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Marketing strategy final draft *****

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Analyzing The Ritz Carlton's Marketing Strategy

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Marketing strategy final draft *****

  1. 1. Marketing Analysis for the Ritz-Carlton 1 Marketing Analysis for the Ritz-Carlton Gus Arias 4967802 Florida International University: Chaplin School of Hospitality and Tourism Management
  2. 2. Marketing Analysis for the Ritz-Carlton 2 Table of Contents Mission and Vision Statement………………………………………………………………....1 Marketing Mix……………………………………………………………………………….3-4  Product………………………………………………………………………………....4  Price…………………………………………………………………………………....5  Place……………………………………………………………………………………5  Promotion……………………………………………………………………………5-6 SWOT Analysis……………………………………………………………………………...6-7 Target Segments………………………………………………………………………………..8 Evaluation of Company………………………………………………………………………8-9  Differentiation…………………………………………………………………….....9-10  Strategy Formulation………………………………………………………………..10-11  Brand Positioning…………………………………………………………………...11-12 Suggestions for Business Improvement………………………………………………………...12 Conclusion…………………………………………………………………………………..12-13 References………………………………………………………………………………………14
  3. 3. Marketing Analysis for the Ritz-Carlton 3 The Ritz Carlton is a Luxury brand Management company that operates eighty five hotels in thirty countries. This is a brand that is known most for its outstanding luxury service and style. More importantly, we want to know what marketing strategies they use to portray an image of such luxury and that keeps their guests coming back. Throughout this paper we will be analyzing their mission, vision, marketing mix, strengths, weaknesses, opportunities, threats, and target markets to understand more about the Ritz-Carlton’s strategy to be such a well-known luxury brand. MISSION & VISION "The Ritz-Carlton Hotel is a place where the genuine care and comfort of our guests is our highest mission. We pledge to provide the finest personal service and facilities for our guests who will always enjoy a warm, relaxed, yet refined ambience. The Ritz-Carlton experience enlivens the senses, instills well-being, and fulfills even the unexpressed wishes and needs of our guests." Their credo is great, but what does it really mean to the employees of the Ritz-Carlton? They want to do the thinking for you so that way they are anticipating your needs. We were told for example, if they know Mrs. Smith likes to have a cool refreshing soft drink while she is out by the pool in the afternoon, she will tell them the first day, by the second day they will say “Hi Mrs. Smith, will you be needing a cool refreshment again.” By the third day, the inquiry wouldn’t need to arise as the refreshment has now become a habitual routine that the guest will be delighted to enjoy without the wasteful time of asking. A perfected system that means that the attention to detail becomes of utmost importance to the employee and the brand alike, again keeping up with the Ritz-Carlton’s gold standards.
  4. 4. Marketing Analysis for the Ritz-Carlton 4 Their ultimate mission with each person is to follow their motto that says “We are ladies and gentleman serving ladies and gentleman”. They are a luxury brand and their commitment is to provide exceptional service that is associated with a luxurious lifestyle. “We want guests to walk away with the feeling that they are the only guest and that they are treated exceptionally.” Their platform is let us stay with you as opposed to you staying with us. They want to make sure that their guests have all the amenities at their fingertips. How does the Ritz Carlton go about accomplishing this? Richard Lemis (2014), tells us that they have vigorous training at a corporate level and all of the Ritz staff have twelve service values that help them achieve their mission. They are trained to surprise and delight their guests, to really wow them and to make sure that each guest feels like an individual. In addition, they use all the tools they have around them to further their learning about their company and the brand so they can grow as employees and better the service to their guests. As in most hotels, the Ritz Carlton does not call them clients or customers because for them they are guests. MARKETING MIX Product The Ritz-Carlton is a luxurious hotel company that offers a combination of products and services in the hospitality industry. This International hotel chain focuses on rendering luxurious guest rooms and its amenities with a mission to provide the consumer with a unique experience, according to Richard Lemis (2014). The Ritz-Carlton sells and ensures the highest standard in elegance for those who travel around the world either for business or pleasure. Their exceptional facilities to offer to its most valued guests includes spas, restaurants, pools, shopping boutiques, and sports and recreation facilities. It also offers celebration and meeting facilities, along with
