Marriott is an American multinational hospitality company headquartered at Bethesda, Maryland in Washington D.C. The hotel is having more than 6500 properties across 127 countries. The company manages a broad portfolio of hotels and lodging facilities. Marriott continuously creates extraordinary experiences for the guests. The hotel generates strong economic returns for the owners and franchisees. Marriott provides better career opportunities to the associates. It acquired Starwood hotels and resorts in 2016. It is the one of the biggest opportunity of the Marriott and makes the largest and global lodging company worldwide. Marriott puts people first and pursue excellence in it’s core values.
Marriott practices multi stage segmentation. It have personalized it’s brands to cater to unique target markets. The hotel targets middle upper age customers, professionals, business travellers and families. The hotel keeps on updating it’s market segmentation strategy. For instance, recently, it was targeting football fans who are Visa card holders. They were entitled to get a $20 Visa gift card and combo snack pack. The luxury hotels of the Marriott can be found in the metropolitan cities such as London, Paris, LA and NYC. Marriott have portfolio of brands such as Residence Inn, Courtyard, Fairfield Inn & Suites, Spring Hill Suites and Towne Place Suites. The Fairfield Inn & Suites have business centres connected with internet and printing facilities. It also provides free Wi-Fi in public spaces. The rooms have access to high speed internet and are well-lit. Marriott is committed to service excellence.
The Marriott has effectively built up target market by pointing the needs of the customers. The business positioning strategy of the Marriott can be understood by the points given below:
Marriott believes that the customers vary in willingness to pay for different levels of ease and luxury. It is the motive that hotel created a tier of various style hotels which varies from price to facilities in order to meet want and need of the customers. The company have approximately 3.747 properties, 14 brands in 72 countries. The hotel covers luxury, seasoned, high income and business professionals. It also covers business travellers, middle class and young business professionals. Marriott segments on the basis of the factors given below:
Geographic: The hotels of the Marriott group are dispersed geographically. The luxury hotels are in the metropolitan cities of all the countries. For instance, the hotel has branches in London, NYC, Paris and LA.
Demographics: The demographics undertake revenue, religion, culture and education. The chains of the hotels are in the particular areas depending on the necessities and wants of the consumers. There is tier for every income group in the Marriott organization (Aliouche & Schlentrich, 2011). The hotel also offers different services for different age groups.
Behavioural: The behavioural segmentation is done on the basis of brand loyalty, habit, status and benefits. Marriott proposes reward program includes free nights, advancements and third party promotions in order to charm it’s loyal customers (Rogerson, 2011).
Psychographics: This segment focuses on the lifestyle of the customers. For example, a jet setter residing in Beverly Hills will like to stay in the accommodations that they are used to. They will prefer to pick JW Marriott over a Fairfield to fulfil their needs.
Marriott makes use of marketing mix and promotional tools in it’s marketing and promotion strategy.
The marketing mix of Marriott covers product, price, place and promotion.
Product: Marriott is one of the leading luxury hotel chains in the world. The products of the Marriott are in the form of hospitality services. The services of the company are divided in three parts, core, actual and augmented. It includes different services such as hotels, resorts, hospitality management, accommodations and more (Alon, Ni & Wang, 2012). The maximum revenue is generated from it’s hotels segment. The hotels are categorized into various brands such as St. Regis, JW Marriott, Bulgari, Le Meriden, Westin, Renaissance hotels, Courtyard, Four points and many more. The JW Marriott, a sub brand of Marriott international is designed to target customers who seek for the luxurious atmosphere. The hotel mostly targets the person above 30 who earn higher income and usually travel for the business purpose.
Price: The price of Marriott varies with the hotels, customers and the location. The main motive of the hotel is to provide right product at the appropriate price. Marriott decides the prices of the hotels by maintaining the value with the quality context. It helps Marriott in the maximization of the revenue (Lin, et. l. 2016). The prices of the hotel vary as per the demand of the customers and to maintain cost incurred in the promotions and maintenance. The hotel follows competitive price strategy as per the changing situations and competitor’s behaviour.
Place: Marriott has setup itself in over 120 countries and the hotels are sited in different places across the city such as near airports, freeways and the famous markets. The hotel has embraced a mix channel strategy which includes both direct channel and 3 party channel. The hotel has specific tiers market where it targets the customers directly or with the help of the third parties known as intermediaries. It generally targets to the younger generation of professionals and travellers.
Promotion: Marriott concentrates on the digital upgrade of it’s products. Marriott is an global brand and has created a website which represents products in a comprehensive manner. The website permits users to book rooms in the hotels with an ease. The company make use of different advertisements, videos and campaigns as part of promotional tools on the various social media platforms (Lee & Lee, 2017).
