Marketing Audit of Hotel Ibis In Manchester - Essay Example

HOTEL IBIS IN MANCHESTER - MARKETING AUDIT AND MARKETING OBJECTIVES Ibis Hotels as part of the Accor Group Table of contents 0 Introduction 3 2.0 Marketing Audit 3 2.1 Internal Environment of the organization – Strengths and Weaknesses 4 2.2 External Environment of the organization – Opportunities and Threats 6 2.3 Analysis of Results 9 3.0 Marketing Objectives 10 4.0 Conclusion 11 5.0 References 11 1.0 Introduction Competitiveness is one of the key challenges that managers in all industries have to face. In the hospitality sector also the identification of strategies that can secure high market performance can be difficult even in quite strong markets, such as the British market. Current paper explores the marketing objectives of IBIS hotels in Manchester, UK. These objectives are identified after developing a marketing audit, based on the firm’s strengths, weaknesses, opportunities and threats. In other words, the paper shows the potential use of a popular strategic framework, the SWOT analysis, for evaluating a firm’s marketing strategy. SWOT analysis, as a concept, is based on the following rule: an organization is able to increase its competitiveness if it manages to enhance its opportunities/ strengths and to control/ limit its threats and weaknesses (Griffin 2013, p.70). By applying the above rule an organization can secure its competitiveness against its rivals (Griffin 2013, p.70). However, the realization of such plan can be delayed if the conditions in the firm’s internal or external environment are highly turbulent. For this reason, risks and unexpected events should be taken into consideration when developing the SWOT analysis as in this way the accuracy of the relevant findings is increased (Henry 2011, p.60). 2.0 Marketing Audit Marketing audit is the process through which the internal and external environment of an organization are reviewed so that information is gathered for developing the organization’s marketing plan (Kumar and Sharma 2011, p.36). A marketing audit needs to meet two, critical, terms: it should be ‘comprehensive and systematic’ (Kumar and Sharma 2011, p.36) meaning that it should be easily understood, as of its content, and that its phases ‘should follow a specific sequence’ (Kumar and Sharma 2011, p.36). 2.1 Internal Environment of the organization – Strengths and Weaknesses In the context of SWOT analysis strengths denote ‘the capabilities that an organization can use for creating and developing its strategies’ (Griffin 2013, p.70). These capabilities are not standardized; they can vary depending on the characteristics and the demands of the industry involved but also the organization’s financial status (Griffin 2013, p.70). As for weaknesses, the term is used for showing the characteristics/ skills of an organization can set barriers in the achievement of organizational strategies (Griffin 2013, p.71). Both strengths and weaknesses are parts of the internal environment of each organization (Henry 2011, p.60). When evaluating a firm’s strengths and weaknesses of an organization particular emphasis should be given to organizational resources: these resources would be checked, if they are strengths or weaknesses, depending on their potential to be ‘critical success factors’ (Thompson and Martin 2010, p.113), i.e. if they are able to secure the success of the organization or not. When referring to the firm’s strengths, particular reference should be made to the following facts: a) brand name; Ibis hotels belong to the Accor Group. The Group includes a series of popular brands, as indicated in the graph including in the paper’s title page. Also, the Group operates worldwide, in about 92 countries (Accor Group 2014). When having to develop a marketing plan, brand name is a critical criterion of success; most firms have based their worldwide on the popularity of their brands (Fifield 2007, p.478), a practice that has been also followed by the Accor Group. However, in order for brand name to secure the enhancement of business performance it is necessary to be combined with quality, i.e. high standards of services or product quality (Fifield 2007, p.66). As discussed later, in the weaknesses part of this section, Ibis hotel has an important weakness: the level of the organization’s services is not quite high; rather problems have been identified such as the cleaning of rooms and the standards of the rooms’ equipment. Thus, in order for brand name to become a critical advantage for Ibis Hotel, changes should be made on the mechanisms of control in regard to the firm’s standards of services; b) the range of its services is considered as a key strength of the organization; in the specific case the term range of services is used for showing the development of different types of services, such as for example: Ibis Hotels of different standards of services, such as luxury, economy and