The Anatomy of Marketing Positioning Strategy - Case Study Example

Strategic Marketing Plan-Heathrow Marriott Hotels UK Name: Tutor: Course: Date: Table of Contents Table of Contents 2 1.0 Introduction 5 1.1 Strategic Marketing Plan 5 1.1.1 Summary of Marketing Audit 5 1.1.2 Key issues 6 1.1.3 Marketing objectives 6 1.1.4 Segmentation, targeting and positioning 6 1.5 Branding 9 1.2Marketing mix recommendations 10 1.3 Corporate social responsibility 12 Reference list 14 Dev, CK Zhou, Z Brown, J Agarwal, S 2009, Customer orientation or competitor orientation: Which marketing strategy has a higher payoff for hotel brands? Cornell Hospitality Quarterly, Vol. 50, pp. 19-28. 14 Farrell, T 2014, Regulating alcohol marketing practices in France and UK, Academy of Wine Business Research, 8th International conference, Oxford Brookes University. http://academyofwinebusiness.com/wp-content/uploads/2014/07/CB07_Lecat_Benoit.pdf 14 Graser, M 2014, How Marriott wants to be the Red Bull of the Hotel Industry. http://variety.com/2014/biz/news/how-marriott-wants-to-be-the-red-bull-of-the-hotel- industry-1201316184/ 14 Hanlon, A 2013, The segmentation, targeting and positioning, Smart insights, December 7th 2013, http://www.smartinsights.com/digital-marketing-strategy/customer-segmentation- targeting/segmentation-targeting-and-positioning/ 14 House, RJ Hanges, PJ Javidan, M Dorfman, PW & Gupta, V 2004, Culture, leadership, and organizations: The GLOBE study of 62 societies, Thousand Oaks, CA: Sage. 14 Jiang, W Dev, C & Rao, V 2002, Brand extension and customer loyalty: Evidence from the lodging industry. Cornell Hotel and Restaurant Administration Quarterly, Vol. 43, no.4, pp. 5-16. 14 Kennedy, T 2011, UK tourism facts and figures, The Telegraph, June 20th 2011, http://www.telegraph.co.uk/news/earth/environment/tourism/8587231/UK-Tourism-facts- and-figures.html. 14 Kim, WG 2008, Branding, brand equity and brand extensions. In Handbook of hospitality marketing management, ed. Oh, H and Pizam, A, pp. 87-118. New York: Elsevier. 14 Marriott inc. 2014, Marriott International Discusses Strategies for Long-term Success in Latin America. Marriott News Center. 14 Marriott International Inc. 2014, Marriott International manager and leadership development programmes. World Economic Forum. 15 Marriott, 2014, Sustainability report, http://www.marriott.com/Multimedia/PDF/CorporateResponsibility/2014SustainRpt FNL_lr.pdf 15 McIndoe, C 2013, Six technology trends revolutionalizing the hospitality industry, Industry News, May 13th 2013, http://www.hospitalitynet.org/news/4060662.html 15 Moore, G 2015, 2014 UK interest rate and inflation outlook, Russell Research. http://www.russell.com/documents/uk/research/2014/russell-investments-2014-uk- interest-rate-and-inflation-outlook.pdf 15 Oh, H 1999, Service quality, customer satisfaction, and customer value: A holistic perspective. International Journal of Hospitality Management, Vol. 18, pp. 67-82. 15 O’Neill, JW & Mattila, AS 2010, Hotel Brand Strategy. Cornell Hospitality Quartely. Vol. 51, no. 1, pp. 27-34. 15 O’Neill, JW & Mattila, AS 2004, Hotel branding strategy: Its relationship to guest satisfaction and room revenue. Journal of Hospitality & Tourism Research, Vol. 28, no. 2, pp. 156- 165. 15 O’Neill, JW & Mattila, AS 2006, Strategic hotel development and positioning: The effect of revenue drivers on profitability, Cornell Hotel and Restaurant Administration Quarterly, Vol. 47, no. 2, pp. 146-154. 15 O’Neill, JW Mattila, AS & Xiao, Q 2006, Hotel guest satisfaction and brand performance: The effect of franchising strategy, Journal of Quality Assurance in Hospitality & Tourism, Vol. 7, no. 3, pp. 25-39. 15 Seggie, SH Cavusgil, E & Phelan, SE 2007, Measurement of return on marketing investment: A conceptual framework and the future of marketing metrics. Industrial Marketing Management, Vol. 36, no. 6, pp. 834-841. 15 Vaid, H 2003, Branding: Brand strategy, design, and implementation of corporate and product identity, New York: Watson-Guptill. 16 APPENDICES 17 Appendix I: SWOT analysis – Marriott Hotels 17 Appendix II: PESTLE Analysis – Marriott Hotels 17 Appendix III: Porter’s five forces – Marriott Hotels 18 1.0 Introduction Heathrow Marriott hotels UK is owned by the Marriott international inc. of America. There are a number of Marriott hotels in the United Kingdom offering guestroom accommodation, fine dining, car rentals, fitness centre, pools, conferences and entertainment. The 393 bedrooms Heathrow Marriott are fitted with internet, plasma TVs, luxury bedding, heated indoor pools and access to leisure clubs. Executive rooms have access to airport and city views, evening canapés and complimentary breakfast. This marketing plan will explore market audit and provide key issues affecting strategic growth and sustainability of Marriott hotels UK. It establishes the marketing objectives, segmentation, targeting and positioning of hotel customers. The plan also assesses branding issues and makes recommendations on marketing mix as well as social responsibility approaches in the organization. 