The Marketing Strategies of Accor Hotels - Case Study Example

Accor hotels Name Institution Accor hotels Table of Contents Executive summary……………………………………………………………………………..4 1. Alternative solution 1( AS1): dealing effectively with competition ……………………4 1.1 gap analysis…………………………………………………………………………5 1.2 changes to marketing strategy………………………………………………………..6 1.3 expected results……………………………………………………………………….8 1.4 implementation ……………………………………………………………………….8 1.5 discussion……………………………………………………………………………9 2. alternative solution 2 (AS2): computer system policy…………………………………10 2.1 gap analysis………………………………………………………………………….10 2.2 changes to marketing strategy……………………………………………………….12 2.3 expected results………………………………………………………………………13 2.4 implementation………………………………………………………………………13 2.5 discussion…………………………………………………………………………….14 3. recommended solution (RS): expanding their market…………………………………15 3.1 gap analysis……………………………………………………………………….15 3.2 changes to marketing strategy……………………………………………………..16 3.3 expected results……………………………………………………………………...17 3.4 implementation………………………………………………………………………18 3.5 discussion…………………………………………………………………………….19 4. conclusion………………………………………………………………………………19 5. references………………………………………………………………………………21 Executive summary This paper describes the marketing strategies of Accor hotels. They are French owned facilities operating in over five continents. These hotels operate under SBUs with the main one operating in Paris, France. The paper is divided into several sections first offering alternative solutions and then settling for a recommended solution. The first alternative strategy deals with how the hotel can beat the stiff competition it faces to maintain its clientele and attract more. It first evaluates the gap analysis to evaluate the firm’s current situation to know the steps to follow in order to achieve a desired state in future. It looks at the corporate strategy gap, distribution gap and product gap together with various solutions to these gaps. It then looks at the changes in marketing strategy by targeting various marketing elements and their recommendations. Later, it views the expected results if those marketing strategies are implemented, how to implement them and a discussion. The second alternative strategy deals with establishment of a comprehensive computers system to enable a two way conversation with customers. Moreover, it allows customers to book online thus enhancing the hotel’s convenience. It looks at the gap analysis and offers solutions to those gaps, changes to marketing strategy and recommendations. It also looks at the expected results if the marketing strategies are changed, modes of implementation and then offers a discussion to understand the alternative solution better. The recommended strategy advocates for an expansion of the market to attract a wider customer base. In addition, it incorporates the competencies and expertise of customers to retain its competitive advantage. This is by looking at the existing gap, changes in marketing strategies, expected results, mode of implementation and a discussion. At the end of the report, a candid conclusion with a clear conclusion of the recommended conclusion that should be adopted (Aaker, 2009). Alternative Solution 1 (AS1): dealing effectively with competition Accor hotels face stiff competition from various other hotels including intercontinental and Starwood hotels. Thus, one part of marketing strategy is to convince its customers that it offers the best services compared to its competitors. By so doing, the firm will be in a position to maintain its profitability in the market while retaining and attracting more customers. Increasing its competitive advantage in the market will ensure that it remains strong in the market and not risk the point of closure (Aaker & Mills, 2005). Thus, it has to come up with marketing strategies to maintain its competitive advantage in the market. Gap analysis It is used to evaluate the current situation of a firm to know the steps to follow in order to achieve the desired state in future (Cravens & Piercy2009). Corporate strategy gap Current-the hotel offers a wide range of brands in line with the three classes of customers. Thus, it is able to accommodate for every range of individual according to their social status. Desired-the hotel wishes to deal effectively with competition by ensuring that it comes up with a marketing strategy to attract and retain more customers. Thus, it has to improve on all its brands. Product gap Gap: premium gap between the various brands offered Solution: reduce the gap in prices of their brands to make them affordable to all. The price of services offered in luxurious rooms is cheaper compared to the prices offered in luxurious rooms. Distribution gap Gap: though it operates in over five countries, it is mainly located in cities. For instance, it main one is in Paris France thus attracting a huge customer base considering the high level of tourism in Paris. Solution: they should incorporate their SBU’s in other areas not only in cities to attract customers from such areas too. They can consider the income of individuals in that area and consider the brand to introduce in the area. By so doing, they are able to attract customers from all walks of life thus dealing effectively with competition. Accor hotels operate across five continents in SBU’s. Each SBU is responsible for its own profitability with the main one located in pairs France. Though it offers various brands according to the three classes of individuals, they should ensure that the gap of prices between the brands is not that huge. As a result, they may be in a position to deal effectively with competition since other competitors might not follow suit (Chen & Popovich, 2003). However, they should ensure that their prices lead to realization of the set prices to prevent them from losses. At the end of the day, the main aim of every firm other than customer satisfaction is amassing of profits. Changes to marketing strategy It is essential for Accor hotels to make changes to their marketing strategies to achieve the desired success levels. Marketing element recommendation location Increase its number of SBU’s to include more locations even in remote areas. price Establish an affordable pricing for all their clients in all walks of life. They should ensure that the gap in pricing between various brands is not that huge. Targeting Increase the number of targeted population to enhance their profit making. They should increase the number of services and products offered. Product Ensure differentiation of product depending on the set prices. Promotions and branding should distinguish between the prices offered. Broaden the number of products and services offered to broaden their market. promotion Advertising and branding to increase awareness of their products and services Promotion of sales to induce purchase Offering discounted prices to attract more customer base. Expected results AS1is expected to increase the financial position of the hotel, marketing and its human resource: Increased expenditure required to conduct massive advertising, promotion of sales and increased distribution due to a vast geographical location. More personnel required to achieve the required marketing targets by incorporating the marketing strategies in question.