Introduction to hospitality marketing“The American Marketing Association (AMA) sees marketing as the activity, set ofinstitutions, and processes for creating, communicating, delivering and exchangingofferings that have value for customers, clients and partners and the society at large.”(Nwokorie, 2010) Hotels are an integral part of the hospitality industry; the hospitalityindustry constitutes of restaurants, recreation, tourism and accommodation sectors. Theentry of corporate giants in hospitality sector has certainly transformed hospitalityindustry. This has given the sector major thrust to operate in a competitive environment,where aggressive marketing skills are essential to win customers. In hospitality industrythe marketing gives heed to the process of how a restaurant, hotel, travel business, or aresort can sell itself in a market place. In a nut shell, selling and marketing are integralpart of marketing mix to enhance hospitality business in the near future.Task 1: Marketing concept, customer need and satisfaction, service quality andstaying competitive. Explain how Mandarin Oriental hotel applies marketingconcept. What are they doing and how are they doing.Marketing ConceptMany hotels have recently incorporated marketing concept as their business philosophy.Marketing concept commences with a distinct market, with significance to the customersneeds and merges all the marketing activities that affect the customers. Marketingconcept facilitates in preparation for the future success of the hotel. Therefore it meets thegoals by creating customer relationship based on customer value and satisfaction.Customer needThe core concept of Marketing is to promote consumer needs in a typical professionalsense. Needs and wants of the guests have to be addressed in combination of tangibleservices, information or experiential product components. The mantra of “Customer isKing” has to be imbibed in core concept of Marketing in order to enhance customerretention and attain deliverables. For instance, Mandarin Oriental Hotel has identifiedthe needs of guests and this they have depicted on every hotel page, side by side offeredguests a number of services including online reservation provided by Mandarin OrientalHotel. The hotel uses latest technologies such as podcasts and vodcasts via internet topromote and market their product and services. The hotel is providing a platform toencourage the “Y” generation to use the Internet to book and enquire about the hotel,thus providing them with not only convenience but up-dated and accurate informationabout their hotels.The vision and mission of Mandarin Oriental Hotel Singapore is: “Delighting its guestsby providing service that is gracious and sincere, engrained in values of the orientalmarket”. The oriental influence can be seen in the guest rooms which are furnished in acreative manner depicting hand craft wood interior, exquisite silk brocades andauthentic Cantonese cuisine served with inventive twist at cherry garden restaurant.Mandarin Oriental Hotel fulfills the needs and wants of its guests in respect to business
travelers. Some of the facilities it offers to the business travelers is the rooms with workarea, 24/7 business centre equipped with secretarial services, internet , facsimiletransmission and courier services, express check- in and check-out ,high-speed wiredand wireless internet access throughout the hotel.(Dickinson, 2004) explains that the “Accommodations, Technology and Service willmerge to create an experience for the guest that is uniquely relevant to their wants andneeds.”Customer satisfactionCustomer satisfaction and need are the two main pillars of Hospitality marketing, whichhas to work in tandem with each other. Customer satisfaction is both goal and amarketing tool. If marketers meet the expectations of the guests then the guests aresatisfied. If the overall performance exceeds the expectations consequently guests willbe delighted. According to (Bowie, 2004)”Hotels cannot offer 100 percent absolutecustomer guarantees but they can provide implicit service guarantees”. Delighting guestevery time by going extra mile should be the key to building strong customerrelationship, bonding and satisfaction. Online reviews of the guests regarding theMandarin Oriental on travel advisor website are satisfactory.Service QualityParasuraman et al. (1985) suggests that “customers evaluate service quality across fivedimensions: reliability, empathy, tangibles, responsiveness and assurance”. A meal thatis elegantly prepared but poorly served to the guest would be low on servicequality. Mandarin Oriental Hotel in Singapore works a lot on their service performanceindicators this is through guest’s surveys, suggestions, and feedback forms. For whatthey have done, the Mandarin Oriental has received numerous awards and accolades forproviding outstanding service and recognition.Reasons to stay competitive in hotel industryAccording to (Bob, 2004) “Market place is increasingly characterized by uncertainlythose who think broadly and act decisively will hold competitive advantage.” Thesuccess of the hospitality does not begin with the product but in competitive market itmust be priced right and conveniently placed for the guests. The primary reason forhotels to be competitive is because they operate within the global hotel industry which ishighly competitive and failure to compete effectively in terms of quality of product,levels of service or price can have an unfavorable consequence on earnings. Majorpressure from competitors may lead to reduced margin. Hotels should reinforce newmarketing strategies to promote its products and services. Achieving competitiveadvantage strengthens the position in business for hotels. Alluring customers from thecompetitors is the game so that to acquire maximum benefit from the market place.