normal standards; these hotels have different levels of pricing and different levels of service quality (Ibis hotels, organizational website 2014). At this point, the following issue should be addressed: are the various types/ modes of the organization able to meet the standard of services of their category? The answer in this question is negative, since problems seem to exist in regard to the firm’s budget hotels, such as that in Manchester, as proved in the research developed by BBC News in 2009, see in the weaknesses part of this section. Therefore, the range of services is one of the firm’s strengths but it should be combined with quality of services, as related to the category of each organizational mode; c) In regard to the firm’s weaknesses, emphasis should be given to the following facts: a) the quality of the organization’s services is not standardized at high levels; indeed, the review of the chain’s hotel in Wembley revealed the lack of accurate guidelines in the map available in the organization’s website (Clark and Gordon 2014, par.25); new customers who try to reach one of the chain’s hotels may decide, at the end, to prefer another brand, especially if they are not able to spend a lot of time in searching for a hotel of Ibis brand; b) the pricing of the firm’s services is rather high, compared to other brands of the same category (Clark and Gordon 2014, par.26). Indeed, in a research made for checking the firm’s offers across UK the findings were disappointing: it seems that the prices of the firm’s hotels are standardized, meaning that offers are not used as a strategy for attracting more customers or for securing existing customer base (Clark and Gordon 2014, par.26); c) quality of services; according to an article published in 2009 by BBC News mould was identified in a room of the ‘Ibis Hotel in Manchester, Charles street’ (BBC News 2009, par.8). The mould had been developed in a mattress, a fact that had set the health of guests in severe threat (BBC News 2009, par.8). The hygiene issues related to the firm’s hotel in Manchester can be considered as a critical organizational weakness because of the following fact: the health and safety of visitors are the most important terms that a hotel needs to meet in order to secure its market position. In addition, violating the rules related to the health and safety of guests a hotel set in risk not only its market image but also its financial position: if the case is brought before the courts it is expected that the hotel’s customers will be fully compensated for the risk to which they had been exposed. 2.2 External Environment of the organization – Opportunities and Threats In the external environment of Ibis Hotels three, critical, opportunities can be identified: a) the UK economy is quite strong. In an article published by BBC News in 2013 emphasis is given to the increase of the country’s GDP by ‘0.7% between April and June’ (BBC News 2013, par.3). It is noted that this performance is the highest since 2010, indicating the important perspectives of the UK economy for further growth. The services sector of the UK economy has been increased by a percentage of 0.4%, compared to the period before the 2008 recession (BBC News 2013, par.10). The growth of this sector, where the hospitality industry belongs, is encouraging if taking into consideration the severe turbulences that have occurred in the European, and the global, market from 2008 onwards. In fact, the global crisis of 2008 has also affected the UK economy which is today recovered by ‘four/fifths of the fall of GDP’ (Monaghan 2014, par.8). In any case, in 2013 the performance of the UK economy has been at the highest level since 2007 leading to the assumption that the effects of the 2008 recession on the UK economy have been effectively controlled (BBC News 2014, par.2); b) the hospitality industry of UK is continuously developed; the industry’s prospects for significant growth are many; London seems to be the part of UK that performs higher in regard to the specific sector: in London the occupancy of hotels reached the 81% in 2013 (PWC 2014, par.2), while in province the pressures on hotels’ performance are strong. However, from 2014 the prospects for the hotels of UK’s province seem to be important, indicating a continuous growth of the sector despite the low profits of the recession period (PWC 2014, par.2); c) In UK, as also in other countries worldwide, the demand for hotels that promote innovation has been increased. In the specific industry, innovation is related mostly to the technology available to customers, such as wireless Internet in rooms/ options for telecommuting, options for offices/ working areas and so on (Deloitte 2012). Innovation in the hotel industry also refers to rooms’ decoration, so that rooms’ functionality becomes quite high (Deloitte 2012). According to a report published by the Economic and Social Research Council