The retailing and merchandising are the two techniques which are used by the Marriott to promote sales. Both are parts of the marketing mix. Retailing takes place when the customers select products and completes the purchasing transaction. Marriott makes use of retailing to sell rooms. The sales are mostly completed online although the booking can be made directly at hotels. Marriott makes use of techniques in the retail selling such as the hotel provides great choice to the customers before making a final decision. For instance, the customers are provided free breakfast and Wi-Fi along with the stay (Cai & Hobson, 2004).
Merchandising is used by Marriott in presenting products on it’s website in a way to influence buying decision of the customers. The hotel even makes use of external merchandising to maximize customer’s value. The hotels and services are reflected in such a way on the website that it helps in enhancing sales and influences customers to spend more on the services of the hotel. The external merchandising is divided into three parts, mass, personalized and segmented merchandising. The selling of merchandise in large quantitate to a group of people is known as mass merchandising. This strategy is used by the Marriott to target every guest by providing same types of products and services at appropriate price (Lee, 2008). The personalized merchandising is the most cost effective means. The hotel can increase it’s revenue by understanding the needs of the customers. The segmented merchandising develops catalogues for the different guests in order to meet their need as per their interest.
Marriott offers matchless choice for the guests and incomparable worth for owners. It drives efficiency and a clear competitive advantage. The unique selling proposition of Marriott is global market leadership. The high brand recognition has helped Marriott to gain core competency through quality customer service. It tailors to the different demographics. The innovative technologies are used by the Marriott in meeting customer experiences (Knutson, 2017).
The hotel has attained capability by attentive guest care, in-depth local knowledge, amenities and the excellent loyalty programs. The hotel provides electronic check-in and online booking facilities. It makes you live like local and provides you home away from home (Sr & Croes, 2003).
Marriott is a global franchisor and operator of hotels and operates under various brand names. It has gained competitive advantage by generic competitive advantage.
Cost leadership: Marriott has various brands which aim to target price sensitive consumers. The brands like Springhill Suites and Courtyard targets upper modest price sensitive consumers. Whereas Fairfield Inn targets lower modest price tier. The hotel has effective cost production which permits to charge low prices compared to it’s opponents. Marriott strives to keep low costs along with securing reasonable profits (Uggla, 2017). It caters broad range of customers and provides comfortable rooms and exceptional services. The hotel has been capable to lower operating costs by several ways such as green buildings, waste reduction and greener supply chains.
Focus: Marriott is a worldwide franchisor which was made possible due to the focus of the hotel on the various segments. It covers customers of different classes. The hotel has provided options for the customers from basic to the luxury hotels. Marriott also have focussed on the localities such as where customers like to stay such as highways, famous markets and in the hill areas. The hotel focuses on innovation and tries to ensure total value for money (Kim, Gu & Mattila, 2002).
Differentiation: Marriott is a major operator of this strategy as it continues to improve products and services which uniquely please the need of the customers. Marriott not only fulfil the needs of the customers but it’s offers are appreciated and professed superior than competitors. The hotel has gained reputation for innovation and quality. The value added delivered by the hotel allows charging premium price from the customers of higher income. For instance, Ritz-Carlton is known for it’s unique architecture and the exceptional dining options and the personalized guest services.
Strength: Marriott has dominant industry presence and acquisition of Starwood Hotels and resorts is one of the reasons. It has beaten the leading hotel in the industry, Hilton worldwide. Marriott has more than 6,000 hotels in about 120 countries. It is also the leading hotel company in the world by market value, total number of rooms and portfolio of 30 brands. The hotel drives for the competitive advantage and tries to constantly reinvent to combat competition. It is offering wide range of pleased products and services to the customers. Marriott has established strong position and has attained loyalty if the customers (Waligo, Hawkins & Clarke, 2014).
Opportunities: Marriott has opportunity to unite the business all over the world specifically in the European countries. The hotel can enhance itself by growing it’s services in the market in order to grasp loyalty of customers (Jogaratnam & Tse, 2004). The various planning’s and strategies can be used by the Marriott to acquire and purchase assets which generate revenue. The hotel has opportunity to grow in the market by improving direct marketing plans such as use of the advertisements.
Market penetration: Marriott has built reputation in creating high quality products which ensures best experience in the world. Market penetration is the percentage of the demand for rooms actually accruing to. It is calculated as the ratio between the occupancy of rooms against the total rooms of the hotel. Marriott has on an average more than 70% occupancy of the rooms. It is 100% in the case of special events. The revenues of the hotel were $11.7 billion in 2010 compared to the $10.9 billion in 2009. The increased revenue shows the more access and penetration in the market. The hotel is able to penetrate in the market due to updated technologies and innovations. Marriott has signed an agreement with Travel Click which is a provider of hotel ecommerce solutions. It will offer Marriott properties with insight on booking history with many travel agents worldwide (Heung, Zhang & Jiang, 2008).