SWOT AnalysisSWOT Analysis is a business tool by which we evaluate the Mandarin OrientalHotel’s strength, weaknesses, opportunities, and threats.Strengths: Mandarin Oriental Hotel is recognized widely as one of the best luxury hotel in Singapore. The hotel is located near to central business district of Singapore and has easy access to the all major business offices and tourist destination. The hotel has excellent strategies to attract guests. It will be the first and only hotel in Singapore to feature Ruinart R De Ruinart Brut NV as house Champagne. Mandarin Oriental Hotel group is well renowned group in Asia and is expanding its operations in America and Europe.Weakness: Hotel has to face severe competition from the others established hotels such as Marina bay sands, Pan pacific hotel ,Swiss hotel and many others. The hotel does not promote its products and services proficiently like its competitors. During my visit to the hotel I observed that front office personnel lacked intra- personal traits, which should be a trademark for any hotel. Expressing concern for environmental issues has become an important part of hotel industry. Apparently Mandarin Oriental does not have environmental friendly strategies.Opportunities The open sky policy has led to increase in travel activity. This has led to maximum tourists coming to Singapore. Growth of internet provides hotel an opportunity to promote its products. The upcoming high speed rail link from KL to Singapore can be a good opportunity for the hotel.Threats There are similar categories of hotels near to Mandarin Oriental Hotel Singapore. The Challenge posed by un-flavored trends such as economic downturn will affect the hotel business. The business travel agents are contacting business travelers by their own by using advanced intranet system so it is affecting the business travelers loyalty to hotels. Certain events, such as acts of terrorism outbreak of contagious diseases and tsunami can have a severe impact on the demand from all customer segments in the affected area.
After Affects of Global Economic CrisesIn the face of the global recession, the Singapore hotel industry delivered sombernumbers, “REVPAR (Revenue Per Available Room) fell by 35 per cent during the2008/09 recession compared to 30 per cent during the 1997” (Tan and hui, 2009) TheMandarin Oriental Hotel too faced the heat of global economic turmoil By the figuresfrom (Mandarin oriental website, 2008) “Average occupancy recorded 66 per centduring recession”. Nonetheless, Mandarin Oriental’s financial position is strong and thelong-term outlook remains positive due to the strength of the brand and bydiversifying the hotel products they aim to increase sales again by offering customermore variety. Despite recession the prospects for the Singapore hotel market lookpromising the hotel industry has been re-rated upwards. The recent global economiccrises also challenged the hotels to find new ways to stay competitive and drive growthby finding new marketing tools to promote their products.Explain how different consumer group affect in the marketing in hotel industryand how different markets react differently.It is imperative for the Marketers to continuously identify the cultural shifts in order todevise new products and services, which find a receptive market. For instance thedemand for health and fitness has risen in the recent decade and this has boosted newbusiness prospects for hotel industry by adding fitness clubs and Spas facilities withinthe hotels. In relation to Arab Muslim market their cultural, needs; wants and behaviorhave to be kept in mind in order to attract them. Arabs are religious people, a need forprayer rug areas in hotel room is a necessity, and they prefer halal food. If hotelemployees are Muslims and understand Arabic, a great asset exists before the hotelmanagement. Imperatively, a significant percentage of Arabs are wealthy travelers andprefer hotels with cultural affinity in order to make their stay more accommodating.Now hotels are constantly interacting with guests to involve themselves with socialnetworks to understand what they want and their behavior. Mandarin Oriental Hotelregularly post ads or videos on sites such as You Tube and Face book. Guestsirrespective of their nationalities their primarily selection criteria for hotels is pleasantrooms, safety and gracious employees. Apparently their secondary selection criteria maydiffer due to the cultural influence. (Bowie, 2004) explains “Americans were moreinterested in non-smoking rooms and family restaurants, whilst Koreans preferredconvenient location and in-room mini bars.” Guests from all over the world may havesome similarity but their cultural, behavior and values are different. It is important forthe marketers to understand such differences and homogenize their products and marketprograms accordingly.Identify and explain the rationale for developing different market segment inservice industry.The rationale behind segmentation is a good basic starting point. Righty said by (Cathy,2002) “Segmentation gives a way to understand a market place that is diverse and
