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1.0 Introduction
The Ashley Place (Ashley for short) is a 73-unit assisted living community located in Lodi, California, the U.S. it is currently constructed and operated by Blueprint Healthcare Real Estate Co. Ltd. The assisted living community aims to provide high-quality daily care and healthcare services to senior citizens in the U.S. In this report, the marketing plan of promoting Ashley’s daycare and healthcare services will be conducted in details.
Fig 1: The Ashley Place
2.0 Mission, Vision, Values of The Ashley Place
2.1 Mission Statement
The Ashley Place aims at becoming the top-runner in providing high-quality daycare and healthcare services for elderly residents in California.
Mission statement is often a short-term and attainable business goal for a company or an organization. So far, Ashley has already occupied a significant market share in the local daycare-for-the-elderly business. Therefore, the chance for Ashley to take a leading position in the local market is very high. It depends on how The Ashley Place manages to transform its core competency into sustainable competitive advantages in the target market.
2.2 Vision
Vision Statement: “Ideal Township for you to discover”
The Vision statement above reflects the long-term goal of the top management team in converting the assisted community into an ideal township for elderly residents. The emphasis is more on creating a social networking among adult children (45~65), and senior citizens above 65 years old. As compared with other daycare or nursing center, the ultimate goal of Ashley is not just limited in providing daily care or health care for potential and target customers. Instead, The Ashley Place focuses more on building a living community for residents to communicate and interact with one another.
2.3 Values of The Ashley Place
The value proposition of Ashley is to make the residents feel a sense of home and belonging while consuming the daycare and nursing services. This unique value proposition will differentiate Ashley from its potential and major competitors in the target market.
3.0 Overview of Community
Key services of the Community can be described as follows,
Ø 24 hrs per day access to medical personnel: At least a registered nurse or medical professional will be on site 24 hrs per day in case of emergency. Besides, another major job of medical professionals is supervise the daily living activities of residents
Ø The Ashley Place will provide assistance to residents in daily activities such as dressing, bathing, cooking, etc.
Ø Three meals per day in dining area (see figure 2): all residents will enjoy a satisfactory meal in the dinning area. The hygiene of the dinning environment can reach the standard of a 3-star hotel. All the food will be served by The Ashley Place staffs. The recipes will be released one week before.
Source Credit: Blueprint Real Estate Advisor
Fig 2: Dining Area of The Ashley Place
Ø Recreational and Sports area: The elderly can do daily sports after being supervised and guided by the medical staffs. Besides, they can also play recreational games such as board game.
Ø Multimedia and Multipurpose rooms are also available for target customers to watch movies and entertain themselves.
Ø Greenery plants will be also be looked after by The Ashley Place. It will create an environmental-friendly image of the whole area.
4.0 Current Financial Situation
4.1 Current and Projected Balance Sheets
As shown in table, from 2016 to 2017, the EBITDAR (earnings before interests, tax, depreciation, amortization and restructuring) had only increased from $261,152 to $274,629. In other words, the earnings has only increased by 5.16%. Therefore, through implementing this marketing and business plan, it is expected that the EBITDAR can be increased significantly in the near future.
Table 1: Historical Operations of The Ashley Place
Table 2 illustrates a Per forma report of Normalized Occupancy and Expense in a projected fiscal year. Per forma is a Latin word which is often used to project financial performance or results under certain assumptions. The financial data from the table below is under the assumption of normalized occupancy and expense. As shown in 2017, the occupancy rate reaches 92%. It is thus reasonable to estimate that the occupancy rate of a fiscal year could be between 85% and 100%. The per forma occupancy is set conservatively at the bottom of the market range. Besides, the standard private pay-rate is subject to the room-type in the area. So far, the subject property rate of the Ashley Place is well below the target market. Thus, the resident rents will be aligned by increasing 5% according to the market rate. The data will also be $200 per month lower than other major competitors in the region for the conservative purpose. The final projected EBITDAR is about $480,404. Even though the normalized occupancy rate is only 85% as compared to 92% in 2017. The EBITDAR is almost doubled after implementing the marketing plan.
Table 2: Per forma financial report of Normalized Occupancy and Expense
5.0 Demographic Analysis
Demographic analysis is highly important for market segmentation. Through identifying the critical needs and demands of different age group, it can allow The Ashley Place to capture the perceived-value of target customers so as to enhance the overall customer satisfaction. The overall demographic summary can be viewed in the table 3 below.
Table 3: Demographic information of primary target customers of The Ashley Place
Source Credit: Blueprint
First, according to the geographic information, target customers of The Ashley Place can be divided into two groups as follows,
Ø Group 1 (5-miles within Lodi): the marketing resources will be invested relatively in this region because target customers are familiar with the local environment and community culture. It is also much easier for the marketers to reach the potential customers.
Ø Group 2 (Stockton city and the whole state of California): the customers of Stockton city and the entire state California can be viewed as secondary target customers. It is because more resources have to be invested to raise the brand awareness among potential customers given that there are many successful competitors in the region. The cost of customers to switch to competitors’ service is not high. It also gives customers a high bargaining power.
In terms of age groups, it can be observed that adult children, 65+ population, 75+ population and 85+ population are the target customers of Ashley.
