Marketing in Hospitality Management - Stanley Hotel's Positioning in a Competitive Environment - Case Study Example

Marketing in Hospitality Management 1.0 Introduction Marketing strategies that are developed for certain business differs a lot. Most business produce services and products that they can take to the customers. However, in the case of a hospitality business such as a hotel, the customer is expected to come to the hotel. This makes it different from other businesses and marketing strategies that should be developed is trickier. An example of a hospitality business is Stanley Hotel. 2.0 Marketing The three basic steps that are associated with marketing were applied on Stanley Hotel. These three steps were used to identify and analyse the market needs and position the hotel with the product that will enable to use the targeted market segment. 2.1 Market Segment The age range of 25 – 45 formed the major demographic on the week day base. This age group were people who were employed and their professional positions were middle and upper management level. During the weekends this age group with there families were included. This has made it possible for the baby boomer generation to become the potential customers. Generally, the market is segmented into two groups that formed the demographic group that constituted leisure and business. The segment population or number usually varies in different quarters and it mostly depended on the season and the number of local dairy events that are in the given year. 2.2 Target Market The hotel has analysed the market and obtained data that was possible to identify the main market that the company can maximise. In the first year, Stanley Hotel has targeted the smaller market in each of the quarters since it was easier to achieve. This assumption was made because most competitors will overlook this market hence it could be less competitive. However, in this segment there are some shortcomings. The hotel has discovered that there is less demand and extra supply in the smaller segment of the market and this will make it hard to succeed in the smaller market segment. Therefore, Stanley Hotel decided to identify the targeted market according to seasonal, demand and events in each quarter. The second and third years, the main market target would be the first, second and fourth quarter in terms of businesses customers. According to the targeted market, the third segment of each year could be leisure according to the market segment. From this information the Stanley Hotel was able to develop a market mix strategy that brought in the issues of service and products; this could be able to use the demand of each of the targeted market. 2.3 Positioning and Product Through the analysis of the market segment and the target market, Stanley Hotel is positioned in a three star property. This level of hotel enables a flexible means in terms of services and products that will suite business and leisure targeted segments in the demographic group. However, most customers are in the class of baby boomer generation, this will influence their financial status. To fulfil this obligation, the services and products should be excellent with a medium range pricing. Stanley Hotel has focused its attention to the hospitality sector that incorporates accommodation and food & beverage that is easily embraced by the total market (both segments). Therefore, other services such as touring and conference are not that much beneficial to the hotel 2.4 Competitor There is a high level of competition in this industry which allows for the opportunity for many businesses to gain some segment in the market. This idea is important in identification and understanding the strategies of the competitors. With this information Stanley Hotel would be able to develop a better strategy or a completely different one from their competitors to suite the targeted market. After analyzing the market, Stanley Hotel was able to know the main competitors who are: Hilton Hotel – This hotel has similar facilities like Stanley Hotel with the three level star properties. Hilton Hotel is a high standard hotel because it is still new and usually it is refurbished throughout the year so as to maintain the standards. This is a threat to Stanley Hotel and there is a higher chance of competing to the same customer base. Springs Hotel – This hotel is the greatest threat for Stanley Hotel because most facilities that the two hotels offer are the same. They are looking at the same target market, the pricing for services and products are the same and the facilities that are offered are the same. Additionally, Springs Hotel is focusing in the same market strategy which is the same target market segment and the flexibility of products. Accommodation that is provided is excellent with good conditions. However, Spring Hotel focuses more in the rooms that they provide. This then leaves a chance for Stanley Hotel in terms of foods and beverages that the hotel has overlooked. 2.5 Marketing Strategy Therefore, Stanley Hotel has positioned themselves in a competitive environment. To succeed in this environment Stanley Hotel developed a strong marketing strategy to increases and gain interest from the market. Stanley Hotel has a lot of information that they obtained from exited market researches, buying relevant market research and obtaining information from bench mark competitors. The information that was obtained from these three sectors was used to develop a market strategy. This resulted in them developing two strategies: advertising and forming a policy that indicated pricing = service = value of money. Applying this strategies, it was able to create a market mix which could easily attract both the target markets and at different period time. 2.5.1 Advertising Stanley Hotel overlooked advertising strategy because they believed that advertising was expense. However, through information obtained from marketing research it has shown that advertising is an important strategy and should be invested on so as to attract the targeted market and encourage customers using their money in the business. Therefore, in the second and third year, Stanley Hotel invested in advertising strategy to attract more customers to the property. They have developed an advertising strategy that ensures that it is effective in its usage in communicating the service and the product to the target market. Hence, the advertising strategy maximised on the services and products (accommodation and food & beverage) and its corresponding effectiveness on the market segment. 2.5.1.1 Choose Advertisement Room Business group is the dominant targeted market for Stanley Hotel. The most effective advertising media is the “Sunday National Newspaper” which has an approximation of 569,000 sales per week. Stanley Hotel has advertised single rooms and single weekends in the first, second, and forth quarter, so as to communicate with the targeted market in each quarter. Additionally, they have advertised in the third quarter in the same media. They have also advertised in websites and local visitors guide. Using this strategy has enabled Stanley Hotel to increase the sale of the rooms in the second and third year. 2.5.1.2 Choose advertisement on Food and Beverages Food and beverages is important area where the business is able to accumulate more revenue. This is because most hotels or competitors are not featuring in this market, hence puts Stanley Hotel at an advantage. The strategy in food and beverage is focusing on the in-house guest because it is a dominant market for the business community. This strategy requires a flexible time and the meals should be easily accessible to suite the customers lifestyles. Therefore, Stanley Hotel employed the use of point-of-sale to attract the business targeted group in-house guests. Additionally, the local newspaper will be used to attract local community during special events e.g. Christmas which enables the creation of sub-segment during the low business season period. Refurbishing of the hotel is a strategy that was employed to help in creating self promotion and to attract local customer. This strategy resulted in increase of beverages and foods and increased the revenues by one third. 2.5.2 Pricing Strategy Pricing is an important aspect in Staley Hotel. During the first year the prices were inconsistent which confused the market. In the second year they were able to develop a pricing strategy that enabled stabilization of prices throughout the year. Pricing of products and services were based on type of product, quality of service, cost of production and service (break even and return) and the behaviour of the targeted market e.g. high and low seasons. Consistent price strategy was set in lower range which produced low income on the single product and service. This strategy was applied so that an increase of sale could be achieved through the many customers that will visit the hotel. This has resulted in an increase of sales in the second year. This would provide the opportunity to increase slowly the price to gain more profit in return. 2.6 Customer Feedback The response of customer satisfaction is the first year was poor. The feedbacks that were obtained at that time were used to improve the products and services. The feedbacks were also used in creating an effective marketing plan. Additionally, the feedbacks of subsequent months were used to improve the standard of the hotel and other suggestions would be incorporated as the days passes by. Read More