Question:
Discuss about the International Marketing: Small Business Economics.
With a fast augment in the flow of travelers in Oman, fuelling expansion in the international luxury hotels in Oman there is an important opportunity for mid-range hotels to provide for a gap in the market. It has been reported that the four and five star hotel rooms are expected to experience a substantial supply which will in turn cater to the growing tourism market in Oman. Oman has ripened for more international budget hotels. A total of fifty economy hotels are available in Oman which do not include guesthouses and serviced apartments. Out of this, 25 hotels are operated in Muscat.
The Radisson Blu Hotel is set in the heart of the city. It is an upscale Arabian-style hotel and t is 7 km away from the Qaboos Grand Mosque. Similarly, it is 8 km away from the concerts at the Royal Opera House Muscat.
Figure 1: The swimming pool of Radisson Blu Hotel
(Source: Hotels et al., 2016)
The Radisson Blu Hotel comprises of a beachfront pool and pavilion. The rooms and suites comprises of balconies. The hotel consists of vivacious rooms with colorful accents. It also comprises of fitness center like gym, kids club, two tennis courts and a sub-aqua diving center. The service provided also includes a shuttle service up to the International Airport. It comprises of a wall-to-wall carpet that offers free WIFI. The rooms in the hotel also has flat screen TV along with minibars. The room of the hotel is upgraded and the set comprises of tea makers and coffee makers and also has an access to the lounge areas. It also comprises of a free-form pool with waterslide as well as a pool for the children. The hotel also provides a service of sub-aqua diving.
Figure 2: The Radisson Blu Hotel
(Source: Hotels et al., 2016)
The service also includes a complimentary breakfast pound that is served in a multi-cuisine restaurant. It comprises of a terrace seating as well as poolside banquets. Starting from an Asian dish to a European cuisine, everything is available in the restaurant. It also offers a Thai food that has a Chinese twist that in turn creates a blend of Asian cuisine. It also provides an eid package that incorporates added add-ons that includes admiring breakfast as well as free access to gym, fitness club and pool as well as free Wi-Fi internet. The guests can avail 15 percent discount on food and beverages (Chen 2013).
Figure 3: The dining space of the Radisson Blu Hotel
(Source: Blu and Radisson Blu Hotel, 2016)
The meeting room is for business conferences, grand celebration or cherished gathering. The hotel offers a six meeting room that is equipped with free high-speed, wireless Internet access and the modern technology of audiovisual. Most of the meeting rooms have natural hours of daylight and most of the rooms make use of the Experience Meetings options. The ballroom is reserved for a truly spectacular event. The size of the ballroom is 500 m2. The ballroom can be divided into three smaller spaces depending on the requirements (Chen et al. 2013). The gorgeous hotel is situated in the middle of the pulsating urban area in the capital city just 12 minutes from Muscat International Airport. It is bounded by mountains and the Gulf of Oman, it imprison the attraction of both a lively metropolis and Mother Nature. The visitors take pleasure in easy admission to the commerce region and great shopping, then turn around and timetable a scuba-diving or dolphin-watching session in the same day.
Mode of Entry
The mode of entry varies in terms of assurance, control of organization, risk involved and the expected returns. In the global market, the mode of entry is that channel that the association hires in order to gain entry to a new global market. This in turn diminishes a number of major alternatives. However, it recognizes the alterative as differentiable. The two types of mode of entry include both equity and non-equity. The equity modes include joint ventures. The contractual agreement include licensing, franchising.
Joint venture – It is a trade agreement in which the parties have the same opinion to expand, for a restricted time, a new unit and new possessions by contributing justice or equity. The controls over the enterprises are exercised by the joint venture. This in turn accordingly distributes revenues, operating cost and assets. Joint Ventureshas a tendency to be equity-based that is a new industry is set up with the individuals owning a quantity of the new commerce. The consequences are the two folded monetary authority, double the promotion aptitude, twice the sales in few cases and entrance into a market that otherwise might not be untie. Units that belong to the global combined venture distribute the costs and load of operation while gaining evenly from a share of a market (Parker and Van Praag 2012).
As far as the implication of joint venture on the Radisson Blu Hotel is concerned, the joint venture will be of two types that is the joint venture of the hotel owner and the joint venture of the hotel manager. Under the joint venture of the hotel owner the parties need to create a joint venture to act as the hotel owner. In this case, characteristically one party has capability in hotel management, and the other possess the real estate. One party will make a payment in the real estate or equity and the other will make a payment in the management proficiency and perhaps a negligible quantity of equity. In the Radisson Blu Hotel, under the joint venture of hotel manager, the manager of the hotel is hired by the owner as he has proficiency in managing.
Franchising – the agreement of franchising have a propensity to be longer and the franchisor proffers a wider package of rights and possessions which usually includes apparatus, preliminary trainings, site authorization, and labor-intensive operation. All of the above supports are necessary for a franchisee to operate its trade in the similar way as done by the franchisor. Franchising is an underexplored mode of entry in the global markets. It is restricted in its ability to acclimatize, which is a major deliberation in employing the mode of entry. One of the major drawbacks of franchising is that is it difficult to adapt the permitted asset or brand name (Brouthers 2013).