1.1 Strategic Marketing Plan 1.1.1 Summary of Marketing Audit Marketing audit of Heathrow Marriott hotel will be undertaken using three audit tools preferably SWOT, PESTLE and Five forces analysis. Market audit assesses the macro- and microenvironment to unravel strategic and marketing mix with consideration of efficiency and risks (Cardell, 2009). Firstly, SWOT analysis explores the strengths, weaknesses and opportunities and threats faced by London Marriott hotel. Secondly, PESTLE analysis explores the political, economic, socio-cultural, technological, and environmental aspects of Heathrow Marriott hotel. Lastly, Porters five forces establish the supplier power and buyer power. It also assesses competitive rivalry, threat of substitutes and threat of new entrants to the London hotel industry. Further details on SWOT, PESTLE, and Porters five forces are available in the appendices section of this report (Appendix I, II and III). Marriott hotels Heathrow has higher recall and brand recognition, superior reservation system but faces limited target market segments. Brand expansion and innovation in various parts of the UK is an essential opportunity to be capitalized (Graser, 2014). However, vulnerability to terrorist attacks and recession has minimized spending of customers. Regulation and introduction of duties on wine has increased costs by 10% and the attempt to lower energy costs by 60% is driving the hospitality industry into sustainability (Marriott International Inc. 2014). The UK economy has stabilized in terms of inflation, and interest rates and employment which has made the hotel industry register good returns in 2013 and 2014 (Moore, 2015). Supplier power is high while the threat of substitutes remains low. On the other hand, likelihood of new entrants and buyer power remains moderate but competitor rivalry is high. 1.1.2 Key issues The key issues identified in the marketing audit are sustainable savings on costs, staff retention, branding and targeting. Marriott hotel strives to reduce production costs while staff morale is lower compared to other franchises within the hotel chain. Branding remains a challenge owing to presence of 18 hotels within the same location and targeting similar segments. Finally, targeting business customers and tourists limits the client base for the hotel. The hotel will have to extend its client base to include tourists. 1.1.3 Marketing objectives 1. To reduce staff turnover to 35% within the next two years 2. To save 40% of the total energy and water costs within the next one year 3. To improve brand recognition by 30% within the next two years 4. To extend target market to include tourists in the next one year 5. To grow the number of customers by 20% in the next one year 1.1.4 Segmentation, targeting and positioning Segmentation is about determining the type of consumers that have different needs in existence (Hanlon, 2013). In the hospitality market, consumers demand reliability, responsiveness and empathy. Others are concerned about safety and servicescape (O’Neill, et al. 2006). Firms that tend to be profitable are those that invest in greater customer experience and specialized in meeting the needs of one consumer group. Segmentation variables used include demographic, geographic and financial. Tourists being the target segment are drawn from all over the world especially from Germany, USA and Australia. They are aged between 25 and 65 years with many coming as families. They are working and earn a combined family income of $5,000-$15,000 per month. They usually save for holidays and vacations that last between 2 to 3 weeks. Tourists also travel with families on ship or aeroplanes. Tom Kennedy writes in The Telegraph in 2011 that tourism is set to increase the number of jobs in the UK by 250,000 to 2.9 million in 2020. In addition, tourists and celebrities are spending about £16 billion annually in the UK (Kennedy, 2011). Targeting is about identifying one or more segments that will give better returns. Marketing has three approaches to segmentation; undifferentiated, concentrated and differentiated strategies (Hanlon, 2013). Differentiated strategy applies to the Heathrow Marriott hotels in that it offers highly priced hotel services to customers not sensitive to price but comfort, ambience and personalized services (Dev et al. 