An in Depth Study of Marketing Strategies Followed by Marriott International Globally and in India

SYNOPSIS In this essay the author would like to share briefly about what is marketing. What are the four P’s of marketing i. e. the marketing mix? Also discuss the need for marketing in general as well as in the hospitality sector. In this essay the author would concentrate mostly upon the marketing approaches followed in the hospitality industry. Also the essay discusses in detail the marketing strategies adopted by the Marriott International globally and the marketing strategies followed by the J. W. Marriott Mumbai. The essay critiques these strategies and the author offers his insight upon these and what other strategies may be followed to further enhance the hotels performance. Chapter 1: Introduction There are many ways to define what is marketing the better of these definitions are all customer oriented and are based on customer satisfaction. Marketing is the social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others. – Philip Kotler What the author is trying to say is that marketing is the interaction of the seller with his buyer to make the buyer/consumer purchase the product or service the seller is trying to sell. Anything an entrepreneur does to sell his product or service to his potential customer can be termed as marketing or a part of it. Often people confuse the term ‘marketing’ to mean the same as ‘advertisement or publicity’ thought to some extent this may be true but in reality advertisement and publicity are small aspect of marketing. Marketing today is not just advertising ones product or service it is the process of building ones brand. Marketing is basically ones strategy for allocating their resources such as time and money in order to achieve ones objectives although no marketing strategy shall work for you as long as one identifies their potential customers and targets them. The consumers that need your product or service shall purchase them any way but what marketing does is it makes these potential customers aware of the products or services that you are providing. Hence marketing is vital for any and every establishment as it is the key element in improving sales and hence increasing profitability. Often it may happen so that you are offering a better product or services but due to lack of appropriate marketing strategy your competition may steel away your potential customer. Thus this brings us to why is marketing so important for each organization. Marketing is a large topic covering a range of aspects such as public relations, advertising, sales, and promotions. A few years back the common belief in organizations was that the employees in the marketing division were drawing large salaries for no work that they did, organizations believed that marketing was a process that was simple and could be done by anyone. This thought process may still be seen in some firms but today most organizations recognise the importance of marketing. In today’s competitive market were every organization offers a superior product, service or a combination of both it is only the marketing strategy the organization adopts that gives it the edge over their competition. In the given market scenario where consumers are educated and well aware one can not expect to sell an inferior product to their consumers they may succeed at first but that is where the organization shall start loosing their brand value and shall not be able to retain their customers hence in the long run it shall still be a loss. But taking an opposite situation where the establishment is offering a superior product or service at a competitive rate but employees little or no marketing strategies shall have even lower sale and hence lower profitability. So to succeed a mix of quality and its publicity is necessary so that the establishment’s potential consumers are aware of what the organization has to offer. With apt marketing strategies an organization can build a brad name for itself so people shall recognise the name whenever they see it. In such a case it may often happen that a newer establishment say ‘X’ offering the same product at a lower price may not be able to steel the original establishments customers as they will recognise the brand and were perceive that the product or service offered here is superior to a brand such as ‘X’ they have never heard of. Such is the importance of marketing it does not only help take to product to its consumers it helps retain those customers. Marketing helps the firm in understanding what their customers expect from the organization, with this knowledge it helps fulfil any other needs the customers may have from the organization which is beneficial to the organization on many levels. Micro and Macro Marketing Largely speaking, micro marketing is concept that deals with introduction or familiarization of given product to its most suitable segment which is its group of potential consumers. In Micro marketing, the objective is to craft or establish the most useful way to persuade individuals or a group of people to give a higher consideration to your