Market development: The Marriott provides robust owner and franchisee benefits to achieve business goals. The assurance to communication and transparency builds relationships and helps to develop in the market. The footprint of the hotel covers various parts of the world than other travel companies (Iglesias, Markovic, Singh & Sierra, 2017). It represents development of the hotel in the fastest growing markets. Marriott delivers values to the customers through state of the art technology and wide share services to certify more return on the investment to the owners (Chan, 2014).
Product development: Marriott provides expansive portfolio of brands to maximize investment of hotel. Marriott has 30 brands which deliver premium and range of development options worldwide. These brands are JW Marriott, Bvlgari, St. Regis, Renaissance, The Ritz Carlton, Edition and more. The portfolio of the Marriott provides guests the right brand in the right place globally. The brands are differentiated by the visionary designs. The hotel provides three renowned loyalty programs such as Marriott rewards, Starwood preferred guest and Ritz Carlton Rewards. It drives matchless guest loyalty. The loyalty program of the hotel sells 50% of the rooms every night and they stay and spend more on the hotels.
Marriott is the world’s leading hotel. It’s portfolio consists of thirty brands specifically strong positions in the luxury, lifestyle and classic full service. It has been observed that 95% of the operating profits are generated from asset light franchisee and management contracts. The single ownership hotels are totally operated by the Marriott and it bears all the costs associated with the hotel. It is also befitted from all the income (FitzPatrick, Davey, Muller & Davey, 2013). Marriott has single ownership hotels in various countries where it has 100% ownership and control. The joint venture is a significant trend for the Marriott in the coming years. The hotel has joint venture with AC hotels in Spain to create AC hotels. These hotels provide professional services which facilitates the best deals ever (Chen & Dimou, 2005). The AC hotels in Spain are being combined with the Marriott to form AC hotels by Marriott. The AC customers are going to be benefitted by the Marriott rewards programmes with more than 3400 hotels and 34 million members. These hotels are being available on the Marriott.com.
In the management contracting, the hotel and it’s operations are managed by the third party. The manger is paid management fees. Marriott had 21 management contracts for the hotels in the Asia Pacific Region in 2009. These hotels were opened by the end of 2013. It represented 4 of the company’s lodging brands and nearly 7000 hotels. Commonwealth Hotels added Courtyard to it’s portfolio in 2018. When the hotel is possessed and operated by the 3 party brand name and the owner pays licensing fees to the Marriott. The hotel expects to operate franchisees over 240 hotels in the Middle East and Africa region by 2020. The commitment of the Marriott builds beneficial and long term relationships with the third parties (Dev, Brown & Zhou, 2007).
Although Marriott has done superb job of expanding locally and internationally, still there is room to grow somewhere else. In this scenario, China is having the largest population and has one of the largest travelling markets. Starwood has strong presence in the China, the merger of Marriott with Starwood can grow it’s presence in the China (Zhang, Guillet & Gao, 2012). The increasing flexible income and growing middle class has mounting desire for travel which can be benefit for the Marriott.
Marriott can improve it’s direct marketing plans as in the case of billboards. Several plans and policies can also be used by the Marriott to purchase various assets which generates revenues. It can also grow it’s services in order to grasp loyalty of the customers (Wang & Chung, 2015).
It has seen that people across the world like to stay in the luxury hotels when they travel with families. This trend has sharp incline in the developing economies which can be opportunity that can be utilised by the chains of the hotel.
Marriott can support to the LGBTQ community and provide exceptional offers to the same sex couples. Such trends show opportunity to the hotel. Marriott can also tie up with the airlines for the further development by providing additional services (Cunill & Forteza, 2010). Now days, customers prefer personalized attention and they are willing to pay for it. Marriott can charge a premium for rendering personalized services.
The biggest growth opportunity for the Marriott is the international service segment. The company can expand to more countries and can attain more property. The franchisees are a good option to attract operating margins and driving developer’s interest globally (Yelkur, 2000).
Conclusion:
Marriott is one of the leading hotels worldwide. The hotel provides the best service when it is compared to the competitive hotels. The brands of the Marriott understand and fulfil the need and preferences of the customers. The brands are capable enough to provide services from basic to luxury. This report has defined the business positioning strategy. The existing segment of the Marriott and the marketing and promotion strategy have great role in defining the positioning strategy of the hotel. The hotel has sufficient resources and competencies which lead to the unique selling proposition. The cost leadership, focus and differentiation help in gaining competitive advantage to the Marriott. The strength and opportunities describes the position of the hotel in the competitive environment. The existing growth strategy and the existing operating model has been discussed which has great role behind the success of the hotel. Finally, recommendations are given to direct further development of the Marriott.
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