Evaluation of the Marketing Environment Analysis for Haymarket Hotel London - Case Study Example

EVALUATION OF THE MARKETING ENVIRONMENT ANALYSIS FOR HAYMARKET HOTEL LONDON AND ANALYSIS OF AVALABLE MARKET SEGMENTS AND EXISTING TARGET MARKETS Name Course Tutor Date Table of Contents Table of Contents 2 Executive Summary 3 Introduction 4 SWOT Analysis of Haymarket Hotel 4 Strengths 5 Hotel Organization Structure 5 Location 6 Hotel Facilities and Services 6 Customer Satisfaction 7 Image and Reputation 7 Weakness 8 Shortage of Staff 8 Parking Problem 8 Opportunities 9 New Products and Services 9 New Markets 9 Threats 10 Strategic Position 10 Possible Strategic directions Haymarket Hotel in London 11 Market Analysis 11 Available Market Segments for Haymarket Hotel 11 Consumer Decision Making Process 13 Related Theories in the Hospitality Buyer Behavior and Satisfaction 13 The Theory of Buyer Behavior 14 Consumer Decision Model 14 Prospect Theory 14 A New Market For the future of the organization 15 Conclusion 16 Bibliography 17 Executive Summary The report is divided into sections that have various topics and subtopics. The introduction section gives an outline of the report and what it will discuss. It also presents a brief overview of the organization. The SWOT analysis section gives a complete analysis of the internal and external environments of the hotel. The market analysis section gives a picture of the available target markets for the organization. The consumer decision making process in tandem with tourism and hospitality consumers is looked into and relevant theories explaining the process elaborated. Lastly, the report recommends some new markets that the hotel should consider venturing into and gives a conclusion. Introduction Haymarket is located next to Haymarket theatre. The hotel is accessible by the road and is close to Suffolk Place and Haymarket streets. The hotel is a tourist destination in London and ranked one of the best players in the Hospitality and Tourism Sector. The hotel offers a variety of services from afternoon tea, lunch, dinner, accommodation, weddings ad concierge, gift shop, and swimming pool facilities ("Firmdale Hotels - Haymarket Hotel," 2014). The hotel has a manager who is assisted in leadership by deputy managers and heads of departments. This report will evaluate the marketing environment for Haymarket Hotel in London as a major player in the tourism and hospitality industry. The report also analyses the available as well new markets for the hotel. This report will do this through analyzing the hotel based on its strengths, weaknesses, opportunities and threats. At the end the report will recommend some of the new markets the hotel should consider venturing into. SWOT Analysis of Haymarket Hotel To clearly evaluate the internal, external and competitive environments of Haymarket Hotel it would be prudent to conduct a SWOT analysis. SWOT is an acronym of Strength, Weakness, Opportunity, and Threat. Defined as the critical evaluation and examination of the organizations internal strengths and weaknesses, opportunities for growth, and threats posed by an organization’s external environments, is a precursor of strategic planning. The first two evaluate the internal environment while opportunity and threat evaluate the external environments. Strengths Strengths refer to the positive and distinctive aspects that make the organization have a competitive advantage in the competition prone market. Some of the most essential strengths a tourist and hospitality organization such as Haymarket Hotel can build and develop include: financial resources, assets, managerial proficiency, human resource, brand and image (Clark & Nixon, 2014)., structure of operations, and reputation. These attributes make the customers remain loyal to the organization no matter the situation in the market. Below are some strengths of Haymarket Hotel. Hotel Organization Structure Haymarket Hotel’s organization structure makes it easy to divide tasks within the organization and its branches, place the authority in place and ensure the best services ("Haymarket Hotel (London, UK) | Design Hotels™," 2014). Being in the service industry the hotel has a manager and deputy managers as well as heads of various departments that make the flow of work in the organization smooth. The workers are well managed and so are the services offered. Location The hotel is very accessible through the road. Additionally, its close proximity to London Heathrow Airport, makes it more accessible for tourists who come to have fun in the United Kingdom specifically London. The hotel is situated strategically at the center of London’s theatre district that is near Suffolk Place and Haymarket in London ("Firmdale Hotels - Haymarket Hotel," 2014). The hotel neighbors with Haymarket theatre Royal as well as Regent, Mayfair and Jermyn Streets that provide ideal shopping centers for the customers. Additionally, the National Gallery and Trafalgar Square are at a walking distance a few miles away from the hotel. The hotel also has close proximity to London’s financial center as well as the James’s Park ("Firmdale Hotels - Haymarket Hotel," 2014). Hotel Facilities and Services Haymarket Hotel has a 24/7 room service, Concierge and wedding services, guest drawing room for art lovers, restaurant and bar, DVD library, Body and beauty treatment rooms, swimming pools. The general facilities take care of any customer who wishes to enjoy their services. The facilities are also accessible to the physically challenged individuals. This shows that all the customers are catered for. The entertainment