\ Increased customer base due to reduced prices and increased number of locations even in remote areas. The short-term margins will be affected by reduced prices. However, this will not be a huge problem due to the reduced cost of operation that will be realized and an increase in the market share. Implementation The successful implementation of the marketing strategy requires that there is a fit between the chosen competitive position of the hotel, marketing strategy, its organizational structure, all its policies and processes. AS1 greatly focuses on offering the best quality services at the best affordable costs. That is why they are willing to offer products differentiation according to the prices offered in each brand (Desarbo, Benedetto, Song, & Sinha, 2005).Thus, they ought to maintain a centralized structure with high levels of formalities and regulation. Each employee in the hotel ought to consider the profit making venture and goal of the hotel in order to achieve the objectives of the hotel. As a result, the hotel should ensure employee satisfaction and motivation. This will in turn be visible in customer satisfaction and operation of the available marketing strategies to this effect. Satisfied customers will ensure that the hotel deals effectively with competition (Russell 2011). Implementation and recommendation Organization structure It’s a functional hotel so a functional organization Business unit autonomy Operates at a moderate to low level Shared programs and synergy It should record a high level of synergy Evaluation and reward system It should operate on market share and incentives based on sales Retrieved from: Datta, 2010; Walker et al., 2012 Discussion AS1 reduces the problem of increased number of competitors for the hotel thus enabling it gain a competitive advantage. Most competitors aim at attracting as many customers as possible and retaining them (Ferrell & Hartline, 2011). That is why it is important for Accor hotels to adopt the best marketing strategies to attract and convince as many customers as possible. AS1 does just that and if Accor hotels choose to adopt it, they will see the benefit of application of a good marketing strategy. Alternative solution 2(AS2): computer system policy With the changing technology levels, Accor hotels should increase its number of computer systems all over its branches. It should ensure that all its branches are connected to Accortel. Moreover, over its 850 hotels should be equipped with Tars on-line including all its sales and call centers. As a result, they will be in a position to get first hand feedback from their clients on the services provided. Moreover, they will be in a position to allow more customers to make reservations online thus increasing the efficiency of the hotel as shown below: 37000 rooms reserved through various central channels at night 82000 visits recorded as visits to the internet sites 11000 consultations made on the internet 120000 emails exchanged This is an excellent move as it shows that their customer s are following and enjoying their services provided. Gap analysis (Hales, 2006) Current- use of broad differentiator defender Desired- use of high level of services differentiation and prices by use of a comprehensive computer system program Resources or competencies gap Gap- they focus on challenging the competitors to gain the required competitive advantage and market share Solution-redirect their currently available resources and competencies towards safeguarding their current position in the market. Usage gap Gap: use of a limited number of computer systems thus not gaining the required feedback from customers Solution- increased number of computer systems to allow a two way conversation between customers and the hotel employees. AS2 allows Accor hotels to use the required modern technology combined with their competencies and resources available to maintain a leadership in the market. They main aim is on realization of profits in line with their set goals and objectives. Changes to marketing strategy table Marketing element elements target Current and potential users of its services Product Continue making modifications of their products and services to include use of a comprehensive computer system to gain customer feedback on the services provided. price Maintain premium prices on their different brands provided. promotion Encourage user interaction or engagement by using a comprehensive computer system. Use of advertising to create awareness of their products and services Use of packages that come with discounted prices for their customers Use of a reward system for a certain amount used in its services and products in the hotel. location Their website Any device that has access to the internet Expected returns Increased level of customer participation and feedback The marketing attention will focus on the existing market share allocation of additional human resource staff for the building up of customer care services attracting and maintaining more customers thus gaining more profits Implementation Implementation of AS2 will see the hotel use more resources in maintaining a comprehensive computer system. However, its end results will be worth it. Through various customer feedback realized, the firm will be in a position to improve on its products and services provided in line with the preferences of the customers. Producing services and products of high quality requires the hotel to maintain a balance between use of formal rules and decentralization. The hotel also needs to motivate its workers to ensure that they deliver high quality services at the point of interaction (Hooley, Nicoulaud, & Piercy, 2011). A product and management organization structure enables the hotel to participate in formal and participative products between its products teams and its functional units in a bid to coordinate its activities and overcome any conflicts available. Implementation recommendations table Organizational structure Product management Business unit autonomy Moderate level Shared programs and synergy Low levels to enable product differentiation Evaluation and reward systems Incentives based on profits and returns made on investments Discussion AS2 focuses on the establishment of a comprehensive computer system to ensure that the hotel receives ample customer feedback. It also enables the hotel to allow for self booking