designated product over the potential competitors. Micro marketing’s final goal of sales is which may be achieved by following a sequence of steps that are determining the customer and product relations, implementation, segmentation and by measuring of results. Other than this, there are many various ways and different modes to market to ones consumer which include branding, word of mouth, placement of product, and many other such ways. With the current technological advancement greater opportunities have been made available with the help of computers, the internet, by sending emails, text messaging, pod casting, interactive advertising and P2P networks. These new methods have nearly replaced all the old approaches such as print marketing. Take for example, today news papers and magazines are increasing relying on online marketing over the traditional methodology. The terms, macro marketing refers to a much broader point of economic contact amongst larger business entities. Macro marketing is the umbrella term for volution of inter and intra actions that sway larger entities such as global markets in Asia and U. S. to interact in terms of private business. Although one may propose that macro marketing is an idea which is built on micro marketing, one can assume the reverse impact as well. It is obvious that small building blocks of global economy which is micro marketing will have an effect on the larger picture or say the larger building blocks such as macro marketing may have an influence the micro marketing by altering the very dynamics of markets, demands, and many similar factors. By this we can say that the two concepts are inter-dependent. The interaction between macro and micro marketing is what determines the outcome of marketing efforts. Chapter 2: Content In this document the author would like to about the importance of marketing in the hospitality industry. Marketing is necessary in the hospitality industry for both profit and the welfare of the industry. Marketing helps in improving room occupancy and number of covers as primarily it brings in more customers. Other than this how it affects the welfare of the organization is by giving the organization the knowledge they need to bring their product and services up to their customers requirements this helps in customer satisfaction hence ensuring the guests return stay or visit for a meal apart from this it helps in brand building for the organization as the best publicity is one that spreads by word of mouth and it is only a deeply satisfied guest that goes out and praises the hotel he/she stayed at. Marketing is not just a set of skills or techniques that may be used to enhance satisfaction for many organizations it may represent the very way of doing business. Marketing is not just outside the hotel employees need to market what they have to offer to the guests that are staying with them as well. What the hotel has to offer must be made aware to the guests staying at the hotel this is not only to help increase revenues but it also assist in improving guest satisfaction. To plan a marketing strategy a number of decisions must be taken first some of which are, firstly the head of the marketing department must sit with the other HOD’s including the corporate heads and get an understanding of what are the objectives they plan to obtain from it other than this putting together the objectives of marketing in general budget allotted to the same must also be decided. Before planning a marketing strategy the marketing employees must know their property well, they must have complete knowledge of the prime prospects the property has to offer and their competitors. To start with they must set up realistic objectives that can be achieved easily and then begin formulating their marketing plan. A marketing strategy must be disciplined where in all the decisions that lead to production are in a sequence with a sound strategic plan. The marketing plan must be achievement oriented but at the same time it must be flexible so it is applicable to all the departments of the hotel and should be adjustable if required to increase effectiveness. To achieve a marketing plan that can fulfil these requirements one may use the four factors of the ‘marketing mix’. Marketing Mix’ is one of the most popular terms in marketing it is also known as the four P’s of marketing as it is based on four main factors that are product, place, price and promotion. The four P’s are parameter that a manager can use to control the marketing environment so as to obtain positive results from the target market. Neil Borden in 1953, in his American M arketing Association presidential address, took the idea of ‘James Culliton’ (1948) one step further and the term â€Å"marketing-mix† was coined. After which a prominent marketer by the name E. Jerome McCarthy, proposed a four P’s classification in 1960, which has seen wide use ever since. The author would like to elaborate what are these four P’s and their importance in establishing an efficient marketing plan. †¢Product – an object or service that is produced on large scales with set volumes taking in to account