Introduction

          Recreation is an important need of most individuals at present. With all the pressure acquired from work, a way to relax and relieve the stress is indeed necessary. Going to beaches and resorts is one good way to relax. Canyon Ranch, however, is not just any place for vacation. What makes this place different from others is its objective that is not only focused on bringing relaxation but also quality and healthiness in each of its clients. A vacation spot known for its health spas, Canyon Ranch has been considered a pioneer for setting the standard for health resorts since 1979. Currently, Canyon Ranch offers both health resorts and spaclubs in various places within the United States. In addition, Canyon Ranch enables its clients to experience quality and healthy living through its various amenities including fitness and outdoor sports, spa services as well as medical and nutritional consultations. Though Canyon Ranch has already been known for its standard and high class services and features, competition and change in business should still be considered. Hence, in spite of the success of Canyon Ranch as a health resort, this case analysis will concentrate on assessing the business’ abilities and areas for improvement. The main goal of this analysis is to suggest useful alternatives to improve the services offered by the resort.

Part 1: SITUATION ANALYSIS

A. Analysis of the Firm

Mission

          The mission of Canyon Ranch lies on the resort’s purpose to inspire both its clients and staff to commit to healthy and quality living. In addition, it is also the mission of Canyon Ranch to turn the hopes and intentions of the clients into enjoyment and fulfillment.

Root Marketing Strategy

          Canyon Ranch is a firm that does not rely on heavy marketing or advertising strategy. The company rather focuses itself on affiliations with dependable partners and on direct communication. Canyon Ranch is commonly referred to as a word of mouth referral business. Hence, the root marketing strategy of the firm is dependent on satisfied customers bringing other clients who have never been to Canyon Ranch before.

Marketing Mix

          Product. The product and services offered by Canyon Ranch is mainly divided into two categories. The first one is the Destination resort, which actually function as the main foundation of the company. These destination resorts are further subdivided into three departments, which include Health and Healing, Hotel and Spa. In these resorts, customers can avail numerous services such as fitness classes, lectures and outdoor activities. The other main product category of Canyon Ranch is the SpaClub. Although this category complements the destination resorts, it focuses on providing fitness, salon and spa services. This product line also lacks the Health and Healing aspect.

          Price. Compared to other similar businesses, Canyon Ranch offers price rates that are about 25 to 30 percent higher. Guests who wish to stay for three to four nights would typically spend two thousand to two thousand five hundred dollars per stay. Loyal customers are given the option of availing the benefits of centennial membership, which offers significant discounts and perks. With this feature, guests may acquire a 50% discount for room rates as well as a 10% discount on services. Place. The products and services of Canyon Ranch are distributed to different states in the US including Arizona, Massachusetts, Las Vegas and Florida. Hence, interested customers within the country can easily access the resort and spa by going to the company branch near them. In addition, the company is accessible online. Thus, the company is able to distribute its products and services to foreign clients through online marketing.

          Promotion. Rather than allotting substantial finances for advertising, Canyon Ranch depends on customer referral and word of mouth. Moreover, the company also has its own website, which describes all the products and services offered by the firm.

Segmentation Strategy

          Over the years of service, Canyon Ranch was able to accumulate knowledge about its clients. About 75% of its customer base is represented by women. Though this market segment represents the majority, the male population is recognized as a growing segment. This segmentation growth is attributed to the increasing interest of men towards health and fitness as well as the aging of the baby boomer generation.

B. SWOT Analysis

Micro-environmental factors (Strengths and Weaknesses)

          Canyon Ranch has a number of strengths. One of which is its undisputed position as a leader in the luxury segment of the Spa industry. It offers an unparalleled line of products and services as well as an incomparable service for its customers. The company practices of Canyon Ranch are also considered as its strengths. As the company has strong regards for its workforce, Canyon Ranch prioritizes its human resource and ensures that all of its employees fit in to the needs and standards of the company. In addition, the company offers a wide array of products and services that set the company apart from other similar businesses. Canyon Ranch also offers a health and healing component that is different from all other settings. All of these products and services are housed within one location, making it comfortable and accessible for customers. The company also has certain weaknesses. For instance, Canyon Ranch did not have any form of recognition program for repeat customers. In addition, the company does not spend much for advertising, which is currently important considering the competition within the industry.

