Spa Services in Chewton Glen Hotel and Country Club - Case Study Example

Service Marketing 1. Discuss how service characteristics apply to the case. 2. How are these effects being minimized in this industry? There are various characteristics of services which distinguishes it from products. These characteristics of services influence the marketing strategies that companies formulate and are different from the strategies formulated for products (Hogg & Gabbott, 1998). The case is about the spa industry in general and the spa at Chewton Glen Hotel and Country Club in particular. A spa is a service which offers a relaxing and rejuvenating experience to the visitors. There is no product as such and it is just an experience. Hence service characteristics apply to this case. The four important characteristics of services are: Intangibility: The most basic characteristic of service is intangibility. It means that services cannot be touched, felt, seen or tasted in the way products can be done. It is because of the intangible nature of services that it cannot be stored. Intangibility also makes it difficult for customers to judge the quality of the service unless they experience it. It is also difficult to communicate or advertise a service to the customer compared to products. The cost per unit of a service is also difficult to estimate. There is a complex relationship between price and quality. The service of a spa is intangible. Customers cannot see, taste or feel the service unlike products unless they experience it. In order to minimize the effect of intangibility, the spa industry is trying to come up with innovative services to provide a better experience to the guests. On a worldwide basis spa tourism is being promoted actively. The spa service providers are investing heavily on providing services like shiatsu messages which increases the energy flow of the body and calms out the soul, using natural elements to rejuvenate the skin, detoxification programs and so on. The spa industry is segmenting the market to understand the needs of the visitors and accordingly coming out with services to cater to the needs of target segment. The spa industry is minimizing the effect of intangibility by advertising the services and the atmosphere in which the spa can offer such services. This helps the visitors to get some idea regarding the spa which thus reduces intangibility. Heterogeneity: The fact that the quality of services is based on performance and the needs and wants of customers vary gives rise to heterogeneity. Heterogeneity in case of services primarily results from human interactions between the service provider and the visitor. A customer may not be able to articulate what exactly he wants and similarly the service provider may not be able to explain what exactly he is offering. In order to minimize the effect of heterogeneity, the spas are becoming much more focused on what they have to offer. They have catalogues in which the services they plan to offer are well defined along with the price. This helps the visitors to pick up the service according to their need thus minimizing heterogeneity. Simultaneous Production and Consumption: Contrary to products which are first produced and then consumed, services are first sold and then consumed and produced simultaneously. For example, when a customer visits a spa, he first agrees to buy the service and it is only after that he is able to experience the service. It means that the production and consumption of the service takes place in presence of the customer. The satisfaction of the customer is entirely dependent on real time attributes and is highly dependent on what happens while the service is being consumed. In order to reduce the effect of simultaneous production and consumption, the employees in a spa are well trained. They are very well mannered and through their interactions with the visitor makes him feel comfortable and relaxed. Perishability: The nature of services is such that it cannot be stored, saved, returned or resold. In case of products it can be resold or returned to the producer if the customer is unsatisfied with it. However it is not the same in case of services which makes it a highly vulnerable industry. An unsatisfied customer is not likely to return back for the service and moreover spreads negative word of mouth publicity. In order to woo customers to come back to the spa again, the spa owners are coming out with new services like “sleep rooms” which is usually availed by a customer more than once. Some spas are also selling their creams and lotions through high stores which minimize the effect of perishability. (Zeithaml, 2008). 