a market study that helps decide this volume of production. †¢Place – represents the place the object or service may be purchased. In the case of an object it may also refer to the modes of distribution of the object to the target market. Even for certain services this may apply such as outdoor catering but in the case of the hotel industry this may often not be possible so it applies more only to the location only. Although the channels through which it may be promoted may remain the same. †¢Price – would represent the price a customer must pay to purchase the object or use the service. The price is determined different factors such as the costs involved, the competitor’s price but most importantly what is the perceived value for the product or service for your target market. Promotion – is basically the communication a marketer would use to promote his/her product or service in the market this may be of any sort such as advertising word of mouth or through public relations. Advertising is any kind of communication that has to be paid for such as on the television or the radio, etc. where as public relation is where the firm does not pay directly it is in the form of endorsements, sponsorshi p deals, trade fairs and exhibitions. Largely defined, optimizing the marketing mix is the key duty of marketing. Offering a product or service with the appropriate mixture of the four P’s marketers can enhance their results and marketing effectiveness. Making a small change in the marketing mix is considered to be a tactical change and a large change in the four P’s is considered strategic. The author would talk about the marketing strategies adopted by the J. W. Marriott Mumbai also a brief about the Marriott International in India and globally. In order to do this the author would first talk about Marriott International first so we have an idea as to why these marketing strategies may have been adopted. Marriott International, Inc. is a global operative and franchisor of a broad assortment of hotels and associated lodging facilities. Its world renowned â€Å"Spirit to Serve† company culture, customer focus and employee-centred practices have led to the company being called the most admired in its industry (Fortune Magazine). Marriott International’s legacy can be traced back to founder J. Willard Marriott's experiences as a Mormon missionary who later started operating a root beer stand. He and his wife, Alice, opened the stand in Washington, D. C. , in 1927. From there to now where the Key Bridge Marriott in Arlington, Virginia that is Marriott International’s longest operating hotel, and will celebrate its 50th anniversary in 2009. This goes to show that Marriott has come a long way. Their son and current Chairman and Chief Executive Officer, J. W. (Bill) Marriott, Jr. has led the company to spectacular worldwide growth. Today, Marriott International has over 3,200 hotels and lodging properties located in the United States and in 66 other countries and territories. 1927: J. Willard Marriott got married to Alice Sheets in Salt Lake City, Utah, and moved to Washington DC with his new bride. That spring, J. Willard and Alice opened a nine-stool Root Beer stand, which they later call â€Å"The Hot Shoppe. † Winter 1927/1928: Hot Mexican food items are added to the menu at the â€Å"The Hot Shoppe† 1929: The Hot Shoppe Inc. , officially incorporated, invents curb service. 1934: Hot Shoppe expands to Baltimore, Maryland. 1937: They began airline catering begins at Hoover. This division was named â€Å"In-Flite Catering† and served to the Capital, Eastern, and American Airlines. 1939: Marriott landed their first ever food-service management contract with the U. S. Treasury. During World War II, The Hot Shoppe’s feed thousands of workers who moved to the nation's capital to work for the defence industry. 1945: The 1st Hot Shoppe’s cafeteria was established at McLean Gardens, Washington DC. Hot Shoppe’s also landed their first government feeding contract. In-Flite got their first airport terminal food-service contract at Miami International Airport. 1953: Marriott stock became public at $10. 25/share and sold out in two hours. 1955: Marriott Food Service got their first institutional and school feeding contracts at Children's Hospital and American University. Marriott's Highway Division opened several Hot Shoppe’s on the New Jersey turnpike. 1957: Marriott opened their 1st hotel, a 365-room property by the name ‘Twin Bridges Motor Hotel’ in Arlington, Virginia. 1964: J. W. Marriott, Jr. , was named President. 1965: Marriott Foundation was established. 1967: Corporate name is changed from Hot Shoppe’s Inc. , to Marriott Corporation. The company opened their Fairfield Farm Kitchens, a food production and purchasing facility in Beaver Heights, Maryland. In-Flite opened a facility in Venezuela; Marriott acquires Camelback Inn, its first resort property, and bought over Bob's Big Boy Restaurants. 969: Marriott's 1st international hotel opens in Acapulco, Mexico. 1972: J. W. Marriott, Jr. , was named CEO. 1973: The Company obtained their first hotel-management contracts. 