Macro-environmental factors (Opportunity and Threats)

          Canyon Ranch has opportunities that can be used in order to improve its operations. For instance, it has its own company website that can be improved for enhanced advertising and customer service. A more interactive website for example, may be used by the firm. The company also has the finances to employ other means of promoting its products and services. Though some of the operations of the company apply computerization technology, Canyon Ranch may use this innovation to enhance its customer services as well as the company operations. Competition is the most direct threat of the company. As the aim of the company is to provide relaxation and quality living, things or activities that can provide the same benefit are considered a direct competitor.

C. Analysis of Industry/ Demand and Competition

Competitors: Strengths and Weaknesses

          Canyon Ranch has a number of direct competitors, and in fact, this aspect is the company’s major threat. Most of the firm’s competitors have either a very high spa or very high health and healing component. Though these components serve as the competitors’ main strength, they are particularly weak in terms of variety. Spas are generally aligning themselves to the medical field; hence the services of experts and professionals such as dermatologists, plastic surgeons, nutritionists and physical therapists are highly accessible to these places. The convergence of medicine and spa services is considered a potential threat to Canyon Ranch’s uniqueness. Other large luxury destination resorts are also offering similar features and services, making them as the firm’s direct competitor as well. In addition, a few hospitals are also adding spa and wellness centers to the institution through the expertise of a nutritionist.

Industry Growth

          According to reports and statistical findings, the spa industry has been growing in terms of sales. In the report made by Price Waterhouse Coopers (2001), approximately 57 million dollars were obtained in 1997 out of the increasing spa visits. This figure grew to 155.8 million in 2001. The growth in the spa industry was said to be attributed to the changing consumer trends. Patrons of spas nowadays are no longer after the spa experience per se, but also on achieving quality and healthier living. From the constant growth of the industry, demand also increases as well as the competition. Thus, the employment of various features and amenities that will enhance product lines and services is essential.

PART 2: IDENTIFICATION OF PROBLEM OR OPPORTUNITY

          From this initial assessment, there are several problems identified within the firm. One is the need of Canyon Ranch to overcome the growing competition within the industry. The company must be able to employ ways on how to maintain its competitive advantages and its fundamental characteristics. In spite of these problems, the company also has various opportunities which can help in overcoming these challenges. For instance, Canyon Ranch has the opportunity to apply new strategies that will improve the performance of its existing business departments. Moreover, as the company has a strong commitment to its clientele, the firm may choose to employ new technologies or methods that will optimize this objective. Being unparalleled to the provision of excellent customer service, Canyon Ranch may focus on this aspect to overcome competition and maintain its business status within the industry. The company may also use other techniques or information technologies that will improve its advertising efforts. This opportunity is significant particularly in generating new and regular customer base.

PART 3: DEVELOPMENT OF ALTERNATIVES

          As the main problem of Canyon Ranch is on the enhancement of customer service and advertising strategies, the suggested alternatives are concentrated on these two aspects:

Alternative 1: Customer Relationship Management (CRM)

          The strong competition within the spa industry requires businesses to exert effort in establishing a stronger hold on its market. The spa businesses should then integrate new business mechanisms or practices that are customer-oriented. One example of doing this alternative is through the employment of customer relationship management (CRM). The approach on CRM covers all business processes that an organization employs so as to determine, select, obtain, enhance and retain its customers (Zabin, 2004). CRM is regarded as the integration of business processes, technological solutions and advanced analysis, which enables companies to understand clients from a multifaceted perspective (Cohen and Moore, 2000; Jarre, 2000). Through this understanding, companies such as Canyon Ranch will be able to establish deeper and more profitable customer relations.