1. Discuss how you would classify the industry sector that The Spa at Chewton Gen Hotel and Country Club operate in. The spa industry can be broadly classified under the hospitality, travel and tourism industry. There are various kinds of spas like club spa, cruise ship spa, day spa, destination spa, medical spa and so on. The spa at Chewton Gen Hotel and Country Club is a hotel/resort spa. Chewton is basically a hotel which was established in 1950 and has a charm, legacy and “Englishness” associated with it. It was in 1990 that it constructed a health club facility at one corner of the hotel. It was regarded as a revolutionary idea at that point of time. Later in 2005, it built a state of the art “treatment and therapy spa and employed well trained therapists and fitness coaches who use the best techniques in order to invigorate the body and mind of the visitors. The spa started with the intension of providing an extra facility for the guests. However with the growth of the industry and a rapid increase in demand of spas, it has been classified as a separate industry. Thus it can be seen that the spa at Chewton Hotel falls under the category of Resort and Hotel and Resort spa. It falls under the category of spa tourism where health and wellness is the driving factor for the tourists. The increasing awareness regarding health and fitness has resulted in the rapid increase of wellness centres, spas and holistic retreats. The spa industry is well established in the US followed by Europe. Europe has around 1400 spas with majority of them located at Germany. It was an industry which was considered to be meant only for the affluent and the elite class. However the spa industry is growing rapidly with people from all walks of life opting for the service provided by the spa. Among the various kind of spas, day spas are the ones which are mainly visited by the customers. Spas are no more an additional facility provided by the hotels. It has become an integral part of the hotels. 2. What are the key strengths of Chewton Glen Hotel, Spa and Country Club? What types of services compete with them? Chewton Glen Hotel Spa and Country Club is one of the oldest hotels of England. It was born in 1950 and is known for its class and legacy. Being in operation for so many years it has been successful in creating a strong brand. It can thus leverage its strong brand image for attracting customers. It is a haven for the visitors and the experience it offers is highly rewarding and rejuvenating. In 2007, the spa at Chewton has been voted “The UK’s Favourite Spa Retreat” by Conde Nast Traveler Magazine. British reviewers like Vincent Crump have rated it as a sumptuous place to visit. It has been described as among the top ten spa retreats by Australian Gourmet Traveler. It has been a proud recipient of many awards like Laurent Perrier Spa Award to “England’s Leading Spa Resort” in 2006. This is a big strength for Chewton and it should leverage on this. Being in existence for such a long time and being very popular among customers, it has deep pockets. Being financially strong it has the capacity to invest more improving its facilities. It has been investing continually in beauty treatments, fitness facilities and therapeutic healing techniques which give it an edge over other spas in its segment. In addition to this the spa at Chewton already has world class facilities like 17 meter long ozone treated swimming pool, aromatherapy saunas, hydrotherapy pools, outdoor whirlpools, relaxation room, treatment rooms, Linda Meredith skin care, gymnasium etc. These facilities need significant investment and since Chewton has already made these investments, it is the time to start earning profits from the facilities. There are not many competitors of the services provided by a spa since the concept of spa is in the nascent stages in most part of the world. The services provided in a spa are mainly popular in America and Europe. It has started gaining popularity in other nations in the last few decades. There is competition among various spa service providers but in terms of substitutes there are very few competitors. The spa industry faces competition from the tourism sector itself. Customers might prefer travelling to new destinations within and outside their country. The number of foreign tourists has increased significantly because of easy accessibility and higher standards of living. Tourism industry is focusing on eco tourism which allows the customer to be completely with nature without causing any kind of harm to nature. It is a new concept and is fast catching up since there is an increasing awareness among everyone for saving and conserving nature. Availing a service at a spa is expensive. Customers instead of spending that amount in a spa may spend it in traveling to low cost foreign destinations like India. The idea of visiting a spa is to rejuvenate the mind and the body. Traveling to new destinations is also a form of rejuvenating oneself. A service like luxury cruises, for example star cruise where the customers can travel to exotic destinations in a ship might act as a potential competitor. Hence the spa industry faces competition from tourism services. Spa industry also faces competition from the entertainment sector like theme parks, water parks, amusement parks, movie industry etc. Nowadays it is a trend to relax by watching a movie. High quality home theatre systems, DVD players are available in the market at affordable prices. A customer may feel that instead of buying a spa service, it would be better to invest in HI-FI systems because these gadgets also provide a source of relaxation after a heavy days work. Theme parks like Disneyworld can be a competitor for the spa industry. It may also face competition from local salons, massage parlors and fitness clubs because the price charged by them is much less compared to a spa. The local salons or massage parlors may improve their services in order to attract more customers. Although the services provided by them may not be at par with those provided in a spa, yet the price factor may motivate a customer to visit these places other than spa. 3. What brand extensions would Chewton Glen Hotel Spa and Country Club consider in their portfolio? Brand