  5. 5. Marketing Analysis for the Ritz-Carlton 5 catering services and event planning. Planning a wedding, the Ritz-Carlton would be the perfect choice (“The Ritz-Carlton Hotel & Company, 2014”). Price The Ritz-Carlton Hotel’s reputation of providing their guests with lavish facilities, and outstanding customer service over the years of its history has come with a prestige price. The price rate per night ranges from $500 to $14,000 depending on the type of suite, number of guests, and special services (“The Ritz-Carlton Hotel & Company, 2014”). The factors of pricing are made according to the considerations of competition, high or low seasons, level of establishment, availability, weekly inventory forecast, the occasion, personal perception, location, demographics, and other alternatives according to Richard Lemis (2014). Place (Distribution) The Ritz-Carlton hotel company owns a total of 85 locations worldwide. “Ritz-Carlton locations in 30 countries: Aruba, Austria, Bahrain, Canada, Cayman Islands, Chile, China, Germany, India, Indonesia, Israel, Japan, Kazakhstan, Malaysia, Mexico, Oman, Portugal, Puerto Rico, Qatar, Russia, Singapore, Saudi Arabia, South Korea, Spain, Thailand, Turkey, the United Arab Emirates, U.S. Virgin Islands, and the United States.” (“Fact Sheet: The Ritz-Carlton, 2014”) Promotion (Sales and Advertising) The Ritz-Carlton Hotel is a top-notch company that is known globally for their outstanding service and lavish properties. By having set a higher standard than most of the competition, the company created a platform of exclusiveness and quality across the board. These are the main priorities when it comes to their international marketing strategy (R. Lemis, personal communication, March 3, 2014).
  6. 6. Marketing Analysis for the Ritz-Carlton 6 In order to maintain the brand standard, the advertising team is not allowed to market to everyone and anyone. Their strategy is not to fault into a certain marketing channel. The company does not utilize much of television as a marketing tool, instead they use email promotion, ads on certain magazines, as well as their own private magazine provided by the luxury-advertising network according to Richard Lemis (2014). The company also uses its rewards programs for their loyal consumers as promotion and its partnerships with other high- end companies such as Neiman Marcus and JP Morgan Chase & Co, working together as a network to advertise their products (“The Ritz-Carlton Hotel & Company, 2014”). By following a brand standard and staying committed to service, the company also benefited from Word-To- Mouth marketing, positive costumer ratings, and numerous prestigious awards (R. Lemis, personal communication, March 3, 2014). . The Ritz-Carlton hotel company uses their own successful track record as an advantage, by having created a reputation of exclusiveness and high-class standards, without having to spend too much money on advertising. This is the reason why they can get away without exhausting mass media channels like, TV, or radio for promotion, and can still be as prosperous as other companies relaying heavily on those mass media channels (R. Lemis, personal communication, March 3, 2014). SWOT ANALYSIS Strengths The Ritz-Carlton is one of the luxury hotels of the world and each one of them offer luxury amenities and services. They are known for offering such high standards, one of the reasons that they continuously attract their guest. Along with excellent service, they are known for their superior training. Every employee is put through a rigorous training program to ensure
  7. 7. Marketing Analysis for the Ritz-Carlton 7 that they can handle every situation and is also allowed up to $2,000 to solve any guest complaint. Guests know that during their stay the highest level of customer service to given to them without question or doubt. No guest go unheard or inconvenienced by any means, another gold standard plus. According to Richard Lemis (2014), 99% of their guests are satisfied with their experience at the hotel and it’s because their biggest strengths’ are the services each and every guest receives. Weaknesses No matter how strong or organized a solid company can be, flaws can also be recognized, not by the naked eye, but subliminally viewable in some type of way or form. Even if we include the fact that there are perceived as being a company that is too expensive and they have a high turnover rate. Because they are a luxury hotel, staying there can range from $500-$10,000 a night. Along with that, working there can be a bit stressful and so high in standard that employees don’t match their standards. Opportunities The opportunities at The Ritz-Carlton consists of attracting new guests by opening new hotels in untapped countries, by adding new spas to existing and to new locations, by improving and promoting hotel security, by expanding and enhancing its corporate social responsibility; and, by sponsoring events according to Richard Lemis (2014). Threats The threats that the company faces are mainly due to pricing wars, and tougher competition from major players such as Four Seasons Hotels Inc., The Hong Kong and Shanghai Hotels, Limited and Starwood Hotels & Resorts Worldwide, Inc (R. Lemis, personal communication, March 3, 2014). Other threat factors are worldwide economic recessions. They