Licensing – a global licensing agreement allow foreign firms both entirely and non-exclusively produce a product of an owner for a permanent term in a precise market. The licensor gives authorization to the licensee to use their capital like expertise trade mark, decision-making skills, in return for a royalty fee. However, there are disadvantages that are associated with licensing. The disadvantages include the cost that is involved during re-negotiation. The process of re-negotiation is very expensive. As soon as the agreement expires the former licensee is viewed as an opponent. The market will not get fully exploited by the licensee and this in turn leaves space for the entry of the opponents. The fees of the licensee are often too small. Similarly, the government also imposes conditions on the payments and supply (Bastié et al. 2013).
As far as the Radisson Blu Hotel is concerned, licensing can improve the net cash flow in short term but lower profit in the long term. It will also help to the time involved in technical expansion and also the cost for the licensors. However, it may also lead to the poor performance of the licensees.
Trademark – trademarks are usually used by licensing in exchange for a proportion of revenue or a fee. A licensor in the domestic country makes restricted rights or resources as compared to that obtainable to the license in the host country. This right in turn includes the trademark.
The Radisson Blu Hotel will also similarly use the trademark which will used by its licensors in exchange for a portion of revenue and fees.
Reasons behind Internalization
In Oman, the standards of living are improving each passing day. The internationalization expansion of a hotel in the country can achieves this. Hotel ventures with abroad travelers mature acknowledge are powerfully expectant to select equivalent countries or districts as the first step in the direction of hotel internationalization in the country on the basis of local crowd abroad tourism and put into practice international operation. Internationalization is required by the hotel industry in order to position itself in the market. Collectivization expansion is the predictable obligation of hotel industry in Oman internationalization development, and at this point, Radisson Blu Hotel group in Oman is very successful (Forsgren 2015).
In order to pace up the procedure of the internationalization of the international hotel in Oman, one of the most effectual means is rational planning and operation of capital. The government also requires functioning truthfully in order to speed up internationalization. The internationalization of the domestic country hotel ought to constantly base on the real situation of their own expansion and draw lessons from the triumphant understanding of international hotels. A small amount of resources are used to promote the internationalization of the country (Midlarsky 2014).
Figure 5: The reasons behind Internationalization
(Source: Emagined.apps01.yorku.ca, 2016)
In order to operate the internationalization in the hotel, it is very important to provide employees support and academic support. The hotel can also utilize some triumphant understandings of foreign talents for hotel management so as to progress the level of hotel internationalization. It is only through expanded development that can help in enhancing the level of internationalization (Madhok and Keyhani 2012).
There major reasons which are required in order to become internationalization are as follows:
Probability for growth – this is the most general reason in order to become internalize. It also helps in expansion. The secure course is always to start nationally and also to grow from the foundation established.
Small domestic market – in order to globalize, it is very important to look for global expansion.
More customers – the more the market for international hotels, the more will be the customers.
Discouragement of the domestic competitors – it is very important to discourage the competitors in order to attain internationalization.
Short-term security- internationalization will lead to short-term security. The industry is less vulnerable to episodic fluctuations and recession in the economy. During the period of financial recession, export is the main solution for the company to be internationalized.
Increase novelty- in order to get internationalize it is very important finance the expansion of new product.
Spirited strike – a spirited or a competitive strike can prompt positive characteristics of the state which is identified in the market. The entry of a market can not only be prompted by the positive features. It is mainly driven by the belief that the competent would benefit a vital gain. In this scenario, offense is regarded as defense. This means that the company enters the domestic market of a capable more often than not in reprisal for an earlier entry into its own household market.
Rise in innovation and organization – if the base of the customer can be increased globally, it can finance new product expansion. A hotel can benefit by participating in a tough and spirited market that its own manufactured goods design and promotion would develop and allow it to execute better around the world. In order to progress as a qualified hotel, it is significant to qualify as the global brand.
Economies of scale – an excellent way to develop the trade is via exporting with the goods that are broadly accepted around the world. In most of the international hotels, internationalization can help to attain greater scales off financial system, especially for industries from smaller domestic hotels. A company can hunt for a unique and differentiating advantage which includes trade name as well as service model.
Social and Cultural Factors
The social and the cultural factors have an immense influence on the international marketing. The perception of the travelers gets influenced by the differences in the social conditions, religion and material culture. Tourism is the main criteria when it comes to international hotels. It is growing rapidly on a worldwide basis and is partially fueled by the continuous globalization. However, as far as consumer satisfaction is concerned, culture has been highly ignored (Stahl and Tung 2014).
In order to remain competitive in a globalized hotel industry it is very important to enlarge a service that has the potential to satisfy a differential consumer base. Culture is one of the most effectual yet complex elements that hotel workers need to appreciate in order to supply great services in harmony with the needs of the customer.