extension means leveraging the existing brand image to add new products in the same or different category. Brand extension is an important and necessary strategy for the survival of the brand. A brand should make a single promise to the target segment which can be expressed or enforced through different products. For example, Palmolive as a brand makes one promise which is based on softness and it has extended its brand through different products like hand soap, shaving cream, shampoo, dishwashing liquid etc (Kapferer, p.296). A brand can be extended through a single brand name, group brand name or company brand name. The most important reason for extending a brand is to increase brand equity and capitalize on the existing brand awareness. It helps in creating an excitement among the target group, can create competitive advantage and create and meet new demand. Brand extensions can follow a logical extension of the existing brand or it may be a complete change. For example Gucci’s extension from high end fashion clothing to shoes and cosmetics was a logical extension. Similarly Hugo Boss and Armani extended their brand from high priced brands to mid priced brands by offering products at a lower price to target a new segment. Brand extensions can occur anywhere across the brand hierarchy but the important point is what kind of extensions would be most sensible for the brand (Elliot & Percy, 2007. P.191). Extension can be done though various ways as shown below: [Source: Anandan] The Chewton Glen Hotel, Spa and Country Resort has undertaken various brand extensions since it came into existence in 1950. It started as a hotel and went ahead to extend its brand by adding new products with the existing brand name. The strategy that they used was brand extension. From hotels, it moved to health club facilities which could be used by the guests and other members to keep them fit. It then ventured into opening a state-of-the-art spa facility in partnership with Moulton & Brown which is a famous luxury brand. The spa like the brand image of the hotel exuded class and was meant for the premium segment. It had highly trained fitness trainers and therapists and was loaded with all modern facilities to provide a highly rewarding experience to the guests. As a brand extension, Chewton can try to tap a new segment which is price conscious. It can come up with mid priced services for its hotels and spas. It should use multi branding strategy where it can use a new brand name for the same category. This brand name would be more symbolic of mid price services. However the new brand should have the name Chewton in it because it would give a sense of pride for the price conscious customers to be associated with the brand. It can use a new brand name like Chewton Platinum, Chewton Gold and Chewton Silver for attracting different segments. This would also help the hotel to maintain its premium image among the elite class. Chewton can also use a brand extension strategy to enter new product categories using the existing brand name. The name Chewton is associated with its charm, legacy and “Englishness”. Chewton should take advantage of this image to enter into new categories like airline industry or wine industry. In both the cases, it should be based on the current brand image and should exude class, legacy and “Englishness”. It should have the traditional feel and should use colors and ambience that matches with the existing brand. For example the interiors of the airlines can be designed in a way that is at par with the existing brand. In case of wine, the packaging should be done as per the existing brand. It can also use line extension strategies which mean using the existing brand name in the same product category. It can do so by entering into health care spas. Currently Chewton does not have any health spas. Health spas are spas like dental spas, kidney spas, gyno spa etc which helps in taking care of the health organs like tooth, kidney and vagina respectively. 4. Which of Maslow’s hierarchy needs does Chewton Glen Hotel Spa and Country Club satisfy? How does Chewton Glen Hotel Spa and Country Club satisfy those needs and to whom? The theory suggested by Dr. Abraham Maslow is one of the most popular theories which explain the action of human beings. He suggested that an individual has different kind of needs at different times and classified these as a hierarchy of needs. In this hierarchy as and when a lower order need is satisfied, it does not motivate the individual any more. As a lower order need is met, the next higher need becomes the motivating factor for an individual. He has classified the needs into five levels. The various needs starting from lower order to higher order are as follows: Physiological Needs: These refer to biological and the most basic needs. It consists of need for food, oxygen, water, shelter and clothing. These needs are the strongest because if an individual is deprived of all other needs, physiological needs are the ones which an individual would in the top of the priority list. Safety Needs: After the physiological needs are satisfied, the next higher need is the need for security from physical danger and to have a feeling that he is well protected from adverse conditions. Need for Love, Affection and Belongingness: After the physiological and safety needs are satisfied, the next higher need is need for love, affection and belongingness. In this state a person tries to overcome