2009).Choice of the target market is informed by existing segments, size of segment, company strengths and capabilities (Hanlon, 2013). Heathrow Marriott hotel already has the facilities and human resource capabilities to serve and meet the needs of this market segment. There are more than 2.9 million tourists visiting the UK of which majority come through Heathrow airport (Kennedy, 2011). The hotel would be better off targeting tourists and celebrities seeking ambience, peace of mind, responsive service and recognition. Tourists are of all ages, diverse nationalities with university education and desire to conquer new places of interest. Most tourists especially from Australia, France, Germany and USA have savings of more than $1.5 million and spend time with their spouses or families. They prefer staying in luxury hotels with variety of amenities such as theme (amusement) parks, swimming pools, nature trail and picturesque views. Families are mainly parents with two to three children who are on holiday when school closes. Ages of children are between 5 and years while parents are college educated; are middle management to top management enjoying their holiday savings or paid holidays. They prefer staying in one hotel until the end of their stay. Positioning literally means implementing targeting. Heathrow Marriott hotel is positioned as ‘premium class hotel’ that meets the needs of the high end market. Positioning means implementing the image and appeal of the ‘premium class’. The hotel will adopt the customer intimate strategy in which efficiency is less emphasized that reliability, personalized service and responsiveness (O’Neill & Mattila, 2006). Here, distribution is selective, promotion exudes prestige and price is premium (Hanlon, 2013). Key competitors of Marriott Hotels UK are Hilton, Premier Inn London and Holiday Inn London. Holiday Inn is excellent for shopping trip and offers free Wi-Fi while Premier Inn London is loved by travellers from Canada. Hilton is fabulous but quite expensive. It also located in a strategic area with upscale facilities. Marriott hotels will be positioned as great experience of English culture and heritage. This will feature English dishes and delicacies. The hotel will be perceived as excellent in value offered for price charged. Brooksbank (1994) suggests that marketing positioning theory of a service or product entails determining a reasonable location of the service in the future minds of potential customers. The basic positioning principles is not by engendering new or different things, but manipulating minds of people to what was originally absent. This implies that the hearts of consumers is the essence of positioning and the ultimate marketing battleground (O’Neill & Mattila, 2006). Consumers perceived value and price as is captured in perceptual maps as shown in figure 1 below. Figure 1: Perceptual Mapping of Marriott hotels, UK 1.5 Branding The value of branding has firmly accepted and embraced as an essential component of its marketing strategy in the hotel industry (Dev et al. 2009). Hotels engage in extensive brand segmentation. To serve multiple market segments, most lodging companies developed multiple brands (Jiang, Dev, and Rao 2002). Marriott is one of the companies that offer numerous product tiers a strategy that has been accepted in hotel operations. Brucks et al. (2000) argues that product tier segmentation strategy gives tangibility to what is essentially intangible and asserts that a brand name is part of the process. When a particular property’s quality is established, it is possible to give the customer essential information regarding service and product. The value of a brand depends on brand awareness of potential guests, overall customer satisfaction and quality perception (O’Neill and Mattila 2004). Heathrow Marriott hotel can make remarkable growth of hotel branding by providing added value to guests who in turn foster brand loyalty. According to O’Neill and Mattila (2004) well-managed hotel brands and a corporate strategy viewpoint tend to gain increased market share. This happens regardless of parent companies taking diverse approaches in individual brand identity management. Marriott includes its corporate name on most of its brands while others such as Choice Hotels and Starwood employ a house-of-brands strategy. However, Wyndham and Hilton use both approaches depending on the nature of hotel brands available. Similarly, information identity and logos for their various product brands take different approaches in various chains (O’neill & Mattila, 2010). In Marriott hotels, brands constitute a promise that is enhanced by consistently interacting with consumers. To build good