  8. 8. Marketing Analysis for the Ritz-Carlton 8 have a major impact in revenues and profits as vacancy rates increases due to guests travel cuts. Also increased terrorism threats have becoming an nuisance to the travel and hospitality industry thus negatively and directly affecting The Ritz-Carlton’s ability to generate revenues. Back in July 17th 2009, a suicide bombing attack killing 9 people and injuring more than 50 (Bell, 2009), has raised security concern in customer s mind. The hotel management team has to take into consideration new security procedures. Target Segmentation The Ritz-Carlton is a luxury brand so without a doubt they target upper class individuals, who are usually upper in age as well. Their high rates tend to attract older guests from all around the world who travel to relax in a peaceful and luxurious location or on business as a business traveler should, with style and comfort ability. Richard Lemis (2014) informed us that their location receives a majority of people from the North East, London and Brazil. Since their locations attract so many guests from these regions, Lemis (2014) and the rest of his marketing team try to target more to the North East region like the United Kingdom and Brazil. Evaluation The Ritz-Carlton Hotel Company is well-known as a luxury property for an outstanding customer service to their guests. This company operates many hotels worldwide and has even received the Malcom Baldrige National Quality Award, which it is a privilege award to obtain and be bestowed with, the honor is exceptional. According to the Ritz Carlton website: Our organization is the first and only hotel company twice honored with the Malcolm Baldrige National Quality Award from the United States Department of Commerce. Our organization is the first and only hotel company twice honored with the Malcolm
  9. 9. Marketing Analysis for the Ritz-Carlton 9 Baldrige National Quality Award from the United States Department of Commerce. (“Ritz-Carlton Hotel & Resorts, 2014”) This company uses a peculiar strategy that works to their benefit in a sense that they provide above and beyond the norm of customer services to each and every valued guest that steps through their doors. The name Ritz-Carlton itself stands on its own. The world population and the general public recognize the Ritz-Carlton has a prestigious name in hotels they can count on for the gold standards of hospitality. The company has a collection of hotels that spans over several continents across the world. With the totaled number of 35,000 employees the company’s gold standards are held in utmost regard. The Ritz-Carlton branded the name over a course of 31 years within the ever-changing hospitality industry differentiating themselves as a brand that stands apart of other well-known luxury names within a class of their own, especially after being purchased outright by Marriott International. The company continues to hold the name strong as an independently owned division of Marriott (“Fact Sheet: The Ritz-Carlton, 2014”). One main differential element that seems to make an impact within the company’s branding is the fact that they take pride in their guests and takes each and every comment or complaint to highest regard. Differentiation The Ritz-Carlton takes absolute pride in their brand recognition setting them apart from competition and other known names. The company’s Gold Standards program exhibits that trust and foundation that the Ritz Carlton has built with their employees to provide that upper echelon of immaculate service to their guests strictly following their outstanding motto “We are Ladies and Gentlemen serving Ladies and Gentlemen.” (“Fact Sheet: The Ritz Carlton, 2014”) According to Simon Cooper, who at the time was the President and Chief Operating Officer of The Ritz-Carlton from 2001 to 2010,
  10. 10. Marketing Analysis for the Ritz-Carlton 10 “We focus on three fundamentals. First, location–making sure we get absolutely the best location, where our luxury customers want to stay. Second, product–building the right physical product for what our guests want today and what they will want tomorrow, which means an investment of between $500,000 and over $1 million per room. That’s the platform. Third, people–our ladies and gentlemen serving ladies and gentlemen. They animate the platform. But you must get the first two right. If you’re not in the right location, or if you don’t have the right physical product, then employees, ladies and gentlemen, can only do so much.” (Reiss, 2009) Continuing with The Ritz Carlton gold standards, their credo also exemplifies their care and service to their beloved guests. The gold standards program that is set amongst their entire staff is a key element that places them above the rest and very few brands can equal in the same manner. Following the same direction as the