Calculator Allowed: Yes



Transcription of this question: 4.La Bonita (LB)La Bonita (LB) is a beach hotel owned by Felix and Rose Sanchez. Its current target marketis families seeking beach holidays. LB offers high-quality service. Customers do not pay inadvance and pay in full on departure. LB is located near a capital city.As there are no hotel training schools locally, Felix provides on the job training to all newrecruits. A recent survey by LB to assess brand loyalty found that existing customers remainloyal because:• they appreciate not having to pay in advance, as required at other local hotelsemployees are polite and helpful and particularly good with children• the services provided are perceived as very good value for money.However, many customers have commented that the hotel needs to upgrade its facilities.In winter, LB has a very low capacity utilization and monthly cash flows are negative. LBgets through these months using bank overdrafts while continuing to pay its suppliers in cashto get generous discounts. Felix is concerned that the cash-flow situation is unsustainableand could get worse because the hotel facilities need upgrading. He proposes that LB raisesadditional finance and finds ways of reducing cash outflows in the winter (proposal 1).Rose believes that the cash-flow problem is mainly due to low capacity utilization in thewinter months. She wants to diversify and attract a new segment for the winter: businesscustomers. However, this would involve significant expenditure, including upgrading andadding new facilities to the hotel (proposal 2).(a)(b)(c)(d)Define the term brand loyalty.Explain two advantages for LB of using on the job training.Explain the importance to LB of two elements of the extended marketing mix.Discuss whether LB should implement proposal 1 or proposal 2.[2][10]

Leave a Reply