Features of Marketing of Starwood Group of Hotels and Resorts - Case Study Example

Marketing Plan Presented By: Number: Supervisor: Executive Summary Starwood group of Hotels and Resorts is a widespread group worldwide. This report aims at analyzing the company’s profile and recommending a one year marketing plan for the company to improve the revenues and current standing of the company. Firstly, the report briefly touches upon the current standing of the group and analyses of its opportunities and threats are discussed. Further on the strength and weaknesses of the group is discussed. Based on the analysis of the group a twelve month marketing plan is formed to improve the current business and generate revenues. Recommendations are made on the marketing strategy. Starwood Group of Hotels has a number of opportunities to increase the brand awareness and to improve the online facilities for customers. A detailed plan is included within this report. (Word Count: 2160) Situation Analysis: Starwood Group of hotels was incorporated in 1980, and two of their largest brands Sheraton hotels and resort and Westin Hotel and resorts have been serving the market for over 60 years (Starwood, 2008). The operations of the group are divided into two main segments being: hotel and vacation ownership and residential operations. However the main business is from the hotels. Starwood has a large number of hotels worldwide naming a few: St. Regis, The Luxury Collection, Westin, Sheraton, Le Meridien, Aloft, Four Points, W and Element. As of 31st December 2007, Starwood group’s portfolio included a total of 897 Hotels with 275,000 rooms across 100 countries that primarily cater to the upscale markets of the lodging industry. The company employs about 145,000 people and has its head quarters in White Plains, New York (Starwood, 2008). Marketing Environment: Starwood group of hotels has hotels based all over the world. However the main revenues are from the hotels in the United States. The group has nine lifestyle brands that are categorized into three service categories namely; select service, full service and luxury. There has been a large scale expansion over the past few years and it is noted that the brand has not been able to cope up with the promises made to guests, employee or even the investors. Even though the group has a lot of strengths, there are a lot of opportunities that are yet to be explored. A big opportunity for the group would be that of Asia. There is a major growth possible in the developing countries (Ferguson and Hlavinka, 2006). This would help them improve market presence and also help them spread their brand far and wide across the world. The travel and tourism industry is a booming one here and the company will be able to make its mark in the area. The group has large opportunities to get into franchising with third party to spread the brand (Ferguson and Hlavinka, 2006). The business travel that was affected by the drop of the US markets can now be recovered and improved. This would open up avenues for the Element hotels that specifically deal with business travelers. However the group is also faced by a lot of threats. Starwood has shown a good growth rate of 3.0%. However competitors’ growth rate is a threat to the group as well. Hilton has shown a growth of 5.30% increase in rooms in one year, this could cause a major threat to the group. As mentioned above, the company has over 50% of its operations in US, this makes it very dependent on the US markets and adverse happening in the markets would also affect the company to a great extent. The development of Internet reservations is causing a great threat to the hotels as well since the intermediaries aim at increasing customer loyalty to their reservation system and not so much to particular hotels. Product Evaluation: The Starwood brand has built its name over the past twenty years. The company has grown in different aspects and has diversified to a lot of different fields. The company has built nine different brand names in the global marketplace. Even though the group provides excellent services, it has been noticed that the brand image is not very strong and the name is not very well known. The company has been able to built hotels worldwide; however the name is not very well spread across the globe. The group has ensured that all their hotel meet the industry standards and also have tried to ensure that they can meet the customer expectations. All the hotels under the name of Starwood have been designed to ensure complete customer satisfaction and as their values already highlight is their passion for excellence and standards of integrity and fairness. As already mentioned earlier they have hotel in over 100 countries and are spread across all around the world. Starwood have a lot of strength in their favor. Starwood has created a brand name for itself worldwide and has been able to gain a high number of loyal customers. Starwood has grown by 3.0% in one year (in Rooms) and this shows how rapidly the company is expanding and now has almost half the number of rooms as its biggest competitor (Intercontinental HG - 556,246 rooms vs. Starwood -.265,598 rooms) (Hotel-Online, 2007). Starwood has shown great returns on investments over the years and has been over market average in 2006 (Datamonitor, 2007). However the group has a few weaknesses as well. Starwood has recorded low revenues when compared to its closest competitor Hilton. In 2006 Hilton’s revenue reached up to $8162 million, which was an increase of 84% over 2005 figures (Hilton, 2008). Starwood’s prices are costlier compared to its competitors operating in the same sector. The expectations from the customer are high, in terms of quality, when they pay such high prices (Fisk et al, 2000). The marketing strategy is not very focused on the target segments. Starwood has concentrated its business in the US and thus depends on the US market to a high extent. Consumer Evaluation: The company has a dedicated website called ‘Starwood Lobby’ which is for their guests to leave their comments, positive/ negative feedback and reviews. Most of the reviews here have a common opinion that the stays at any of the company’s hotel were all wonderful. Looking at the reviews from customers it is a common opinion that the hotels are very prompt with the services and how carefully all the staff is chosen, who fit into the hotel perfectly and take pride in being part of the hotel. The weakness of the company is that they have not segmented the market correctly and have not targeted a market in particular causes a drawback for the marketing end and the brand building. Also from the reviews it is quite evident that most of the customers were satisfied with the services provided and would be loyal to the Starwood group of hotels. The company could increase corporate service and thereby increase its revenues (Jobber, 2004). Competitor Analysis: Starwood being one amongst the top 10 companies has to face a lot of competition. Competition for hotels and resorts is based more on the number of rooms, size of properties, restaurants, operations, marketing and other facilities provided. Few of the main competitors are Hilton Group, Marriott, etc. It is evident that the group has made a mark for itself and even though the high competition the group has been able to make it to the list of best hotels