Marketing Feasibility of Marriott Hotel - Report Example

Marketing Feasibility of Marriott Hotel Table of Contents Introduction 3 Product Analysis 3 Environmental Analysis 4 Macro environmental factors 4 Micro environmental factors 5 SWOT analysis 6 Competition Analysis 6 Market Analysis 7 Target Markets 7 Positioning Strategy 7 Promotion Mix 8 Conclusion/Reflection 8 Works Cited 9 Name of Student: Name of Professor: Project Number: Date: Introduction This paper is based on the feasibility study of franchised operation in the hospitality and hotel industry. The company of choice for this project is Marriott International. Marriott is headquartered in Bethesda, USA. Ever since its inception in 1927, it has been holding the leading position in the hospitality industry (Marriott. “About Marriott International - Find Your World”). Its worldwide operations in more than seventy countries with 4000 hotels have made Marriott hotel a leading destination for business customers as well as tourists. The company owns 18 brands which are not only associated with headquarter and self-managed operations, but also franchised operations (Marketline. “Marriott International, Inc”). This company has been chosen mostly because of its massive operations network in a global scale. This will help us to understand the business of a successful hospitality company that has been able to expand its business operations over the years. Moreover it will help the readers to understand about the franchise business and how Marriott operates as a franchisor. Product Analysis Marriott operates with 18 different brands and each of them is known for its different product and service offering as well as targets different target customers. The Ritz Carlton is best famous for its resorts and holiday experiences. The Ritz Carlton hotels offer luxurious experiences with sophistication and style. The Bvlgari hotels are focused on the cosmopolitan locations and urban resort destinations. JW Marriott is also one of their luxury brands that focus on providing the best in the class hospitality experience. The Ritz Carlton, JW Marriott and Bvlgari fall under the Luxury Segment. The lifestyle or Collection segment includes hotels like Edition, Autograph Collection, Rennaissance, AC Hotels and Moxy hotels (Marriott, “Brands”). The Edition is characterized by the contemporary lifestyle experience of several locations. The best known Edition hotel is the Istanbul edition. The company has also introduced a new London Edition hotel and is planning to establish new hotels in New York, Abu Dhabi, Miami, etc. Autograph collection the group’s classic boutique hotels. The Renaissance hotels are mostly characterized as holiday destinations for tourists. It includes services like on-site navigation and offers a feeling of classical experience. The group’s flagship brand is the Marriott Hotel, which is equipped to cater all the needs of the premium customers. The service quality is enhanced with top of the line technological advancement (Marriott. “Brands”). The new location for opening a new Marriott hotel is in Palo Alto, near the Shoreline Lake. It will be a viable spot for a Renaissance hotel. The shoreline lake can be a good holiday destination for tourists, thus the establishing a Renaissance hotel in that location can a prospective business opportunity as this brand focuses on holiday resorts and offering premium services. Environmental Analysis Macro environmental factors The macro environmental factors can be assessed by using the PEST analysis. Political influences: Marriott’s target customers are from all over the world, so political relationships between different countries influences the customer traffic of the company. Moreover the hotel location in Palo Alto, US has been strategically chosen so that there are no significant political influences from the domestic government. According to the regulations dictated by City Tree, certain protected tree species cannot be cleared. Therefore, the land for the hotel has been chosen in such a manner that there are not protected or heritage trees in the location (Canopy, “City Tree Regulations). Economic Influence: Owing to the high economic stability and growth of US, the business of Marriott International has been positively affected. Moreover, the Palo Alto’s economic structure is also enhanced by the adjacent Silicon Valley. Thus establishing a new franchise in Palo Alto can be a lucrative proposal (Internet Archive, “Major Employers”). Social: Since Marriott International targets customers from all across the world, therefore business performance of the company is influenced by the global trend in social changes. The gradual rise in international tourism has also increased the customer traffic for Marriot (UNWTO, “Over 1.1 billion tourists travelled abroad in 2014”). Therefore the new hotel in Palo Alto will can leverage from changing social trend. Technological: The technological advancement of US has helped Marriott to develop and improve its service offerings thereby creating more value addition for the customers. Moreover, with Silicon Valley in its vicinity the new hotel can easily hire several technology companies to enhance its services. Micro environmental factors The micro environmental factors include the financial strength and human resources of the firm. The steady rise in revenue from 2012, suggests that the company is financially stable to establish a new hotel (Morning Star. “Marriott International Inc Class A”). Moreover, the company has also laid down a series of regulators for the franchisee (Marriott, “Current Owners & Franchisees”). The company also provides advises for the new franchisees so that the newly established hotels carry all the trademarks and brand image of Marriott. SWOT analysis Strength Weakness Strong Brand Valuation leading to growth of business Introduction of loyalty programs that helps to retain customers Global presence pacifies dependency risks Limited business portfolio Highly dependent on global economy Opportunity Threats Expansion of hospitality business creates future opportunities US government has taken initiative to promote tourism Highly competitive hospitality industry Frequent changes in international trade regulations Source: (Marketline, “Marriott International, Inc”) Competition Analysis Marriott holds the leading position in the US; however it faces severe