Strategic Marketing Plan
Mercure luxury hotel is a hotel brand, which uses a marketing plan. A marketing plan refers to an outline used to guide the marketing process of an organization in order to help it achieve its marketing objectives (McDonald & Keegan, 2002). However, information gathered
through SWOT, PESTLE, and TOWS analysis revealed deficiencies in various areas.
Market Analysis
SWOT analysis:
This is a framework used for summarizing a situation and position of a company (Rao et al. 2008). Swot analysis, an acronym for Strength, weakness, opportunity and threat, will be used to gather the internal and external vulnerabilities affecting the hotel.
Strength:
The hotel brand has an established name in the tourism and travel industry giving it an edge over others, as the most preferred hotel by business travellers and tourists. This is due to its ability to offer exemplary luxury standards taking into account elements of innovation and food design. The hotel chain is considered a leader in creativity, stylistic apartments with major developments being made to incorporate design features, hence giving it an edge over its competitors, as well as attracting more travelers. The hotel brand also uses a unique visual branding strategy that positions it hence clearly stamping its lead over other hotels.
Weaknesses:
Mercure hotel faces stiff competition from upcoming hotel chains such as ibis. This stiffens the competition as more hotels are staging war by establishing hotel suites to edge the company. This weakens its market share thereby allowing other brands to eat into its income.
Opportunities:
The hotel chain unique position gives it an opportunity to grow its profitability and income levels by establishing other units across the country. This gives the hotel an advantage of maximizing its revenue through additional units which it establishes. The hotel also has an advantage of being able to grow its market through acquisitions which increases its footprints.
Threats:
The hotel considers government regulations as a threat to its operations, for instance since the government allows its employees to be unionized which weighs down its cost structures, in terms of the bargaining power.
PESTLE analysis
This is a framework used for conducting a scan on potential factors that affect the organizations ability to meet its objectives if not managed (Webster & Williams, 2010). It gathers information from the macro environment that affects the strategic operations of the company from the external environment.
Political:
The hotel’s operations are influenced by political activities of the country. These include government policies, tariffs and laws governing trade in the country. Higher tariffs levied by the government on travellers and tourists tend to reduce the occupancy rates.
Economic:
Economic attributes continue to affect the operations of the company. This is because the economy of the surrounding areas directly affects the revenue streams of the company, which also tends to strain its budget. Economy also affects the travellers due to economic constraints reducing their income. The company is mainly affected by higher inflation rates that directly affect the pricing strategy hence influencing the decisions of travellers.
Social:
Social attributes continue to influence the operations of the hotel chain due to socio-cultural elements and shifts in consumer attitudes which weigh down on the occupancy rates of the hotel.
Technological:
The hotel has potential due to its vast use of information technology to streamline its operations. The company uses its IS platforms and technological based platforms to connect multinationals, hence reducing travel and at the same time attracting corporate firms to using its resources.
Legal:
Laws and regulations affect the operations of the hotel in that the laws governing the country tend to tighten some areas in the hotel industry. Legal elements discourage the use of tobacco and cigarettes in the hotel, while liquor is also discouraged hence driving away customers.
Environmental:
These factors influence the hotel’s surrounding settings, in terms of the use of sustainable and green technologies that do not influence the environment. The hotel operations are influenced by the use of efficient energy resources that do not constraint other energy sources that can have negative impact on the environment by producing smoke and other dangerous elements. This guides the use of energy resources such as gas use to reduce dependence on diesel generator that produce dangerous carbon compounds that can affect employee health.
TOWS analysis:
This uses a matrix as a conceptual framework to analyze a match of threats and opportunities from the external environment of an organization (Koontz & Weihrich, 2010).
Internal factors
| Internal factors
External factors |
Internal strengths | Internal weakness |
| External opportunity | Strength – opportunity
Maxi-maxi strategies |
weakness – opportunity
Mini-maxi strategies |
| External threats | Strength-threats
Maxi – mini strategies |
Weakness-Threats
Mini-mini strategies |
Internal strengths:
The hotel brand has strengths in operations management, research and development. The management employs innovative methods due to a strategic based research team tasked with implementing designs which positions the brand in the market, and on the other hand complements its strategic marketing initiatives.