brand, Marriot needs to create good feeling among consumers and engage in successful brand promotions. For example, Heathrow Marriott hotel can invest in tourism promotions and partner with airlines to increase its brand image and identity around the globe. Since current brand identity of Marriott is ‘making travel more brilliant’, the hotel should be involved bold service innovation and reinventing travel. The hotel prefers simplicity, inclusiveness, sharing and rewarding talent and innovation. The level of brand equity in the hotel industry is related to the ability of a brand to develop sub-brands and expand geographically through franchising (Vaid, 2003). Marriott hotels should develop brand-extension strategy by allowing guests choose their franchises depending on familiar name brand extension, purpose of travel, and a trusted brand that economize search costs and time. Based on the perceptual mapping (fig.1), first, Marriott can increase price and offer greater value in fine dining, guest servicescape and branding to create more sophisticated websites and brochures. Second, Marriott can establish more franchises in Manchester and Glasgow as part of geographical expansion in the UK. This will increase exposure and dominance of the Marriott brand in the UK. 1.2 Marketing mix recommendations 1. People Marriott hotel should introduce performance management systems. This will help rate and appraise employees based on their skills, experience and creativity. In SWOT analysis, it was found that employees have low morale to work despite the elite status of the hotels. Performance management systems will increase satisfaction and motivation levels of hotel staff (Smither, 2001). Invest in security and safety of staff and employees. Round the clock surveillance systems are critical when threats of terrorism are imminent (Flemming, 1998). The hotel will need to update its security apparatus such as CCTV cameras, physical searching, employee health and safety. Diversity and inclusion of hotel service staff. Given the new target market of tourists from US, France, Germany, Japan among others, the company needs to invest in staff diversity. Tourists from different walks of life will be satisfied with the decision by the hotel to incorporate diverse employees (House et al. 2004). 2. Process Reducing energy costs will increase sustainability of the hotel chain. Marriott international inc. has made attempts to reduce carbon emissions associated with use of coal in generating power for heating and lighting rooms and the kitchen. Using solar power and recyclable water will help Marriott hotel chain to reduce consumption of electricity and water by 50% (Seggie et al. 2007). Collaboration and partnership with suppliers will enable firms to meet their service quality requirements (Rowland-Jones et al. 2008). For example, suppliers of beddings, sheeting and accessories can negotiate on price and quality for its room decorations, textiles and fittings. As indicated earlier that supplier power is high, it is important that Marriott hotel specifies a list of requirements and specifications that will meet the requirements of the new target market. This is possible through signing long-term contracts (say 5 years) with some of the leading suppliers in the UK and Europe. Encourage use of cloud computing as a mainstream technology that sorts queries from staff, customers and other stakeholders. Technology has been embraced by hospitality and travel industry to enhance service delivery and customer satisfaction (McIndoe, 2013). For example, cloud computing can be used to conduct customer surveys, customer feedbacks and communicate activities within the hotel. This also indicates the hotel chain is ahead of the competition by engaging in incremental innovation. 3. Promotion Engage in celebrity branding. Promotion is intended to establish a customer base within a given period of time (Naidoo & Willis, 2009). Brand recognition is an issue that requires greater insight and attention by the hotel chain. Marriott hotel is keen on promoting its corporate name in events and functions. Kim (2008) observes that in order to build a good brand, companies require celebrity endorsements and support. Famous athletes, footballers and musicians can grace promotions of the hotel in order to improve brand identity and image. Celebrity endorsements leads to successful brand endorsements and celebrity branding as a result of advertising based on power of leverage (Kim, 2008). Promote new market by liaising with the department of tourism. Existing target market is comprises top government officials and business officials. This market is not sustainable as compared to targeting tourists and celebrities. Kennedy (2011) observes that tourism is the third highest income earner in the UK bringing in about £16 billion annually to the country. Targeting tourists will mean that Marriott hotel engages in differentiated marketing strategies using premium airlines and companies to distribute pamphlets and brochures. 