innovation is a critical part of the strategy of hotels in UK (Economic and Social Research Council 2012). In the above report it is explained that innovation in the hospitality industry is related to ‘the introduction of different hotel types, such as economy hotels’ (Economic and Social Research Council 2012, par.4) but also to the design of hotels and the promotion of sustainability (Economic and Social Research Council 2012, par.4-5). Ibis hotels, as it can also be checked through the organizational website, highly focuses on innovation, both in regard to the customer services and the structure/ design of its hotels (Ibis hotels 2014). However, problems have not been avoided, as indicated in the section describing the organization’s internal environment, especially the section referring to organizational weaknesses. At the same time, reference should be made to the threats related to the hospitality industry of UK: a) competition in the UK Hospitality industry is strong. Existing chains try to keep their performance at high levels even by employing strategies that are not fully aligned with existing laws. Reference can be made, as an example, to the following case: in 2012 the Office of Fair Trade made a research for exploring the terms of the cooperation between the InterContinental Group and the firms Booking.com and Expedia (BBC News 2012, par.3). The research led to the assumption that the practices used by the above firms had violated the rules of competition law (BBC News 2012, par.4); b) despite its growth, the hospitality industry of UK has not managed to secure its profitability, a problem related mostly to the 2008 recession. Indeed, from 2009 to 2012 the profits of the firms operating in the hospitality industry of UK were decreased (Blitz 2013, par.2). This phenomenon showed the industry’s exposure to market turbulences. It also made clear that the hospitality industry of UK is not prepared to face severe market pressures, meaning that the strategies used by the industry’s firms are not fully aligned with the market trends. This fact should be taken into consideration when setting these firms’ marketing objectives; c) The UK hotel industry is quite attractive, a fact that has been related to its profitability but also its important prospects for future growth; currently, the hotels of UK have been estimated to 12,600 (Blitz 2013, par.9); in 2013 and 2014 about 200 new hotels are expected to be added in the industry’s total units (Blitz 2013, par.9). 2.3 Analysis of Results The findings of SWOT analysis are critical for identifying an effective business strategy. In fact, through SWOT analysis a firm can realize its weaknesses and threats; at the next level, the firm can identify measures for limiting weaknesses and threats so that organizational performance is enhanced (Bamford and West 2010, p.138). The findings of the SWOT analysis related to IBIS Hotels are presented in the Table in Figure 1 below. Strengths 1. Quite strong brand name 2. Range of services 3. Promotion of innovation Weaknesses 1. Key issues of customer support, such as accurate directions for new customers, are often ignored 2. Lack of offers/ prices are standardized 3. Important problems in regard to the quality of customer services Opportunities 1. The UK economy is strong 2. The Hotel industry of UK performs high 3. The demand for hotels that promote innovation is continuously increased Threats 1. Competition in the industry is strong 2. Profits are not standardized 3. New entries have become a common phenomenon 3.0 Marketing Objectives The marketing objectives of an organization can be understood by checking carefully the findings of the marketing audit (Payne and McDonald 2012, p.79). Indeed, a detailed marketing audit can help to limit risks when designing a marketing plan (Baker 2012, p.91). In general, marketing objectives should be ‘expressed in market and products terms’ (Fifield 2007, p.177). In addition, marketing objectives should meet the following criteria: a) they should not be quite simple; rather they should be complex responding to the different sectors/ services of the organization involved; b) they should be set at ‘an hierarchical order’ (Fifield 2007, p.177); the most important marketing objective should be set at the highest position in the relevant hierarchy. According to the above, the marketing objectives of Ibis Hotels should refer to the following issues: a) improvement of marketing communication; emphasis should be given to social media, as a tool for communicating with customers; also, additional communication techniques, such as events in educational or recreational areas, should be used for improving the firm’s communication with its customers, b) improving of pricing; the firm’s existing prices are standardized; offers should be included as a marketing technique, so that more customers are attracted; this practice would be involved in all types of the organization, including its luxury brand but also its budget brand; c) improving of customer services; increasing the investment made on customer services would help to the improvement of the firm’s brand name; the quality of customer services should be incorporated in the firm’s marketing plan, as a criterion of long term success. 