Internal weakness:
The hotel chain faces the challenge in importing modern construction materials due to constrain in financial resources and high prices. This affects the innovative strategies being implemented by the research and development team, which also detriments its strategic marketing approach.
Strength – opportunity:
This is a strategy that uses the strengths to take advantage of the foreseeable opportunity (West et al. 2015). The hotel chain operations adapts with the needs of the customers which enables it to remain the preferred hotel for travellers across the regions. This is due to the competent research team, which the hotel capitalizes on. In doing that, the hotel positions itself in the minds of customers.
Weakness opportunity
The hotel chain uses locally designed energy based solutions to blend with the costly modern building materials. This opportunity helps attract travellers with different perceptions of quality and design, an attribute that works for the company.
Strength – threats
The hotel’s brand positions it as a leader in the hospitality segment. The hotel uses this perception to attract and retain more customers hence growing and solidifying its base that neutralizes the effects of the stiff competition in the hospitality segment.
Weakness-threats
The hotel uses energy based solutions in its establishments with low number of rooms due to high prices. This strategy is used as a complement to wow visitors and avoid low occupancy rates due to stiff competition. This strategy adheres to the government policies in environment hence establishing political goodwill, which in turn markets the hotel within the tourism circuits.
Key issues, challenges and barriers to higher success rates.
The hotels perception that it has remained the leader in the market slows down effective marketing strategies by the marketing department. The hospitality industry is volatile and is constantly affected by cultural, social and economic issues. The hotel has consistently neglected these attributes, which its potential competitors are aggressively utilizing to weigh down its market share. The marketing elements lack cultural attributes to attract modern clients with varying cultural perspectives. This brands the hotel as an establishment to suit a particular culture hence limiting brand penetration and occupancy rates due to a misguided marketing effort.
Another challenge in the hotel is to maintain high occupancy rates and profitability due to high investment costs in product technology. The hotel faces stiff competition leading to a reduction in the number of customers as a result of ignoring the cultural element, hence eating into its profits by rival establishments.
The hotel is also affected by cost overruns and expensive capital that it uses to import expensive materials. This reduces its growth potential in that it establishes its brand in specific destinations, hence not maintaining consistency in every location. This affects its success rates.
However, SMART marketing objectives can be used to overcome the barriers in the implementation of strategic marketing. They should be guided by realistic figures that are attainable and can be quantified over some duration (Wright, 1999).
SMART Objectives:
- To achieve sales worth $2500000 over the next two years.
- To grow the market with diverse cultural elements by 75% in the next two years.
- To achieve a 25% increase in room occupancy rate in the energy based establishments.
- To increase awareness in the use of environmentally friendly materials to attract environmental conservatives to reduce customer exit rates by 35% in the energy based constructed hotel establishments.
- To increase the use of branding tools to grow the customer base by 45%, as well as increase brand equity by 20% by next year.
The hotel also uses segmentation, targeting and positioning as a marketing mix.
Segmentation:
This involves dividing a market into homogenous subsets so as to tailor specific tactics on the given markets (David & Buttle, 2012). The hotel can use this strategy to divide the segments into corporate clients and those leaning much on psychographic attributes. This is because the pricing strategy suits the corporate customer segments that face less competition since they focus on technological based solutions like video conferencing and tele-conferencing that the hotel has heavily invested on. The hotel should focus on the conferencing market as a way of cushioning it against market forces such as inflation that reduce occupancy rates and travel among business travellers. This segmentation variable would be appropriate in the specific market where the hotel would be pictured as the preferred choice among corporate customers.
Psychographic segmentation should also be implemented by the hotel to attract culture-sensitive customers. This strategy is based on consumer personality, value and lifestyles (Yalch, 1998), and can be used to attract clients with varied cultural perspectives. This will reduce perceptions of neglect by other customers to attract more customers. The psychographic segmentation is known to work well in multi-cultured environments (Weintraub & Litwinka, 2013), which would be beneficial to the hotel chain.