1.3 Corporate social responsibility Corporate responsibility mitigates businesses against the impacts of natural environment and business operations. The goal of Marriott hotel chain is to lessen it impact on the natural environment by providing communities with opportunities for more sustainable and better future. The hotel is already investing in innovative conservation initiatives portfolio. In order to attain global sustainable goals by 2020, the hotel chain will reduce water and energy consumption 20% (Marriott, 2014). It also aims to empower hotel development partners into building green multi-billion dollar supply chain and hotels. The hotel will also inspire and educate guests and associates into preserving and conserving the environment in which it operates. However, Marriott hotels CSR funding for community activities within the UK remains low. The UK community perceives this as underrepresentation of their concerns by businesses. Currently, innovative conservation initiatives are being established by the hotel chain to address environmental challenges through water conservation and rainforest protection. This is mainly targeted at conserving the physical environment but Marriott UK may benefit from funding recycling systems for hotel wastes. Copenhagen and Cancun United Nations Climate Conferences saw Marriott support State of Amazonas and Amazonas Sustainable Foundation (Marriott Inc. 2014). The hotel chain has been steadfast in partnering with effective model to mitigate against climate change. In a submission to the U.S. Congress May 2009, the hotel chain and Avoided Deforestation Partners became founding signatories to the Tropical Forest Climate Unity Agreement (Marriott Inc. 2014). In the UK, Marriott hotels should advocate for government support of rainforest preservation projects especially in the British midlands and Dolphin projects in the English Channel. The hotel has also collaborated with British Airways, one of its top business partners, to showcase aligned commitment to supply chain management and sustainable operations. The hotel should request opinions from different stakeholders to help in shaping its future direction. This can be in the form of interactive formats where travel buyers give opinions of programs and strategies. Marriott hotel chain needs to move beyond elementary environmental programs and address more challenging and complex CSR issues such as long-term industry collaboration with suppliers and social innovation (McIndoe, 2013). The company will need to improve living standards and education, foster strong local economies and consider their involvement with local communities especially at a time business trust is generally low. For example, Marriott hotel can sponsor 10 students studying hotel and hospitality into famous UK universities or colleges every year. Reference list Brooksbank, R 1994, The Anatomy of Marketing Positioning Strategy, Marketing Intelligence & Planning, Vol. 12 no. 4, pp.10 – 14. Cardell, C 2009, Marketing Audit. Available: http://www.marketingessentials.co.uk/Marketing-Audit.htm? Dev, CK Zhou, Z Brown, J Agarwal, S 2009, Customer orientation or competitor orientation: Which marketing strategy has a higher payoff for hotel brands? Cornell Hospitality Quarterly, Vol. 50, pp. 19-28. Farrell, T 2014, Regulating alcohol marketing practices in France and UK, Academy of Wine Business Research, 8th International conference, Oxford Brookes University. http://academyofwinebusiness.com/wp-content/uploads/2014/07/CB07_Lecat_Benoit.pdf Fleming, J 1998, The Law of Torts (9th ed, 1998) at 410; J W Neyers, A Theory of Vicarious Liability, Alberta Law Review. 287 (48): 67-80. Graser, M 2014, How Marriott wants to be the Red Bull of the Hotel Industry. http://variety.com/2014/biz/news/how-marriott-wants-to-be-the-red-bull-of-the-hotel- industry-1201316184/ Hanlon, A 2013, The segmentation, targeting and positioning, Smart insights, December 7th 2013, http://www.smartinsights.com/digital-marketing-strategy/customer-segmentation- targeting/segmentation-targeting-and-positioning/ House, RJ Hanges, PJ Javidan, M Dorfman, PW & Gupta, V 2004, Culture, leadership, and organizations: The GLOBE study of 62 societies, Thousand Oaks, CA: Sage. Jiang, W Dev, C & Rao, V 2002, Brand extension and customer loyalty: Evidence from the lodging industry. Cornell Hotel and Restaurant Administration