feelings of alienation and loneliness. It gives a sense of belongingness. Esteem Needs: esteem needs refer to self esteem needs as well as the esteem that one gets from others. There is a strong need among human beings for gaining and giving respect to others. When these needs are met a person feels more confident and vice versa. It is a very important need for those who have satisfied the previous needs. It can be highly frustrating for a person who is not able to meet these needs. Self Actualization Needs: It is the highest order need and every one may not reach this level. Maslow describes this need as something that a person was “born to do”. For example, a musician is born to make music, a poet is born to write and a painter is born to paint. (Simons, Irwin & Drinnien, 1987). As far as Chewton is considered, it satisfies the self esteem of an individual. Chewton has a premium brand image and guests availing the service of Chewton take a sense of pride in doing so. It is a symbol of status, fame, dignity, reputation, glory and recognition which are self esteem needs as suggested by Maslow. Spa in itself was something that was usually availed by the elite class in America and Europe. Moreover since the spa is owned by Chewton which in itself caters to the elite segment, it gives a great sense of pride and prestige to the customer. Chewton has a tremendous sense of “Englishness” associated with it and the customers availing this service take pride in that feeling. Thus self esteem needs are the ones satisfied by Chewton Glen Hotel, Spa and Country Club. 5. Segmentation, Targeting and Planning are key elements for all businesses. Which segments do you think Chewton Glen Hotel Spa and Country Club are targeting and why? The Chewton Glen Hotel Spa and Country Club falls under the category of tourism industry. Tourism marketing involves finding out the wants of the tourists (market research), developing services that the tourist wants (product development), communicating the service offered (marketing communication) and providing them information regarding the places from where they can avail the services (distribution channels). Segmentation, targeting and positioning commonly referred to as STP is an important aspect of formulating marketing strategies. It is in fact one of the primary processes of marketing. The marketing mix and the marketing communications are formulated after getting a thorough understanding of the target market segment. Marketers are constantly on a look for new market segments from where they can generate more revenues for the company. Tourism can be segmented based on geographic, psychographics, demographics, price sensitivity, social strata and income level. The elements of marketing mix are then varied accordingly in order to cater to one or more target groups. Based on segmentation and targeting a suitable planning is done in terms of product positioning to get a competitive advantage (Moutinho, 2000, p.121). Chewton Glen Hotel Spa and Country Clubs targets the premium segment i.e. the higher income category who visit a spa for medicinal purposes or for merely rejuvenating themselves. Chewton is known for its class, legacy and “Englishness” and it lives up to it by portraying it as a premium brand. The employees and the décor of the hotel which comprise of traditional colors like olive, gold and claret are planned in a way to suit to the needs of the target segment. It is trying to target guests not only from Europe but across the world. It is trying to target the tourists who come to visit Europe by providing accommodation as well as spa facilities. It has accordingly planned the services it offers to its guests. The packages provided by Chewton are such that it includes a complete day’s activity starting from breakfast to dinner with the sole aim of rejuvenating the guest tired of the daily routine of life. The food and drinks served are such that it rejuvenates the health and the mind. It is trying to target those guests who want to relax and unwind themselves. It has tied up with famous brands for providing spa services. These services are expensive services and hence only the premium segment can afford them. It has tie ups with Molton Brown for body treatments, Linda Meredith for skin care, Jessica manicures and pedicures. Moreover it is continually investing in improving its fitness facilities, therapeutic healing techniques and beauty treatments to attract the health and style conscious high income segments. The target group is mainly in the age group of 30-55 who need to unwind themselves in a comfortable environment because of work pressures. References: Anandan. 2009. Product Management, 2E. Tata McGraw-Hill Elliot, R. & Percy, L. 2007. Strategic brand management. Oxford University Press. Hogg, G & Gabbott, M. 1998. Service industries marketing: new approaches, A Special Issue of the Services Industries Journal Series. Routledge. Kapferer, J.N. 2008. The new strategic brand management: creating and sustaining brand equity long term, Kogan Page Series, New Strategic Brand Management: Creating & Sustaining Brand Equity. Kogan Page Publishers. Moutinho, L. 2000. Strategic management in tourism. CABI. Simons, J.A. Irwin, D.B. Drinnien, B.A. 1987. Maslows Hierarchy of Needs. Available at: http://honolulu.hawaii.edu/intranet/committees/FacDevCom/guidebk/teachtip/maslow.htm [Accessed on June 8, 2010]. Zeithamal. 2008. Services Marketing. Tata McGraw-Hill. Read More