Targeting:
Targeting as a marketing strategy involves identifying a given industry and customizing a service and product offering towards the targeted market (Vyge & Buckner, 2012). The strategy would be appropriate for the hotel since competitors rely on the regular customers. This would involve targeting the business travellers and long stay clients, by tailoring affordable packages to suit the business model based on maximizing an economy by growing numbers and increasing market share. This would also maximize occupancy rates on all establishments due to an attractive offer to the business and long stay customers.
Positioning:
Positioning refers to the design of the image of an organization so as to enable it to be occupied in the minds of the target customers (Kotler & Scheff, 1997). This can be achieved by the hotel through price differentiation, to enable it to be known among long stay frequent customers and business travellers. This would increase the retention rates among customers in times of challenging economic situations, and on the other hand grow its market among budget customers. This perception in the price model would be associated with the hotel brand, hence would position it in the market among hotels with best bargains for business and long stay travellers, making frequent visitors to have the hotel in mind.
The hotel also has a unique brand identity that helps it to strategically position its uniqueness. A brand identity is referred is an impression, imprint or mark by which an organization is recognized (Sicard, 2013). The hotel chain has positioned its brand as the preferred choice for long stay and business travellers as well as corporate multinationals. This has increased its brand equity, where it is considered as a hotel that tailors its needs to accommodate long stay and business travellers. This also has had immense commercial value on the hotel’s brand, since it attracts large number of business and long stay travellers hence increasing its revenues, market share and room occupancy rates.
To increase its brand equity, the hotel should use brand tools such as social media, blogs and YouTube. The social media tool will be used to engage the online consumers on the offers of the hotel brand. The blog will be used to highlight a traveller’s experience after visiting the hotel. It will highlight the positives to increase the brand equity. On the other hand, YouTube will advertise the hotels facility where recorded video will be posted, which will in turn attract customers and increase the brand equity. The hotel should also implement a marketing mix in its strategic initiatives. This is a combination that involves the use of price attributes, advertising and promotional elements in marketing management (Reid & Bojanic, 2010).
The pricing model should be tailored to attract the segment of corporate travellers, which would sustain the heightened competition with rival brands. The advertising strategy should also be used together with psychographic attributes to attract more culture sensitive and value based customers.
The advertising component would also use internal and external attributes to set the promise for the customer and enable the promise through stimulating employees to deliver on the set promises as passed through the media. In this marketing perspective, the advertising attribute will have raised the bar of the standard of the hotel, and as such, the management would work towards delivering the standards and meeting the expectations of the customers, hence enhancing the service quality. The promotional activities should also be used to lure additional customers to the hotel by offering discounts based on the number of occupancy rates within the hotel. This strategy would enable the hotel to blend service attributes with physical and tangible elements hence would help set the bar so as to enhance service quality. The set elements as initiated by the marketing mix would force the hotel to deliver as by the set standards. This would pay hence the initiative would stimulate the management towards increasing service quality in the hotel.
Corporate social responsibility defined as the social responsiveness of organizations due to societal relationships (Hopkins, 2007), is used by the hotel. It uses eco-friendly techniques that reduce the emission of dangerous carbon compounds. This is implemented through a solar system, reducing the emission of poisonous fumes that are harmful to employees and degrades the environment. This substitutes the use of generators that emit smoke to power the buildings. Another approach is reducing lead in roofing materials and paints. Lead being a dangerous compound may react to produce dangerous compounds that are harmful to the skin.
However, despite the needs of the hotel to attract more customers, there is need to implement in-house CSR activities to motivate the workforce. This is because quality will always be realized when a workforce is motivated and appreciated in various ways. The hotel should recognize exemplary service among employees, to make them feel appreciated. This will increase satisfaction that will ultimately impact on the quality aspects. The employees should also be well remunerated in benefits and allowances. This would reduce instances of lawsuits by unionized employees, hence would maintain service levels and brand image. A motivated team would go a mile to enhance the services, which is also pegged on how much CSR activities benefit the hotel’s workforce.
Appendix
Figure shows the external environment where Mercure operates
(Source: True score)
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