starting
small. The hostel could first start with a couple of rooms to test the market
and its ideas and if positive results and acquired profits, it could then
expand and have more rooms available.
would you anticipate the effect of the above changes to be? I.e. benefits,
shall reduce the initial costs to be incurred in the Physical and Human
Resources, it shall enable testing of relationships between alliances formed
and shall be able to make changes and adjustments effectively without incurring
a huge loss to the business. It shall also be able to hire qualified staff and
enable training to assure they diligently perform their duties and are
trustworthy. If this succeeds, as they expand, they shall have trained and