1975: Marriott opened their 1st European hotel in Amsterdam, Holland. 1976: The Company opened two theme parks, both called â€Å"Great America,â₠¬  that were located in Santa Clara, California, and Gurnee, Illinois respectively. 1977: The Company celebrated their 50th anniversary and the sales toped $1 billion. 1979: A new corporate headquarter was built in Bethesda, Maryland. 1981: Opened their 100th hotel in Hawaii. 982: The Company acquired Host International, Inc. 1982: Marriott acquired Gino's and converted it to Roy Rogers. 1983: 1st Courtyard hotel was inaugurated. 1984: Marriott entered the vacation, time-share and senior-living markets. 1985: J. Willard Marriott, Sr. , passed away. Marriott Distribution Centre opened in Savage, Maryland. 1987: Marriott acquired Residence Inn Company and entered the lower-moderate lodging segment with Fairfield Inn. 1989: 500th hotel was inaugurated in Warsaw, Poland Bridges. Marriott also started a Foundation for People with Disabilities. 990: Pathways to Independence: which was Marriott's Welfare to Work Program was established. 1993: The Company split into two Marriott Internatio nal and Host Marriott Corporation. 1995: Marriott acquired the Ritz-Carlton Hotel Company, LLC. 1997: Marriott acquired the Renaissance Hotel Group and introduces brands such as TownePlace Suites, Marriott Executive Residences and Fairfield Suites brands. 1998: Marriott opened their 1,500th hotel. Sales reached $8 billion. Sodexho Alliance acquired Marriott's food-service and facilities-management businesses. Marriott acquired 98% of the Ritz-Carlton Hotel Company, LLC. 1999: Marriott acquired the ExecuStay corporate housing company. 2000: The 2,000th Marriott property opened in Tampa, Florida. 2002: Marriott celebrated their 75th anniversary. The company now had over 2,300 hotels, 156 Senior Living Services Communities with over 200000 associates, and were operational in 63 countries and territories with annual sales of over $20 billion. 2002: Marriott announced the sale of its Senior Living Services Communities and the Marriott Distribution Services. 002: Marriott opened its 500th extended-stay hotel, which comprised of a total of 400 Residence Inns and 100 TownePlace Suites. 2002: Fairfield Inn opened their 500th hotel in Rogers, Arkansas. 2002: Marriott opened their 2,500th hotel worldwide, with the completion of the 950-room JW Marriott Desert Ridge Resort & Spa that was located in Phoenix, Arizona. 2002: Marriott had increased its North American market share to 8% total. 2003: Marri ott revenue totalled up to $9 billion in 2003 and in $476 million as gross profits. Marriott added over 31,000 rooms and timeshare units in the year 2003, bringing the global system to 2,718 hotels and timeshare units which made up for the unbelievable 490,564 rooms that Marriott now had globally. 2003: Marriott completed the sale of their Senior Living Service Communities and the Marriott Distribution Services. 2003: Marriott Courtyard opened their 500th hotel in Minneapolis Downtown and SpringHill Suites opened their 100th hotel in Dallas-Addison, Texas 2004: Ramada International opened their 200th hotel in Amsterdam. Marriott revenues totalled to a sum of $10 billion in 2004 and $594 million as net profit. 500,000th room opened in London, located at the West India Quay Marriott Hotel in Canary Wharf district of London. 2004: Marriott Rewards welcomed their 20,000,000th member. Marriott Vacation Club International celebrated their 20th anniversary. 2005: Marriott announced the sale of Ramada International hotels. Marriott and Whitbread completed the transaction, forming a 50/50 joint venture to got hold of Whitbread's portfolio of 46 franchised Marriott and Renaissance hotels of more than 8,000 rooms. As element of the joint venture agreement, Marriott took over running of the hotels, and the joint venture intended to sell them to new owners subject to long term Marriott management agreements. In 2007, Marriott celebrated two significant milestones in Marriott's history. The first was the 80th anniversary of our founding and the second was 50th anniversary of their entry into the hotel business. The 80 year old heritage of innovation and spirit to serve, Bill Marriott launched a blog in January that was called Marriott on the Move. On January 8th 2007 Marriott. om set a record by generating more than 55,000 reservations in one day, posting a record 55,109 reservations that generated over $17 million in gross revenue. Starting from February, restaurants in more than 2,300 Marriott hotels all through the U. S. and Canada no longer used partially-hydrogenated oils which were a primary source of Tran’s fats, this culmination of an eight-year effort. Marriott is honoured with 20 07 ENERGY STAR Sustained Excellence Award from U. S. Environmental Protection Agency. The company is well on its way to meet its goal to reduce greenhouse gases by 6% per guest room by 2010. The J. W. Marriott Mumbai is the only hotel of the brand ‘J. W. Marriott’ in India. The J. W. Marriott Mumbai is located in a fashionable and up-market Juhu area . It overlooks the scenic waters of the Arabian Sea, J. W. Marriott