facilities are superb ("Haymarket Hotel (London, UK) | Design Hotels™," 2014). The hotel also has babysitting services, children bathrobes and toiletries, children books, sofa beds, children’s menu, for customers who wish to enjoy the services and stay in London with their families. The hotel also provides transport for customers who would wish to have such services. Additional amenities include Valet parking, gift shops, and iPod docking station, bath tubs, and Wi-Fi as well as a sauna ("Haymarket Hotel (London, UK) | Design Hotels™," 2014). The hotel does not permit smoking inside the rooms. Customer Satisfaction The amenities listed above are of the latest technology available in the market. The staff at Haymarket Hotel is committed to offering the best services to their customers. In case a customer is not satisfied with the services offered adjustments can be made so as to meet their individual need ("Haymarket Hotel (London, UK) | Design Hotels™," 2014). To ensure that the customers enjoy their stay, the hotel has invested in an online platform where the customers can be able to review the facilities and services prior to their visit. There are services that can be arranged upon request. This includes wedding and concierge services ("Firmdale Hotels - Haymarket Hotel," 2014). Image and Reputation Haymarket hotel has a good image and reputation in London. This is based on the quality and variety of services offered. Additionally, the management of the hotel is also constantly trying to come up with the best strategies so as to ensure that the customers are satisfied. The hotel has invested in social media marketing ("Haymarket Hotel (London, UK) | Design Hotels™," 2014). This is done in all social platforms making almost every potential customer aware of the services that are offered in the hotel. The hotel also boasts of a good online booking system that is conducted by a variety of contracted companies through their websites. Teaming up with some of the best travel sites in UK positions the hotel better compared to its peers in the industry ("Firmdale Hotels - Haymarket Hotel," 2014). Weakness Weaknesses refer to organizational factors such as skills, resources, reputation and expertise, that need to be corrected so that the organization can minimize their effect and become stable in the market (Clark & Nixon, 2014).. These weaknesses hinder the full achievement of set objectives or goals. There are a few weaknesses in consideration of Haymarket Hotel. Shortage of Staff The hotel serves a lot of customers. This means that the customer in the hotel is likely to experience some delay in the services (Clark & Nixon, 2014). Since there are 24 hour services, some of the staff is highly likely to go after the highest bidders (Clark & Nixon, 2014).. Parking Problem The car parks must be manned to ensure that one does not park more than the time allotted. The hotel is also close to other facilities in London, thus parking is limited. Additionally, customers who come to enjoy short term services like lunch and tea sessions are likely to clog the facility causing a lot of human traffic (Clark & Nixon, 2014). Competitors The tourist and hospitality industry experiences a lot of competition being that the market is very dynamic. As such the hotel also has experiences its effect (Clark & Nixon, 2014). There are very many hotels ranked top in London that also offers the same services as Haymarket Hotel ("Firmdale Hotels - Haymarket Hotel," 2014). Some of the greatest competitors include: The Ritz Hotel, The Savoy Hotel, Euro Hotel and 1880 hotels. These are just but a few hotels that also offer the same services as Haymarket ("Firmdale Hotels - Haymarket Hotel," 2014). Opportunities The opportunities are favorable situations that arise from the nature of the environmental changes that create chances to offer new or already established, services and facilities. These opportunities can be classified according to the attractions they bring and margins of success. New Products and Services Tourism and hotels industry is very dynamic in terms of the needs of the customers. This means that there is an opportunity to come up with new products and services that suite the customer demands (Clark & Nixon, 2014). Being that Haymarket Hotel has technologically advanced facilities, it should engage the services that ensure these resources are fully explored. The services the company should consider introducing are pet care services, free transport from the airports, trains and bus stations, personal gym trainers, and specialized services for willing customers, that are enjoyed by a large number of customers (Sirakaya & Woodside, 2004). New Markets The hotel should also consider entry into new markets. Most of the Generation Y consumers have high prospects of being customers to such large hotels (Sirakaya & Woodside, 2004). This means that the company should consider opening up in other cities in the apart from UK alone. They should also consider going global into places that are liked by tourists. They might also consider introducing air caterings to ensure that they serve clients who travel far and wide. Threats Threats refer to external or internal conditions in the organization that are likely to hinder it from achieving the set objectives. They can be classified based on the seriousness. Generally, all over the world the threats to tourism and hospitality are the same (Clark & Nixon, 2014).. These may include competition, regulations of the government, low seasons and Insecurity specifically terrorism (Sirakaya & Woodside, 2004). Additionally, some weather conditions are likely