Quarterly, Vol. 43, no.4, pp. 5-16. Kennedy, T 2011, UK tourism facts and figures, The Telegraph, June 20th 2011, http://www.telegraph.co.uk/news/earth/environment/tourism/8587231/UK-Tourism-facts- and-figures.html. Kim, WG 2008, Branding, brand equity and brand extensions. In Handbook of hospitality marketing management, ed. Oh, H and Pizam, A, pp. 87-118. New York: Elsevier. Marriott inc. 2014, Marriott International Discusses Strategies for Long-term Success in Latin America. Marriott News Center. Marriott International Inc. 2014, Marriott International manager and leadership development programmes. World Economic Forum. Marriott, 2014, Sustainability report, http://www.marriott.com/Multimedia/PDF/CorporateResponsibility/2014SustainRpt FNL_lr.pdf McIndoe, C 2013, Six technology trends revolutionalizing the hospitality industry, Industry News, May 13th 2013, http://www.hospitalitynet.org/news/4060662.html Moore, G 2015, 2014 UK interest rate and inflation outlook, Russell Research. http://www.russell.com/documents/uk/research/2014/russell-investments-2014-uk- interest-rate-and-inflation-outlook.pdf Naidoo, J & Willis, J 2009, Foundations for health promotion (3rd ed.). London, England: Elsevier. Oh, H 1999, Service quality, customer satisfaction, and customer value: A holistic perspective. International Journal of Hospitality Management, Vol. 18, pp. 67-82. O’Neill, JW & Mattila, AS 2010, Hotel Brand Strategy. Cornell Hospitality Quartely. Vol. 51, no. 1, pp. 27-34. O’Neill, JW & Mattila, AS 2004, Hotel branding strategy: Its relationship to guest satisfaction and room revenue. Journal of Hospitality & Tourism Research, Vol. 28, no. 2, pp. 156- 165. O’Neill, JW & Mattila, AS 2006, Strategic hotel development and positioning: The effect of revenue drivers on profitability, Cornell Hotel and Restaurant Administration Quarterly, Vol. 47, no. 2, pp. 146-154. O’Neill, JW Mattila, AS & Xiao, Q 2006, Hotel guest satisfaction and brand performance: The effect of franchising strategy, Journal of Quality Assurance in Hospitality & Tourism, Vol. 7, no. 3, pp. 25-39. Rowland-Jones, R Thomas, PT & Page-Thomas, K 2008, Quality Management tools & techniques: profiling SME use & customer expectations. The International Journal for Quality and Standards. London. Vol. 5, pp. 56-78. Seggie, SH Cavusgil, E & Phelan, SE 2007, Measurement of return on marketing investment: A conceptual framework and the future of marketing metrics. Industrial Marketing Management, Vol. 36, no. 6, pp. 834-841. Smither, J 2006, Performance Appraisal: State of the Art in Practice. San Francisco: Jossey- Bass. Vaid, H 2003, Branding: Brand strategy, design, and implementation of corporate and product identity, New York: Watson-Guptill. APPENDICES Appendix I: SWOT analysis – Marriott Hotels Strengths Higher recall and brand recognition Augmented products like photocopying facilities, fax, internet and cash machine Top amongst its competitors Superior reservation system Good location to attract premium clientele Constant upgrade of business processes and improved customer experiences from technical innovations Weaknesses Hotel limited to business guests and top government officials De-energized and low staff morale at 45% (Cardell, 2009) Brand dilution from high number of hotels and global expansion Limited market share due to competition from 18 hotels in Heathrow area Opportunities Brand expansion and innovation in various parts of the UK Excellence renovations and servicescapes Customer service innovation using mobile technologies Threats Vulnerability to terrorist attacks Recession minimized spending of customers Competition on price points Appendix II: PESTLE Analysis – Marriott Hotels Politico-legal: In 2012, the UK parliament increased duty on 75cl bottle of wine to £2 (increase of 10%) making it the highest in Europe (Graser, 2014). Exemptions by law for guests to smoke in their hotel rooms but the hotel designed a smoking area instead. Package travel regulations 2(1) provides unlimited compensation and refund rights to hotel clients in areas of transport, accommodation and other tourist services. The hotel is also facing challenges of complying with Health and Safety at Work Act 1974 given the high staff turnover. This results not only from unfavourable compensation but also vulnerability to illness and injury. Economic: UK is a developed country with stable economy. The currency gain against the dollar and euro is a win for the hotel chain but it may change as the UK debates on embracing the EU currency. Austerity measures on Greek economy and differences with traditional trading partners like Russia has limited movement of tourists and business customers to the UK (Moore, 