challenging. Segmentation ties the operation and all its marketing activities to consumerof some recognizable group or groups of consumers who can expect to respond in asimilar way to a marketing appeal.” The hotel must recognize the right segment afterthat design customer driven marketing strategies that build right relationships with rightcustomers.The three major steps in target marketing are:Segmentation: Dividing the market into groups of consumers with similar needs,wants, backgrounds, incomes, buying habits, and so on.Targeting: Analyze each segments quality and then choose one or more marketsegment.Positioning: This is the process of shaping how guests perceive the products andservices offered by a particular hotel in relation to similar products and services offeredby competitors.Based on your observation and experience, what type of market segment shouldMandarin Oriental Hotel Singapore focus in order to enhance its position in theregion? Justify your rationaleIn my observation, Mandarin Oriental Hotel caters to predominantly business travelerswith a high proportion of leisure guests. Segmentation improves profits by increasingcustomer satisfaction and bringing on repeat sales.Some of the segments, which Mandarin Oriental Hotel Singapore caters to: 1. Corporate market segment: They contribute to 60-70 % of the guests in the hotel. The reason so as to focus on corporate market segment is: They are not price sensitive; are likely to stay for one or more nights. The guests under this segment are regular guests of the hotel. The guests are less seasonal as they are not dependent upon weather and holiday schedules Furthermore, they utilize the hotel for banqueting, conference, and meeting facilities. Guests attending meetings and conferences in the hotel require overnight accommodation and this becomes major source of revenue for hotel. This Segment contributes the largest share of revenue. Challenges in corporate market segment
Corporate market segment will be affected by economic crises that would have a straight impact on the volume of business. It is crucial for the hotel not to fully depend on corporate market segment keep venturing out for other segments such as leisure segment, which can help the hotel to generate revenue. 2. Leisure traveler segment: Mandarin Oriental’s operational and marketing focus remains an attraction for affluent leisure travelers. Leisure guest’s can be FIT (free Independent Traveler), GIT (Group Inclusive Travelers), overnight stop over guests, guests on family holidays, honeymoon couples, incentive travelers and many others. Hotel has to maintain good relationship with intermediaries like travel agents and tour operators in order to attract leisure guests.The reason for the hotel to include Leisure travelers segment: During weekends and festivals when there is less business travelers at that time hotel can attract more leisure travelers. Leisure segment can bridge the gap of sluggish periods of business travelers. “The enhanced leisure facilities during global economic crises led to the increase of Mandarin Oriental’s REVPAR (Revenue per available room) by46% in 2009.”(Mandarin Oriental website ,2010) Leisure travelers can be an essential form of income generation for the hotel. Challenges in Leisure Traveler market are: Leisure customers are pricing sensitive compared to the corporate guests. Leisure guests are not willing spend more money and rely more on discounts. Leisure guests may not be the regular guests of the hotel. There is Loss in profit margin, due to the commission paid to the travel agents.ConclusionMandarin Oriental Hotel Singapore is focused on delivering own style of luxury,comprising the essential elements of tradition, quality and innovation. Hotel should takeadvantage of emerging markets, especially with business class and leisure markets. Thetotal dependency on foreign tourists can be risky; as there are wide fluctuations ininternational tourism. Domestic tourism needs to be given equal importance andmeasures should be taken to promote it. Meantime Mandarin Oriental needs to developeffective strategies and consumer relationship program and create new products to keepits competitive advantage and expand into new markets.
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