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Magnolia Inn

Market Analysis Summary

The Magnolia Inn’s target market strategy is based on becoming a destination choice for people in the greater San Francisco Bay region who are looking for a place to relax and recharge. The target markets that we are going to pursue are people looking for a vacation destination, Honeymooners, and drop-in customers. We envision many professional married and single customers making the short drive to Half Moon Bay from the greater Bay area to relax and enjoy the beautiful California coast. Our setting and facility is a natural for people looking for a place to spend their honeymoon. With an eye catching sign on highway 101 we will bring in drop-in business. The Magnolia would like to see a 10% increase of potential customers on a yearly basis.

4.1 Market Segmentation

The profile of our customer consists of the following geographic and demographic information.


  • Our immediate geographic market is the San Francisco Bay area with a population of over one million people.
  • A 200-mile geographic area would want to use the kind of services we offer.
  • The total target area population is estimated at two million people.


  • Male and female.
  • Married and single.
  • Combined annual income in excess of $75,000.
  • Age range of 25 to 65 years. with a median age of 40.
  • Work in a professional business setting.
Bed and breakfast inn business plan, market analysis summary chart image

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Vacationers 10% 800,000 880,000 968,000 1,064,800 1,171,280 10.00%
Honeymooners 10% 5,000 5,500 6,050 6,655 7,321 10.00%
Drop-ins 10% 1,000 1,100 1,210 1,331 1,464 10.00%
Total 10.00% 806,000 886,600 975,260 1,072,786 1,180,065 10.00%

4.2 Target Market Segment Strategy

Our target market strategy is based on becoming a destination for people who are looking to get away for a few days, on the beautiful California coast. Our marketing strategy is based on superior performance in the following areas:

  • Quality facilities.
  • Beautiful location.
  • Customer service.

The target markets are separated into three segments; “Vacationers,” “Honeymooners,” and “Drop-ins.” The primary marketing opportunity is selling to these accessible target market segments that focuses on vacation and recreational needs.

The most dominant segment of the three is comprised of the San Francisco Bay and surrounding area. Half Moon Bay is approximately a 45 minute drive for Bay area residents. Half Moon Bay can seem like a different world and this is attractive for those people who have the need to get away but do not have the time to go far.

Because of the beauty and location of our Inn, we will be a very attractive choice for people looking for a honeymoon location.

When rooms are available we will welcome the drop-in customer who is looking for a place to stay for the night. Our sign can be seen from highway 101 and we expect to get quite a few drop-ins.

4.3 Service Business Analysis

The Magnolia Inn is a seven room facility that provides over night lodging and breakfast in a luxurious setting on the beautiful California Coast. There are several other Inns in the area as well as motels. Most people who need lodging in the area make reservations in advance to assure room availability. Two other Bed and Breakfast Inns, the Riptide Inn, and the Bayshore Inn are our main competitors.

4.3.1 Competition and Buying Patterns

Typically in this industry the consumer is someone who is not just looking for a room to sleep in, but a facility that provides a homespun touch. A place that is unique and offers more personalized customer service. Because each Inn is offering something unique to the guest, customer service and quality of the facilities are at the forefront of importance. Location is also important and those Inns with an ocean view have an advantage, but with the limited number of rooms at Inns in the area there are enough customers to match the supply. The Magnolia will not be competing on price as the price of a room is on the high end of the scale. Guests at the Magnolia are paying for more than just a room, they are paying for a oasis away from their hectic world.