Alternative 2: Integrated Marketing Communication (IMC) Strategy

          The advertising and promotional strategies of Canyon Ranch are also in need of modifications and enhancement. This may be achieved by combining different means of communication. For this purpose, Canyon Ranch may employ the Integrated Marketing Communication (IMC) strategy. Through IMC, interactivity may be acquired, which in turn can enable the counter flow of information. In this case, users are able to participate in modifying the type and content of information they obtain at real time (Edell and Keller, 1989 and 1993). While traditional means of marketing like advertising is one way in nature, the integrated approach permits users to do several functions, including receiving and altering information or images, forward inquiries, respond to these questions, and the most important of all, make purchases (Moore and Thorson, 1996; Moore, 1993). One important aspect of this integrated approach is the resulting effect of a more enhanced means of brand building. Using this strategy, Canyon Ranch may maximize the use of mass media, direct and online marketing.

PART 4: EVALUATION OF ALTERNATIVES

          Alternative 1: The employment of CRM in Canyon Ranch will enable the firm to address the different needs of the customers in the fastest and most effective manner. In addition, CRM can help the company evaluate its customers, which in turn will aid Canyon Ranch in developing features, products or services that will suit clients’ preferences. However, the application of CRM in the operations may also be disadvantageous as the new system should complement existing systems used by the company. Moreover, several factors must be present in order to make CRM work for Canyon Ranch. Client-company intimacy and substantial customer knowledge should be present and available for CRM efficacy.

          Alternative 2: With Canyon Ranch’s current problem on marketing, IMC will definitely help the firm maximize its available communication means (e.g. direct selling, online marketing, media advertising). The combined marketing efforts will help the company increase its market coverage, which in turn can lead to enhanced customer patronage, higher sales growth and increased brand loyalty. Nonetheless, IMC also needs specific expertise so as to effectively combine its available communication strategies or techniques. Below is a table summarizing the advantages and disadvantages of each alternative:

PART 5: SELECTION & IMPLEMENTATION

          Based on the needs of the company as well as its current status, the application of the Integrated Marketing Communication strategy may be the most useful and beneficial for Canyon Ranch. One of the reasons is that although the company needs to have a stronger hold on its customers due to business competition, the company presently has available means of enhancing customer relations. Though this is still necessary, it is not a company problem that needs immediate action. Currently, the company has no available system that integrates its marketing channels. Hence, the IMC should be employed considering that Canyon Ranch is also in need of a strategy that will promote brand loyalty. The firm presently uses direct selling and online marketing as communication approaches. The IMC will then enable Canyon Ranch to integrate these two methods as well as add in other communication approaches that will enhance both customer relations and company growth. In addition, combined marketing strategies will also enable the company to reach a wider market scope. In order to implement this alternative, the company should study its available communication means well. A consultant may be considered in terms of creating a good IMC approach using these communication outlets. The operations of the company, its goals and present marketing approaches should be identified so as to integrate them well into the IMC strategy. If this alternative will succeed, Canyon Ranch will not only be able to combine its marketing channels, but will also achieve broader market coverage and increased product sales.

References:

Canyon Ranch (2005). Available at: http://www.canyonranch.com Accessed: April 23, 2005.

Cohen, S. and Moore, J. (2002). Today’s Buzzword: CRM. Public Management, 82(4), 10.

Edell, J. A. and Keller, K. L. (1989). The Information processing of coordinated media campaigns.           Journal of Marketing Research, 26(2), 149-163.

Edell, J. A. and Keller. K. L. (1993). Analyzing media interactions: Print reinforcement of television           advertising campaigns (Working Paper). Durham, NC: Fuqua School of Business, Duke           University.

Jarre, P. (2000). e-CRM in Financial Services. London: Informa Publishing Group Ltd.

Moore, J. (1993). Building brands across markets: Cultural differences in brand relationships within the           European Community. In D. Aaker & A. Biel (Eds.), Brand equity and advertising. Hillsdale, NJ:           Lawrence Erlbaum Associates.

Moore, J. and Thorson, E. (1996). Integrated Communication: Synergy of Persuasive. Mahwah, NJ:           Lawrence Erlbaum Associates.

Price Waterhouse Coopers (2001). The International SPA Association’s 2000 SPA Industry Study, 29.

Zabin, J. (2004, September). The Next Generation. Direct.