to hinder the inflow of visitors into the facilities. This includes winter seasons (Sirakaya & Woodside, 2004). Strategic Position The SWOT analysis reveals the hotel’s position in the market to be good. However, to beat its closest competitors the hotel needs to consider an alternative strategy. To penetrate the market further, the hotel should introduce new services such as gaming. For example, volleyball, horse riding, hockey, table and lawn tennis. This is to take care of the rising demand of the consumers in the tourism and hospitality industry to enjoy these services (Okumus, Altinay, & Chathoth, 2010). The hotel should also diversify its services to meet all the customer needs. For example, being that the facilities are in place they should employ personal trainers so as to take care of those who may like to enjoy the services, but lack the knowhow, luring more customers (Saito, 2009). Possible Strategic directions Haymarket Hotel in London The company should consider capitalizing on its strengths and opportunities to remain vibrant in the market. The marketing mix of the company should be tweaked after a careful research (Okumus, Altinay, & Chathoth, 2010). Some of the areas that the company should ensure it does exemplary well include management of the staff; that can be made possible through offering leadership courses to the management team, promotion of the hotel services through a well established website that reflects the hotel’s location and in-depth information (Okumus, Altinay, & Chathoth, 2010). The company should also make known to the consumers its mission and visions that can be a branding move. This will not only position the hotel, but also advertise it further. The employees should also be motivated in the best ways possible (Okumus, Altinay, & Chathoth, 2010). The cost of services should also be flexible and fair to take care of all forms of consumers who are likely to visit the hotel. Market Analysis Available Market Segments for Haymarket Hotel Market segmentation is one of the cornerstones of the modern day marketing. It is one of the most important strategies that aids in bridging the gap between diverse customer needs and the available business resources. It can be defined as the process of dividing the whole target market into individual subsets of consumers, business or regions, having a unique and common priority or needs and then designing and implementing strategies that will target the subsets (McDonald & Dunbar, 2012). The theoretical models of market segmentation include segmentation based on demographics, psychographics, behavioral and geographical locations. The above criteria of segmentation give the difference in the needs of the customers (McDonald & Dunbar, 2012). Considering the market segmentation criteria, the most potent target markets for Haymarket Hotel would be people of almost any age. First off, the facilities take care of both old and young. The hotel therefore should be targeting families who come on vacation and tourism in the UK. Secondly, the affluent also like holding their meetings in posh places, making it the best place to target. For this matter the potent market is the corporate organizations who are expecting to use the conference facilities as well as other facilities for bonding and team building activities. Thirdly, the other market is also the working class who get married. The wedding services at the hotel would meet their demands. Generally, most of the consumers of the current tourist and hospitality services and goods are the Generation Y consumers, who are of the middle income in the society (Clark & Nixon, 2014). Due to the hotels close proximity to the theatre most artists almost of any age will be the best market for the services at the hotel. This is again supported by the facilities that are in the hotel. Lastly, the largest segment would be travelers who move around to do a lot of tourism and shopping. The hotel is very near to the shopping streets of London as well as the financial district. The above segmentation is demographic based. This is because it is the most popular criterion of segmenting a market to identify the customer groups (McDonald & Dunbar, 2012). The hotel also offers services that are behavior linked. This includes certain occasions that only come once in a while. The best target market, especially in seasons such as valentine day is the couples especially those of the middle income. As seen in the strengths section the hotel offers Valentine’s Day services. Consumer Decision Making Process Related Theories in the Hospitality Buyer Behavior and Satisfaction The theories that explain the consumer decision making process make an assumption that the consumers’ decision to purchase goods or services consists of steps (Bray, 2009). Bray (2009) further notices that in some cases, this does not hold any water because some stages have to be left out depending on the good or service in question. Most scholars have researched the consumers decision making process coming up with a variety of theories that can be used to explain the decision making process. Available literature suggests that for several years ago, economists have been examining this important topic in marketing (Bray, 2009). The confounding theory is the theory of expected utility. This theory proposes that the consumers’ decisions are based on the expected outcomes of the same decisions. In this manner the consumers are viewed as egocentric individuals. Some other proposed theories that may explain the decision making process in tourism and hospitality industry include theory of reasoned action, theory