Figure 6: The social and Cultural Factors
(Source: Emagined.apps01.yorku.ca, 2016)
The social factors will make the future look excellent for Radisson Blu as there will an increase in the number of individuals who have planned to travel globally. Even the planning made by the travelers regarding the expenditure they had made at home will gradually increase.
The cultural and the social factors are vital to be taken into consideration while generating and implementing a marketing plan of a hotel. Essentially, sociocultural factors are civilization, lifestyles and principles that differentiate a society. The cultural aspects generally include aesthetics, education, verbal communication, religion, and expertise and material traditions. As part of the cultural factors, the most important part is social organization. It is te vital method by which a society systematizes itself (Seraj 2012).
The role of an individual in a society and the social factors affects the buying and the spending decision. In a society every individual plays a dual role depending on the group. The social status is a pertinent factor in this case.
Conclusion
Oman has ripened for more international budget hotels. A total of fifty economy hotels are available in Oman which do not include guesthouses and serviced apartments. In spite of having the drop in total interchange passing through the Airport in 2001 and 2002, a turn down which was attributable mostly to the events of the year 2001 and political nervousness in the region, the amount of traveler nighttimes grew by 7.7 percent in the year 2001 and a more conventional 1.0% in the year 2002. Stronger expansion in room nights, of roughly 12 percent was recorded in 2003 and 23 percent was witnessed in the year 2004. The first quarter of 2005 has witnessed noteworthy expansion, of roughly 20 percent on the analogous period in the year 2004.
Tourism is the main criteria when it comes to international hotels. It is growing rapidly on a worldwide basis and is partially fueled by the continuous globalization. In order to pace up the procedure of the internationalization of the international hotel in Oman, one of the most effectual means is rational planning and operation of capital. The internationalization of the domestic country hotel ought to constantly base on the real situation of their own expansion and draw lessons from the triumphant understanding of international hotels.
The government also requires functioning truthfully in order to speed up internationalization. Internationalization is required by the hotel industry in order to position itself in the market. The Radisson Blu consists of lively rooms with multicolored accents. It also includes of fitness center like gymnasium, kids club, two tennis courts and a sub-aqua diving center. The service provided also includes a transport service up to the International Airport. The cultural and the social factors are vital to be taken into consideration while generating and implementing a marketing plan of a hotel. Essentially, sociocultural factors are civilization, lifestyles and principles that differentiate a society.
References
Bastié, F., Cieply, S. and Cussy, P., 2013. The entrepreneur’s mode of entry: the effect of social and financial capital. Small Business Economics, 40(4), pp.865-877.
Midlarsky, M.I., 2014. The Internationalization of Communal Strife (Routledge Revivals). Routledge
Forsgren, M., 2015. Managing the Internationalization Process (Routledge Revivals): The Swedish Case. Routledge. Journal
Chen, K.H., Liu, H.H. and Chang, F.H., 2013. Essential customer service factors and the segmentation of older visitors within wellness tourism based on hot springs hotels. International Journal of Hospitality Management, 35, pp.122-132.
Brouthers, K.D., 2013. Institutional, cultural and transaction cost influences on entry mode choice and performance. Journal of International Business Studies, 44(1), pp.1-13.
Chen, W.J., 2013. Factors influencing internal service quality at international tourist hotels. International Journal of Hospitality Management, 35, pp.152-160.
Madhok, A. and Keyhani, M., 2012. Acquisitions as entrepreneurship: Asymmetries, opportunities, and the internationalization of multinationals from emerging economies. Global Strategy Journal, 2(1), pp.26-40.
Seraj, M., 2012. We create, we connect, we respect, therefore we are: intellectual, social, and cultural value in online communities. Journal of Interactive Marketing, 26(4), pp.209-222.
Stahl, G.K. and Tung, R.L., 2014. Towards a more balanced treatment of culture in international business studies: The need for positive cross-cultural scholarship. Journal of International Business Studies, 46(4), pp.391-414.
Parker, S.C. and Van Praag, C.M., 2012. The entrepreneur’s mode of entry: Business takeover or new venture start?. Journal of Business Venturing,27(1), pp.31-46.
bateni, p. (2016). MBA: Mode of Entry. [online] Mbabusinessmarketing.blogspot.in. Available at: https://mbabusinessmarketing.blogspot.in/2012/06/mode-of-entry.html [Accessed 21 May 2016].
BLU, R. (2016). Reservations for Radisson BLU Hotel | DialAFlight™. [online] Dialaflight.com. Available at: https://www.dialaflight.com/hotels/middleeast/oman/muscat/radisson-blu/2120719/ [Accessed 21 May 2016].
Emagined.apps01.yorku.ca. (2016). Internationalization Policy and Strategy – Canadian e-Magazine of International Education. [online] Available at: https://emagined.apps01.yorku.ca/internationalization-policy-and-strategy/internationalization-at-canadian-universities/ [Accessed 21 May 2016].
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