of the available rooms by the customers online. As a result, the hotel will be in a position to amass more profits in the market thus gaining a competitive advantage. The hotel will also require developing excellent customer services thus maintaining or growing from its current market leadership position. It is evident that characteristics of audience can affect revenue through prices of advertisement. Recommended solution RS: expanding their market It is evident that the hotels main aim is to maximize on profits while at the same time maintaining their customers’ satisfaction. That is why the hotels have continued to grow through various mergers and acquisitions since it was founded. The group of hotels should continue expanding its market and coming up with the required products and services of high quality to ensure that they beat competition and also remain high in the market share. By doing so, they will require the usage of aggressive developments in new digital offerings to attract and maintain users in a highly competitive environment. Moreover, they will need to observe the code of conducts of different continents that they establish their hotels in to avoid cultural clash or dealing with political instability that would see them records losses. Gap analysis The alternative solutions enabled the hotel to deal adequately with competition; its RS requires it to combine its skills and competencies to come up with new innovations thus remaining ahead of competitors. Corporate strategy gap Current: competes for market share by offering high quality services and products at affordable prices to attract and retain customers Desired- dominate the market by establishing a comprehensive market expansion plus advanced technology Resources or competencies gap The hotel lacks the required resources and competencies to alleviate its market position. That is why adequate training and employees motivation is required. Product distribution gap Gap: offering services and product to services using a comprehensive computer system Solution: increase their technology to improve on the products and services provided. Usage gap Gap: products and services provided are of high quality though customer feedback is limited Solution: use of a two way conversation between customers and the hotel’s employees to enable realization of the required profits by coming up with products and services in line with the preferences of various customers. Changes to marketing strategies table Marketing element recommendations Target The hotel should target all individual from all walks of life Product Continual modification of products to improve its quality and increase customer base Price Maintain premium prices for all its brands Promotion Sales promotion Use of discounted prices and packages Rewards or loyalty program to ensure that the customer base is maintained and increased. Location Use of the hotel’s website Customers can also book from any internet application device Expected results Increased revenue to enhance customer awareness through advertising and promotions Increased customer base thus gaining more profits More HR services to enable excellent customer care services for customers Increased level of employee motivation and training to increase the level of customer satisfaction. In an overall perspective, the initial capital outlay of the hotel is expected to maintain its leadership in the market. Thus, the growing market share is expected to increase thus increasing the revenue of advertising. The RS marketing is complex and requires adequate advertising, sales promotion and marketing campaigns to create awareness to the consumers. Moreover, the hotel targets three different markets separately. So, the hotel will have to invest heavily on HR and capital investments and ensure development of skills and competencies. Implementation Implementation of the RS will enable the hotel to deal and overtake competition as required. It entails leading the market in identification of new opportunities in the market and launching new products that are in line with the preferences of targeted customers. Implementation recommendations table Organizational structure Matrix organization Business unit autonomy High levels Shared programs and synergy Low levels Evaluation and reward systems Incentives based on Sales and growth of shares The hotel will require to organize its decentralized matrix structure between functional and product management structures. As a result, specialists from all departments in the hotel are required to collaborate coming up with enhanced innovation and quick response to any technical problems observed. They also increase and settle customer demands through increasing the levels of communication and cooperation between various departments in the hotel. Matrix structure for Accor hotels (Lehmann & Winer, 2008). Discussion Accor hotels need to adopt the RS to improve on its market capitalization. Increased and expansion of its market will ensure that it attracts more customers thus dealing effectively with competition. Despite the other alternative strategies advocating for a competitive advantage, recommended strategy advocates for maintaining that competitive advantage. This means providing high quality products and services to customers at an affordable price. Moreover, increased HR and advertising together with promotions will ensure that the company creates awareness to various customers in the market. Conclusion Various marketing strategies advocate for increased customer satisfaction while at the same time maximizing on profits (William, 2008). AS1 addresses the problem of competition and it advocates for measures of dealing with competition to enhance an increase in the market share and maintaining a marketing leadership. Every firm has a sole aim of dealing effectively with competition to maintain a high client base. The higher the number of clients, the higher the amounts of profits amassed by the hotel thus achieving its main objective.AS2 advocates for increased communication between the employees and customers and use of advanced technology to improve the required feedback. As a result, the hotel is in a position to know how their customers perceive their services, and what to change or improve on to maintain customer satisfaction. RS recognizes that a market expansion combined with the required expertise and competencies goes a long way in enabling the company maintain a competitive advantage. However, for this to happen, the hotel will require adequate HR services, promotion and advertising to create awareness to its targeted customers. Moreover, Accor hotels should retain or reduce their premium prices for every brand and ensure that their products are differentiated in accordance with the recommended prices (Zink, 2008). 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