in the world. The group has been growing to a large extent however this is not good enough for them to compete with the giants in the industry like Hilton etc. Marketing Objectives: The main objectives that the brand needs to obtain within the plan’s term are to improve the market presence, brand awareness, online presence. Even though the company was amongst the first few to enter into online reservation booking etc., there is lot of scope for improvement in this area as well. Marketing Strategy The business aims at achieving a better market presence overall and improving the brand awareness among people. The main sector of audience that is supported by the group is business travelers. The aim of this plan is to focus on a few other sectors, to increase the revenues of the business and brand awareness. The company can aim at focusing their marketing for families. Also the company could reduce the focus on business travelers and focus on other business related activities like conferences, assessments, official outings, seminars, etc. There are different factors based on the various elements of marketing that need to taken into consideration. Considering the four important elements of marketing below are the strategic plans to help improve the business of Starwood Group of Hotels and Resorts. Promotion Strategies: Starwood over the past few years has been extremely stagnant in marketing their brand. It is essential that a company can stick out their brand to differentiate the services they provide when compared to the competitors. Starwood can promote the brand name using a lot of different media. The traditional media can be utilized very effectively. Starwood can make advertisements to promote the brands and make people aware of the factors that differentiate Starwood from their competitors. The traditional media can play a very important role for promotion of their brand. Starwood could give newspaper advertisements about the Bliss sink side six pack. Also a lot of promotional offers can be given through the traditional media. Starwood could use the television media to emphasis on how the well landscaped properties owned are for families to enjoy their holidays and to spend a weekend at the spa. A lot of offers can be given to customers in the form of gift vouchers in magazines, discount vouchers in newspapers. This would enable the company to improve the brand awareness and it would allow the people to relate to the company. It is very important to have a brand that is well known and well marketed. Also promotional expenditures should also be concentrated on improving the website of the company. With the growth of internet over the past few years it is essential that all the brands of Starwood have optimized websites, with good functionality. This is one of the most essential media for marketing these days. The company can improve their website’s functionality, which would approximately take a maximum of two months. Also it is essential that there is recognition for the brands. This could be achieved by constantly improving the content of the website and ensuring that the websites are all well optimized. Place Strategies: Starwood hotels has developed various projects worldwide, however they require improving the marketing strategies over all these locations. Keeping place in mind, the company would need to ensure that the marketing is aimed at the audience. Also since the group has already built a number of hotels in different countries worldwide, it is essential that they consider all the possible ways to market their good in accordance with the country they are located in. Also, ensuring that the brands are linked so that the consumers are able to recognize the hotels and the parent company Starwood. Starwood has developed a lot of projects over 100 different countries. Price Strategies: Starwood would keep in mind the price factor while promoting the business. This is one of the most essential elements of marketing and plays a very important role in the marketing plan. The group has built a number of hotels and it is now very important that they invest into correctly promote the hotels. The websites can be easily optimized however there will be a recurring expense on maintaining the website. The investments made over a period of one year to optimize the website and make it more interactive would help them cut down on the other costs they would normally incur in paying a third party for the reservations, Product or Service Strategies: Since the main business of Starwood is hotels and resorts, they basically are a part of the service sector. It is essential that Starwood look at improving the services it provides. A recommendation for the company would be for it to try moving into the travel and tourism sector. Also the hotel could improvise the systems used within the organization and incorporate customer relationship management, which would allow the group to understand the needs of the customers to a better extent. There are various new systems that have been developed specifically for hotels to be able to track every customers buying and ordering pattern, it can capture small details like the kind of wine the customer normally drinks, etc. Also a separate team is required to follow the comments and suggestions left by customers in the Starwood Lobby and make necessary changes. This would help them improve their service and meet up to customers requirements. Evaluation, Monitoring and Control The introduction of new CRM systems within the organization is a one time expense and does not require a lot monitoring. Introducing the system into the organization would take a maximum of three months, after which it would require to have maintenance checks. The system is simple and can be used by all employees, however with some training on the system. The marketing will be evaluated and controlled by a team of members who are well trained and have good knowledge of online marketing. The process for optimizing the website is a constant process hence a dedicated person is required for the job. Also as for the traditional marketing a team needs to be set up. This team will focus on creating advertisements for newspapers and television. Both the teams need to be supervised by a marketing manager, who needs to be knowledgeable about both the traditional marketing media as well as the online marketing. References Datamonitor, 2007, ‘SWOT on Starwood’, 15 June 2007, http://www.datamonitor.com, (accessed 15 September 2008) Ferguson, R. and Hlavinka, K., 2006, ‘Loyalty Trends 2006: Three Evolutionary Trends to transform your Loyalty Strategy’, Journal of Consumer Marketing, Nov 5, 2006, Vol. 23, p292-299 Fisk, R. P., Grove, S. J. and John, J., 2000, Interactive Services Marketing, Houghton Mifflin, Boston Hilton, 2008, http://worldwide1.hilton.com, (accessed 14 September 2008) Hotel-Online, 2007, ‘Hotel Ranking’, June 2007, http://www.hotel-online.com/News/PR2007_2nd/Jun07_HotelRanking.html, (accessed 14 September 2008) Jobber, D., 2004, Principles and Practice of Marketing, 4th edn, McGraw-Hill International, Berkshire Starwood, 2008, ‘Company Info’, Retrieved from http://www.starwoodhotels.com/corporate/company_info.html, (accessed 15 September 2008) Starwood-Lobby, 2008, ‘Starwood Lobby’, http://www.starwoodlobby.com/archives/2008/05/le_meridien_phu.html,(accessed 15 September 2008) Read More