2015). Unemployment rates in the UK fell to 5.5% in May 2015 while interest rates stabilized at 0.5%. This signified increased economic performance and availability of jobs for specific skills especially in tourism and hospitality. Inflation rates by May 2015 stood at 0.1% which was -0.1% change compared to the previous month of April 2015 (Moore, 2015). Socio-cultural: The British people value dinner and breakfast especially tea. UK nationals prefer travelling and learning different cultures around the world. They are social and like interacting with people of diverse communities and religions. The literacy rates are 99.9% and majority have university education. Income inequalities are low but with increasing presence of middle and upper class citizens. Marriott hotels believe inclusion and diversity hence employing people from different religious and cultural backgrounds. Technological: Social media and mobile technologies have been embraced by the hotel to a greater extend. Most hotel rooms and lobbies are fitted with internet and Wi-Fi connections. Mobile telephones such as smartphones and tablets have provided means of contacting hotel customers outside their rooms in case of emergency services. Similarly, projection and animation gadgets are being used in conferencing and are appropriate for business customers. Cashless operations necessitated by e-commerce, online booking and ordering have increased effectiveness and efficiency of hotel helpdesk and frontline service staff. In serviced apartments, cloud computing is the mainstream technology that sorts queries from staff, customers and other stakeholders. Customer relationship management (CRM) systems have become personalized systems to capture guest experiences and preferences in hotels. Environment: There is a growing concern over carbon emissions and disposal of plastic bags used in the hospitality industry. This drives a renewed call to save energy and water in washrooms, showers, refrigerators and swimming pools. Hotels and hospitality sector in the UK are keen on saving on 60% of all total energy costs and 25% on lighting (McIndoe, 2013). Many hotels are now employing energy manager to monitor and develop action plans that includes training staff on how to save energy. Appendix III: Porter’s five forces – Marriott Hotels Supplier power: High. Common suppliers are farmers, food processors, water and lighting departments, car rental companies and airlines. Suppliers are many and have high power compared to the hotel. This means that the hotel can negotiate based on price and receives the lowest bidder as supplier of foodstuffs. Hotels also operate own real estates and production business meaning that they can integrate backwards. Besides, the sector is labour intensive meaning that it can determine wages and salaries to its employees. Threat of substitutes: Low. Beneficial alternatives to luxury hotels include camping and caravan tours. Cheaper alternatives include people preferring out of town accommodation or staying with friends or relatives while on a visit to the UK. Luxury hotels and resorts have huge capital costs that make loyal customers incur huge switching costs. Likelihood of new entrants: Moderate. Hotel industry is highly regulated and differentiated. The market growth is gentle and takes time to mature. It has low fixed and switching costs influenced by tourism and travel trends. Sole proprietors can open small hotels but huge capital expenditures and lack of space makes it difficult to develop hotel chains. Legal and financial complexities also require spending on professional services as well as mergers. Buyer power: Moderate: Hospitality sector has negligible switching costs and competition based on price is no longer a critical success factor but more on innovation and brand recognition. Customers have high reliance on systems and sophisticated technology such as mobile communication channels. Competitor rivalry: High. In Heathrow area alone, there are 18 hotels serving the same customer segment. There are many more in the city of London. Many competitors have recognized the need to embrace technology and information systems as resources and capabilities to edge their competitors. By targeting the luxury customer segment, these hotels attract superior service delivery and staff. Competition is mainly on recruiting best staff, sourcing from reliable and competitive firms and maintaining a steady stream of loyal customers. Park Grand and Holiday Inn are perceived to be expensive (highly priced) while Marriott and Hilton are cheaper, hence offering higher value. Marriott has a competitor to beat (Holiday Inn) that is perceived with offering value at a higher price. Read More