Mumbai is the preferred hotspot of Bollywood celebrities and stars. This world class resort style hotel is merely 20 minutes from the domestic and the international airports and is in close proximity to most of Mumbai's major business parks. The Hotel is home to the only one of its kind spa in Mumbai called ‘The Quan Spa’ and the stylish nightclub ‘Enigma’. At the J. W. Marriott Mumbai they have world class Food and Beverage offerings, the Hotel houses some of India’s restaurants that specialise in Italian, Thai, Teppanyaki and Indian cuisines respectively. As Mumbai is the Financial Capital of India so the hotel had plenty of business travellers but due to its location and the hotel being celebrity hotspot leisure travellers preferred to stay at the Marriott over the other properties in Mumbai. The J. W. Marriott Mumbai is a 355 room property spread over five floors. It has 9 meeting rooms and a total of over 16500 sq. t in meeting space. S. W. O. T. Analysis of the J. W. Marriott Mumbai Strengths – †¢Location (Place) – Built in Mumbai the financial capital on India in the celebrity strewn locality of Juhu. It is located on the beach with a beautiful view of the Arabian Sea a luxury business hotel that offers even its business travellers the feel of living in a resort. †¢Ease of Access – it is just 20 minutes away from both the domestic and the international airports and is closely located to the business parks in the city. †¢Food and Beverage outlets – the J. W. Marriott Mumbai has three world class speciality restaurants Indian, Italian and oriental cuisines respectively along with this they have a 24 hour multi cuisine coffee shop, a cake shop, a formal bar at the lobby level and a nightclub. All together the hotel ensure that a guest staying with the Marriott shall never find the need to go outside the hotel for any of their Food and beverage needs. †¢Brand – the J. W. Marriott is one of the highest recognised brands under Marriot International there are only 40 around the world and only the one in India so making it exclusive. It is a brand that is looked up to globally hence for someone that has never been to Mumbai even shall book here looking at the brand alone. †¢Service – the Marriott around the world is renowned for their culture ‘Sprit to Serve’. This goes to show that the service at the J. W. Marriott Mumbai was exceptional and always ensured that their customers were more than just satisfied with their stay. †¢The hotel has nine meeting rooms, fast internet access in the rooms as well as in all the public areas in the hotel along with any other services a business traveller may need made available at the push of a button. The J. W. Marriott houses a one of a kind ‘Quan Spa’ and other recreational facilities such as a pool overlooking the sea along with a salt water pool yoga sessions held daily. Weaknesses – †¢The J. W. Marriott Mumbai was built a quite some time back it came into operation a few years after it was completely furnished so even thought the hotel has been renovated a few times it still require a major up gradation in its interiors especially the bathrooms fixtures. Though its location is in a popular area that is strewn with celebrities it is still located in the suburb hence the niche business cliental that has work in south Mumbai usually do not prefer to stay here. †¢As the Marriott has a mix of both business and well leisure travellers it can not concentrate on either type of the cliental completely and often cannot market the hotel appropriately. Opportunities – †¢The J. W. Marriott Mumbai would increase customer satisfaction considerably by refurbishing the rooms and bathrooms. Competitive pricing would help increasing the hotel business. †¢It is the only hotel of its standard in the vicinity. Threats – †¢There is traffic congestion upon the road right outside the Marriott during rush hour which makes it hard to get in or out of the hotel even. †¢The hotel has s ecurity threats as it is right on the beach. The author would now talk about the marketing strategies adopted by the J. W. Marriott Mumbai. Guest loyalty programs – Marriott rewards programs is loyalty program, where when a guest spends 1000 dollar and earns 10 points or 2 miles Guest after collection certain amount of points can redeem them with free stay at any of Marriott property. Other than the obvious where this helps in enhancing guest satisfaction. This helps the company by getting loyalty from guest and it also ensures that the guest stays only in Marriott properties world wide. Guests get to different level after spending certain nights and the rewards increase as the level increase. The various levels are as follows base level that is the entry level above this is the silver level where the guest a 72 hr prior reservation the then there is the gold level where the guest gets a 48 hr prior reservation two way transfer lounge access and so on to platinum and platinum premium where the guests get reservations 24 hours prior all the other advantages along with P6 amenities. Along with this the guests get points for every purchase and discounts at the food and beverage