In Lodi, the number of adult children is about 24% of the total population. But from 2017 to 2022, the total number of adult children is expected to decline by 0.2%. The total number of 65+ population and 75+ population will increase by 2.7% and 1.8% respectively. The annual growth rate of the 85+ population will also decrease by 0.3% during this period. However, it should be noticed that the percentage of adult children (aged from 45 to 65) is the highest among all age groups. Besides, even though the annual growth of adult children and 85+ population in Stockton and the state of California are predicted to increase slightly. The growth rate is still much slower than the other two age groups. But it should be noticed that the population size of adult children is still the largest in all the three above-mentioned areas. Therefore, it could be concluded that the primary target customers are adult children group who live in Lodi. Marketers should invest the marketing resources to research primary target customers through market communication mix such as direct marketing and social media marketing.
6.0 Customer Profile
The detailed customer profile can be viewed in Table 4 below.
Table 4: Customer Profile of The Ashley Place
Adult Children |
65~74 yrs old |
75~84 yrs old |
85 and above |
|
Description |
Ø Just Retire from job positions Ø Looking for attractive and high-quality retirement activities, health care services and lifestyle |
Ø Get used to elderly life Ø Need daycare and health service Ø Require social networking and community services |
Ø Weak physical status Ø Need daycare and health care services very much
|
Ø Very weak physical status Ø Often cannot sustain daily activities by their own Ø Extremely need daycare and health services |
What’s most important to them |
Ø Entertainment facilities Ø Dining environment Ø High-quality and professional health care service Ø Sense of community and belonging |
Ø Daycare and health care services Ø Professional guidance and supervision in daily activities Ø Entertainment facilities and activities |
Ø Daycare and health care services Ø Nursing services Ø On-site medical staffs Ø Entertainment facilities |
Ø Assistance in daily activities like dressing and bathing Ø Professional and high-quality medical services |
Annual income in 2020 |
$76,626 |
$60,298 |
N.A. |
N.A |
Source Credit: Self-created
From the demographic analysis, it can be observed that adult children and elderly residents aged from 65~74 years old are major target customers. It is largely because both age groups represent a significant portion of the total population in Lodi, Stockton, and California state. Besides, the annual income of adult children and 65+ population are both higher than the average income of the whole population in the target market. Thus, in order to enhance the overall sales revenue, it is important to provide satisfying services to address the needs and demands of the two groups. Adult children are residents who might just retire from their work. As compared with other age groups, adult children do not require too much on daycare services. They can also do basic sports without the instruction or supervision of medical staffs. Instead, they are demanding a promising and comfortable living environment such as dining area.
7.0 Competitive Analysis
There are mainly two major categories in the daycare services for elderly citizens, namely assisted living (AL) and memory care (MC). However, The Ashley Place is a 73-unit assisted living community. It falls in the category of AL. Therefore, competitors from MC will not be included in this competitive analysis. The five major operators in Stockton (Lodi particularly) can be viewed in the table 5 below. As compared with other major competitors, it seems that the age of Ashley’s buildings are relatively old. Besides, except Brookdale Kettleman Lane, most of Ashley’s competitors have similar or even more total open spaces. It shows that potential and target customers of Ashley can easily switch to other brands. The market competition is very fierce.
Table 5: Five major AL service operators in Stockton, CA
Source credit: Blueprint
The top four operators in terms of real estate properties, units and company share scan be viewed in Table 6 below. All the operators have owned a significant portion of the total comp shares. In other words, these operators can make a significant influence on key business decisions.
Table 6: Top Four Operators
8.0 SWOT
Table 7: SWOT analysis
|
Strength: Ø Professional daycare and health care services Ø 24 hrs on-site nurses or doctors Ø High-quality dining and living environment Ø Professional supervision of residents’ daily activities Ø Assistance for bathing, dressing and other daily activities |
Weakness: Ø Old buildings (41 yrs old) Ø High cost in recruiting medical professionals Ø Poor market segmentation (Cannot identify the different needs among adult children, 65+population, 75+population, etc) |
|
Opportunities Ø Partnership with other health-care service providers Ø Enhance social networking and township of residents Ø Build a sense of community, and belonging |
Threats Ø Vigorous competition in the target market Ø Strong customers’ bargaining power and Low cost of switching to other brands Ø Price competition |
Among all the strength, it can be observed that the 24hrs on-site medical staffs are a very important competitive advantage of the Ashley Place. It can provide a timely and professional medical services to target residents during emergency. The Ashley Place also provides professional medical supervision when residents are doing sports or other daily activities.
However, one weakness is that the buildings of Ashley are relatively old. It is important to refurnish the buildings or renovate important facilities if The Ashley Place wants to attract more adult children. Besides, at present, the marketing department cannot effectively identify the different needs of each demographic group. Without capturing and delivering the perceived value of target customers, it will not be easy for Ashley to compete with other major competitors in the market.
In terms of opportunities, it is advisable for Ashley to look for business partnership with health-service providers, clinics or hospitals. It will save cost for recruiting professional medical staffs significantly. Besides, Ashley should continue to enhance the social networking so as to achieve the vision statement, that is, to build an ideal township for all target residents.
But when it comes to threats, the assisted living service market is highly competitive. As shown in table, there are many substitutes for Ashley’s service. Without developing competitive advantages, Ashley may end up suffering from a price competition. In other words, major competitors in the market may compete to lower the price to gain more market share.