of planned behavior, prospect theory and theory of buyer behavior (Richarme, 2005). The Theory of Buyer Behavior This theory presents a complicated integration of a variety of psychological, social and marketing influences on customers’ choice of what they exactly want. The customer is likely to look into more information about the services being offered by the organization prior to buying. This will be based upon culture, importance of the goods or services to the buyer, social class, financial status, and inhibitors (Richarme, 2005). The ultimate decision will be made when all the above reconcile with the consumer’s attitude comprehension, attention and intentions. In tourism and hospitality sector, travel decisions have to be made, meaning that the customer will carefully evaluate the organization prior to making any booking (Sirakaya & Woodside, 2004). Consumer Decision Model This paradigm is similar to the theory of planned behavior, only differing in its variables. The model involves a seven model step format. It is highly likely to be implemented by customers who are willing to enjoy a particular tourist and hospitality organizations services. First off, there is recognition of the organization, then further researching on it both internally and externally, comparison of the organization with its peers, purchase of the products and booking in this case, reflection on the purchase or booking and then finally investment. Prospect Theory The rise of social media and the internet in general has made it possible for consumers to review a given product or service as well as organizations and companies. As such those who have not enjoyed the service will see the value of going there themselves and experiencing instead of being told (Richarme, 2005). Most tourists are bound to make decisions in this manner. Part of this theory is the model of satisfaction, where and when the consumers arrive at what they specifically want they stop the decision making process (Sirakaya & Woodside, 2004). Unlike in the utility theory where the consumers would conduct a general information search on a variety of organizations, in satisfaction model the consumer evaluates only those they suspect or expect to have their requirements. A New Market For the future of the organization The tourist and hospitality industry is very diverse and dynamic. This is in line with the customer demands that keep on improving. Haymarket should consider the internet as its largest market. With the advancement in technology, the world has become a global village. Through proper marketing strategies such as advertisements, database and email marketing, and social media marketing among others, the organization should garner more customers into its existing loyal customer list (Chaffey, 2010; Clark & Nixon, 2014). Corporate institutions also present a new market for the organization. Most corporate institutions can be invited being that they are forever accessible via their websites (Chaffey, 2010). Team building and bonding activities are just but a few areas that can be explored by such customers (Singh, 2010). Lastly, the sport teams, London is known for its richness in sports management companies and trainers. This is the best market to target through the introduction of facilities that would lure such customers into the hotel. Other new markets include education institutions and churches for seminars and hall activities (Singh, 2010). Conclusion The SWOT analysis of Haymarket Hotel in London reveals a lot about the hospitality and tourism industry. The company has a myriad of strengths that, if maintained, it can do well both locally and globally, competing favorably with its peers. The opportunities should be explored to the maximum to ensure high returns as well as positioning of the hotel’s brand. There are theories that govern the consumer decision making process as observed. After careful analysis of the consumer behavior in reference to decision making, it is clear that the market is very diverse yet has a very good basis of being explored. To remain the choice by most tourists the hotel should come up with effective strategies to enter the new markets identified, develop the existing market, expand into other markets and dominate the market. Bibliography Bray, J. (2009). Consumer Behaviour Theory: Approaches and Models. Retrieved from http://eprints.bournemouth.ac.uk/10107/1/Consumer_Behaviour_Theory_-_Approaches_%26_Models.pdf Chaffey, D. (2010). Online marketplace analysis. London: Henry Stewart Talks. Clark, N., & Nixon, C. (2014). Professional services marketing handbook: How to build relationships, grow your firm and become a client champion. Firmdale Hotels - Haymarket Hotel. (2014). Retrieved from https://www.firmdalehotels.com/hotels/london/haymarket-hotel/ Haymarket Hotel (London, UK) | Design Hotels™. (2014). Retrieved from https://www.designhotels.com/hotels/united-kingdom/london/haymarket-hotel McDonald, M., & Dunbar, I. (2012). Market segmentation: How to do it, how to profit from it. Amsterdam: Elsevier/Butterworth-Heinemann. Okumus, F., Altinay, L., & Chathoth, P. (2010). Strategic management for hospitality and tourism. Amsterdam: Butterworth-Heinemann. Richarme, M. (2005). Consumer Decision-Making Models, Strategies, and Theories, Oh My! Retrieved from http://www.decisionanalyst.com/Downloads/ConsumerDecisionMaking.pdf Singh, S. (2010). Handbook of business practices and growth in emerging markets. Hackensack, NJ: World Scientific. Sirakaya, E. & Woodside, G.A. 2004. Building and testing theories of decision making by travelers, Tourism Management, 26(2), 815-832. Read More