outlets as well as at the spa. Corporate rates – special rates offered to corporate houses or companies judging by the business they will bring in the future. Package rates – special rates for guests taking an all meals inclusive plan or even for a single meal. Group rate – a special rate for a group staying with the hotel as they bring in volume sales. Online marketing, advertising online for the hotel and what they have to offer. Regional offers – special regional offers that the hotel may offer during the time of need such as a slack period. By advertising on the hotel cars to increase awareness in the target market. By improving performance of the new employees and to improve their talent and motivating them so they in turn will help increase guest satisfaction. These are the marketing strategies that are followed globally and at the J. W. Marriott Mumbai. Chapter 3: Critique Although the J. W. Marriott Mumbai offers numerous promotional offers to its customers as part of its marketing strategies but there are still some shortcomings at that the author would like to elaborate on. Firstly the J. W. Marriott targets both leisure travellers as well as business travellers hence its marketing strategies are mixed and do not completely target either of the markets. Hence they loose out customers in both these sectors the business travellers may prefer to stay at the business hotels in South Mumbai and the leisure may prefer to stay at the resort hotels located at Mud Island as these hotels not only offer better holiday packages but are also more cost effective. Guest loyalty programs today are very common every hotel chain offers their own loyalty program hence there is nothing unique about these programs any more and they fail to draw customers so marketers today say that running these loyalty programmes is not cost efficient anymore. The author would like to suggest as to what marketing strategies according to him the J. W. Marriott Mumbai must practise in order to perform better. To start with at the Marriott they must devise separate packages for leisure travellers and for business travellers this way not only does the hotel have larger number of targeted clients but by targeting them separately the hotel can identify their needs separately and increase customer satisfaction by this considerably, it shall also assist in improving guest satisfaction considerably. The hotel must capitalise on their view and promote it on the basis of that. As all the hotels shall offer the same services but the advantage they have here at the Marriott is that they can offer the guest he/she may not get anywhere else in Mumbai. The hotel can also promote the hotel as a celebrity hub this may help increase the accommodation as leisure travellers may like to know that they are staying at a hip location percentage but will drastically the number of covers and the spa and other such recreational activities usage by the locals. The hotel is located very close to both the domestic as well as the international airports hence providing an ideal stay for guest that are on a tight schedule and have no time to waste in travel. The marketers at the Marriott can devise a marketing strategy around this as well. The J. W. Marriott has some of the finest restaurants in the city it also houses one of the most popular night clubs in the city so this may be used to attract leisure travellers. Chapter 4: Conclusion In the document above the author stated the marketing approaches that Marriott uses globally and in their Mumbai property. The author then offered his insight on these approaches and offered a few other approaches that the hotel may adapt to in order to perform better. But we must take into account that even though flawed or cost ineffective some marketing strategies such guest loyalty programs may not be discontinued as firstly the guests that are already using these programs shall be deeply dissatisfied other that this since most hotel chains today are offering these programs the guests today expect to get such offers and may not choose to stay with the hotel if such are not in place. So though not having these programs may be profitably in the beginning but a global brand like Marriott cannot afford to loose out on customers on a long term basis at such a small price. What the author would like to conclude by saying so is that not much may be done about the marketing strategies globally but a marketing division in each hotel must be present that shall have decision making authority so as to implement regional marketing strategies based on the four P’s of the marketing mix or even out side them to ensure that the hotels performance is enhanced. Bibliography Books †¢Effective Marketing, Alan H. Anderson and Thelma Dobson †¢The Great Marketing Turnaround, Stan Rapp and Tom Collins †¢Marketing-Led Strategic Change, Nigel Piercy †¢Marketing Management (2005) , Prentice Hall Kotler Philip, Keller Lane Web Pages †¢www. blog. marketo. com/blog/2007/01/why_you_need_ma. html †¢www. marriott. com †¢www. CitizenBase. org †¢www. marketing. about. com †¢www. themarketingmentor. com †¢www. marketmyproducts. com