4.0 Conclusion The success of the Ibis Hotel in the hospitality industry of UK is depended on a series of criteria. The firm is part of a quite strong international Group, the Accor Group, and has a strong brand name. However, these organizational characteristics are not adequate for securing the firm’s profitability. This means that the existing marketing objectives of the organization should be re-organized and updated setting different priorities: primarily emphasis should be given to the communication with customer so that his needs are understood and used for improving the quality of customer services. The problems identified in the firm’s performance can be related to the lack of an effective marketing strategy: instead of emphasizing on the development of the range of services and the expansion in the market the firm should focus on the improvement of its existing units. Availability of rooms and range of services should be combined with the quality of services so that the firm to be benefited, in terms of profits. In regard to the above the following fact should be highlighted: the firm’s current marketing strategies are aligned with current market trends; still, marketing is not just a means for increasing profits at a temporary basis but rather a mechanism for establishing a proactive communication with customers. Understanding customer expectations and needs should be the organization’s key priority when developing its marketing strategy; otherwise the standardization of the firm’s performance could not be achieved. 5.0 References Accor, 2014. Organizational website. Available at http://www.accor.com/en/group/accor-company-profile.html [Accessed at 20 March 2014] Baker, M., 2012. The Marketing Book. 5th ed. London: Routledge. Bamford, C. and West, P., 2010. Strategic Management : value creation, sustaínability, and performance. Belmont: Cengage Learning. BBC News, 2012. ‘Online hotel deals broke law, says OFT.’ July 31, 2012. Available at http://www.bbc.com/news/business-19060712 [Accessed at 20 March 2014] BBC News, 2014. ‘Economy tracker: GDP.’ January 28, 2014. Available at http://www.bbc.com/news/10613201 [Accessed at 20 March 2014] BBC News, 2013. ‘UK GDP: Fastest growth for three years.’ October 25, 2013. Available at http://www.bbc.com/news/business-24668687 [Accessed at 20 March 2014] BBC News, 2009. ‘Dirty budget hotels criticized.’ Jan 6, 2009. Available at http://news.bbc.co.uk/2/hi/uk_news/england/london/7812960.stm [Accessed at 20 March 2014] Blitz, R., 2013. ‘UK hotels emerge from depression. ‘ Sep 9, 2013. Financial Times. Available at http://www.ft.com/cms/s/0/a3e9b6f0-1968-11e3-83b9-00144feab7de.html#axzz2wWJ4E6kx [Accessed at 20 March 2014] Clark, T. and Gordon, S., 2014. ‘Budget hotels: The lowdown on going low cost.’ Daily Mail. Available at http://www.dailymail.co.uk/travel/article-617180/Budget-hotels-The-lowdown-going-low-cost.html Deloitte, 2012. UK Hotel Performance and Investment. Brighter skies ahead? December 2012. Available at https://www.deloitte.com/assets/Dcom-UnitedKingdom/Local%20Assets/Documents/Industries/Consumer%20Business/uk-cb-brighter-skies-ahead.pdf [Accessed at 20 March 2014] Economic and Social Research Council [ESRC], 2012. ‘UK hotel industry alive with innovation.’ Available at http://www.esrc.ac.uk/news-and-events/press-releases/22337/uk-hotel-industry-alive-with-innovation.aspx [Accessed at 20 March 2014] Fifield, P. (2007) Marketing Strategy, 3rd Edition, Oxford: Butterworth-Heinemann Ltd Griffin, R., 2013. Fundamentals of Management. 7th ed. Belmont: Cengage Learning. Henry, A., 2011. Understanding Strategic Management. Oxford: Oxford University Press. IBIS Hotel, 2014. Organizational website. Available at http://www.ibis.com/gb/booking/hotels-list.shtml [Accessed at 20 March 2014] Kumar, R. and Sharma, V., 2011. Auditing: Principles and Practice. 2nd ed. Delhi: PHI Learning Pvt. Ltd. Monaghan, A., 2014. ‘UK economic growth figures: what the economists say.’ January 28, 2014. The Guardian. Available at http://www.theguardian.com/business/2014/jan/28/uk-economic-growth-what-economists-say [Accessed at 20 March 2014] Payne, A. and McDonald, M., 2012. Marketing Planning for Services. London: Routledge. Piercy, N. (2009) Market-Led Strategic change,4th edition, Oxford: Butterworth-Heinemann Ltd. PWC, 2014. UK Hotels Forecast 2014. Available at http://www.pwc.co.uk/hospitality-leisure/uk-hotels-forecast/overview-2014-confidence-returns-at-last.jhtml [Accessed at 20 March 2014] Thompson, J. and Martin, F., 2010. Strategic Management: Awareness & Change. Belmont: Cengage Learning. Read More