Marriott and within the trends of other luxury chains, the Ritz-Carlton has even released their own Rewards Program. What seems interesting in the fact that Marriott has their own rewards network not associating with that of Ritz-Carlton, the company chose to focus primary on their guests outside of the Marriott name. Strategy Formulation Being at the top of a luxury hotel chain comes with the responsibility of launching a unique and strategic way of marketing to the consumer. Formulating a marketing plan of action focuses on the product and what the product provides to the consumer. In an interesting turn of strategy, The Ritz-Carlton initiated a campaign that focuses primarily on the guest and what the hotel can provide for them. The ideology behind the campaign introduced a new approach to an already existing idea. Rather cliché, the idea was taken and turned inside out sort of say. The Ritz-Carlton has taken the term ‘Please Stay with Us’ and has based it from the guest’s point of
  11. 11. Marketing Analysis for the Ritz-Carlton 11 view with a new phrase ‘Let Us Stay with You.’ The structure of that concept puts the traveler into the driver seat and allows them to control their travel experience and what they expect from a hotel. The Ritz-Carlton invested $10 million into rebranding the entire campaign all for the traveler’s needs in their lodging experience. The platform behind the campaign is based on travel and hotel memories from around the world. The campaign was officially launched in 2011 and has been affectionately entitled ‘Memories by The Ritz Carlton’ with the coined phrase stating ‘A Collection of Lasting Memories from Around World.’ This platform allows Ritz Carlton guests and employees to share an experience they’ve had whether in the hotel or on their travel. The Ritz-Carlton has also managed to incorporate this into their guestrooms and online. (Nayer, 2011). According to Chris Gabaldon, Chief Marketing Officer for the Ritz-Carlton, “When we looked for a common platform, one of the things that had to ring true was: Does the consumer actually believe that this is something the brand can do? It's about the little interactions that happen every day at the hotel. The platform provides the ability for the hotels to be able to rally around something they believe in.” (Nayer, 2011). As of now, the campaign is working to their benefit and can be seen on their website. The Ritz-Carlton has separated their memories platform into two sections, “Hotel Memories” and “Travel Memories.” (“Memories by Ritz-Carlton: Ritz Carlton, 2014”) Brand Positioning The Ritz Carlton has built a positive reputation around the world. According to Herve Humler, president of the Ritz Carlton, “The Ritz-Carlton is a brand that has proven the test of time and has continued to elevate its game to compete not only within the luxury hotel sector, but amongst the most elite luxury labels in the world.” (Stitch, 2011). In 2011, when The Ritz- Carlton launched their current campaign ‘Let Us Stay with You,’ it created a new format of
  12. 12. Marketing Analysis for the Ritz-Carlton 12 marketing revolutionizing their entire brand. The campaign focuses directly on the ideology of true luxury and unites guest across the globe through experiences they can share with each other through Ritz-Carlton’s personal social collections all based on their website. (Snitch, 2011). The ‘Let Us Stay with You’ campaign is actually quite extensive covers many different aspects from social marketing to even a digital advertising campaign. These are the highlights that set The Ritz-Carlton on a higher tier and most other brands within the luxury chain of hotels. Suggestions We all know that the Ritz-Carlton hotel has high standards in delivering services to every guest who walks through the property. However, the hospitality industry is a business where guests experience either a positive or a negative stay. For this reason, there are two well-known websites, TripAdvisor and Yelp, where guests write comments and rate hotel properties. According to the TripAdvisor website, guests write suggestions or problems encounter during their stay in the hotel. As an example, in March 6, 2014 a guest wrote a complaint about the noise heard from the walls and hallways and the lack of warning when a private event was occurring and the pool had to close. (“Nice, but not up to Ritz standards, 2014”). With the hospitality industry continuing to grow into the 21st Century, the use of social media has become widespread. Guests staying at the Ritz-Carlton or any other hotel have flocked to social media sites to express their thoughts on their particular stay at the property whether positive or negative, their voice was heard. The way that social media marketing is beginning to effect the business is that whether current guests or new guests read these comments of the property, they in turn derive their own opinion of the property and choose whether not this is the place to be. Conclusion All in All, The Ritz Carlton uses an upscale approach to capture an upscale clientele base.