competition from several other hospitality companies from all over the world. The primary competitors of Marriott are Accor, Hilton Worldwide Holdings, intercontinental hotels group etc. These companies also hold strong positions in the premium hospitality industry (Yahoo, “Marriott International, Inc. (MAR)”). They offer almost identical products and services and target the same customer profile as Marriot. The competition is most on the grounds of product differentiation. These companies always seek out for new ways to innovate their service offering by following product augmentation strategies and creating surprise for the customers. The secondary competitors are considered to be the budget hotels which provide a substitute for the hospitality services of Marriot. These hotels cannot duplicate all the premium service offerings, but they pose as a cheap alternative for lodging and hospitality services. Thus they do not pose any threat to the company as the product offering and target customers are quite different. Most of the business firms are trying to avoid business trips and substituting them by video conferencing. This can be a tertiary competition for Marriot as it slightly reduces the traffic of the business customers. The company does not worry about any new entrant because entering in to premium hospitality business requires huge capital investment which may not be feasible for a new entrant (Marketline, “Marriott International, Inc”). Market Analysis Target Markets The target markets of the new Renaissance hotel are the people belonging to the higher income group who like to go for international vacations (Marriott, “Brands”). Since the Renaissance hotel focuses on providing a vacation destination, so the primary customers are big business magnets with high income status looking for a holiday destination, celebrities and other high society individuals. Thus the primary customers are tourists with high disposable income. The secondary customers include individuals who travel for business purposes. Since Renaissance does not focus on corporate service provision so they are not the primary customers. The tertiary customers are the first time travelers and lower income group individuals. There are opportunities of new market development in Palo Alto. The service provision can be re-modified in order to tap in to a new market. By incorporating corporate service offerings like spaces for business conferences, and implementing technological advancement to enhance the value addition for the business customers. Moreover, the due to the close proximity of the Silicon Valley, it will attract a lot of corporate individuals for business meetings and conferences. Positioning Strategy The new Renaissance hotel will be positioned as premium holiday destination for the traveler belonging to the high income group. The service provision will be best in its class and the customers can completely rely on the sophistication of the experiences provided by the hotel. Moreover, the new hotel will also be a popular destination for the business customers; therefore this hotel will be perceived an overall destination for luxury and sophistication, where the customers will experience high value for money (Marriott. “Brands). The implementation of latest technology and exclusive location near the Shore line lake will create higher competitive advantage for the company. Promotion Mix Marriott employs several promotional activities like Print advertisements in billboards and hoarding, news papers. This advertisement highlights the value proposition of the company and how the customers can have an exclusive experience at Marriott hotels. Moreover, the company also uses television commercials which attract the customers by visual attractions of the hotel’s ambience the exquisite experience. Marriott also offers different promotional offers as discounts which attract tourist and frequent travelers. Additionally the company can go for corporate sponsorship of several business events or summits; this as a result will help it to create brand awareness (Marriott, “Marriott Launches New Ad Campaign for Frequent Business Travelers”). The target audiences for the promotional activities of the parent company are the tourists, business travelers and corporate firms from all across the world. Since Marriott caters to a wide variety of customers, so its promotional activities are designed for a variety of customers depending on their travel patterns and disposable income. Conclusion/Reflection Establishing a franchise operation of Marriott hotel should be done by proper analysis of the external market environment as well as the internal environment of the firm. The parent company has laid several regulations for a franchisee. Thus in order to establish a new franchise business, the franchisee needs to follows all the stated regulations. Moreover the market competition is also major factor that needs to be considered before the establishing a new business. Owing to the leading position of Marriott in the US hospitality industry, it has created a strong competitive positioning for itself (Marriott, “About Marriott International - Find Your World”). The company constantly tries to new ways to create innovative value proposition, so that it can stay ahead of the competition and create a sustainable competitive advantage and strong brand equity. Works Cited Canopy. “City Tree Regulations”. Canopy. Canopy. 2015. Web. 2015. Internet Archive. “Major Employers”. Web Archive. Palo Alto Chamber of Commerce. 2014. Web. 2015. Marketline. “Marriott International, Inc”. MarketLine. Informa Business. 2014. Web. 2015. Marriott. “About Marriott International - Find Your World”. Marriot. Marriott International, Inc. 2014. Web. 2015 Marriott. “Brands”. Marriot. Marriott International, Inc. 2014. Web. 2015 Marriott. “Current Owners & Franchisees”. Marriot. Marriott International, Inc. 2014. Web. 2015 Marriott. “Marriott Launches New Ad Campaign for Frequent Business Travelers”. Marriott News Center. Marriott International, Inc. 2014. Web. 2015 Morning Star. “Marriott International Inc Class A”. Morning Star. Morningstar, Inc. 2015. Web. 2015. UNWTO, “Over 1.1 billion tourists travelled abroad in 2014”. World Tourism Organization UNWTO. UNWTO. 2015 Web. 2015. Yahoo. “Marriott International, Inc. (MAR)”. Yahoo finance. ABC News Network. 2015. Web. 2015 Read More