  13. 13. Marketing Analysis for the Ritz-Carlton 13 They provide excellent and an ultimately unique experience to ensure that every guests feels special. Even through their weaknesses and threats, they live up to the “gold standard” and continue to come out on top as one of the best hotel brands in the world. They market themselves through having strong beliefs, providing an excellent guest experience, exclusive promotional material. Furthermore, the Ritz-Carlton continues to set themselves apart through creating innovative strategies and positioning their brand in such a way that makes them different from any other company within the entire hotel industry across the globe making the company being a recognized and respected luxury name throughout their thirty one years of service and many more years ahead us.
  14. 14. Marketing Analysis for the Ritz-Carlton 14 References About Us. (n.d.). 5 Star Resorts & 5 Star Hotels: The Ritz-Carlton Luxury 5 Star Hotels & Resorts. Retrieved March 19, 2014, from http://corporate.ritzcarlton.com/en/About/Awards.htm Bell, T. (2009, July 17). Indonesia hotel bombings: nine killed and 50 injured in Jakarta attacks. The Telegraph. Retrieved March 21, 2014, from http://www.telegraph.co.uk/news/worldnews/asia/indonesia/5847903/Indonesia-hotel- bombings-nine-killed-and-50-injured-in-Jakarta-attacks.html Fact Sheet. (n.d.). The Ritz-Carlton Corporate. Retrieved March 18, 2014, from https://www.ritzcarlton.com/en/Properties/SouthBeach/Reservations/Default.htm?ci=03: 21:2014&co=03:22:2014&ng=1&nr=1&up=false#top Lemis, Richard. Personal interview. 3 Mar. 2014. Palmer, A. (2011, December 1). Ritz-Carlton CMO reinvents luxury. Direct Marketing News. Retrieved March 20, 2014, from http://www.dmnews.com/ritz-carlton-cmo-reinvents- luxury/article/217494/ Ritz-Carlton Hotel & Resorts. (2014). Retrieved March 2014, from http://www.leaderspipeline.com/ritz-carlton-hotels-and-resorts Fact Sheet: The Ritz-Carlton. (2014). Retrieved March 2014, from http://corporate.ritzcarlton.com/en/Press/FactSheet.htm Reiss, R. (2009). How Ritz-Carlton Stays at the Top. Retrieved from http://www.forbes.com/2009/10/30/simon-cooper-ritz-leadership-ceonetwork-hotels.html Gold Standards: The Ritz-Carlton. (2014). Retrieved March 2014, from
  15. 15. Marketing Analysis for the Ritz-Carlton 15 http://corporate.ritzcarlton.com/en/About/GoldStandards.htm Nayer, M. (2011). Ritz-Carlton’s new platform makes memories social. Retrieved from http://www.hotelnewsnow.com/Article/6534/Ritz-Carltons-new-platform-makes- memories-social Memories by The Ritz-Carlton: The Ritz-Carlton. (2014). Retrieved March 2014, from http://www.ritzcarlton.com/en/LetUsStay/Default.htm Stitch, A. (2011). The Ritz-Carlton Hotel Company New Brand Platform: ‘Let Us Stay with You.’ Retrieved from http://corporate.ritzcarlton.com/en/Press/Releases/LetUsStayWithYou.htm Nice, but not up to Ritz standards. (2014). Retrieved March 2014, from http://www.tripadvisor.com/ShowUserReviews-g34227-d633139-r196441459- The_Ritz_Carlton_Fort_Lauderdale- Fort_Lauderdale_Florida.html#CHECK_RATES_CONT About Us. (n.d.). 5 Star Resorts & 5 Star Hotels: The Ritz-Carlton Luxury 5 Star Hotels & Resorts. Retrieved March 2014, from http://corporate.ritzcarlton.com/en/About/Awards.htm Palmer, A. (2011, December 1). Ritz-Carlton CMO reinvents luxury. Direct Marketing News. Retrieved March 2014, from http://www.dmnews.com/ritz-carlton-cmo-reinvents- luxury/article/217494/ Press Room. (n.d.). The Ritz-Carlton: Press: Fact Sheet. Retrieved March 2014, from http://corporate.ritzcarlton.com/en/Press/FactSheet.htm

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