Marriott Hotels: Case Study

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Background Information

Marriott Hotels is among the largest hotel chains in the hospitality industry. The business has three main market segments divided geographically: the Asia Pacific, North American full service, and North American limited services. By 2018, Marriott Hotels had approximately 176,000 employees working across 134 countries (Marriott Hotel, no date). With over 6,906 international properties and 30 brands, Marriott Hotels enjoys a strong brand recognition in the hospitality industry. This paper provides a comprehensive analysis of the organization’s marketing strategies.

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Segmentation and Targeting Strategies

Marriott Hotels’ marketing and promotional strategies mainly advertise the differentiating features of its services to attract sales: its primary marketing channels are social media and website. The organization mostly uses offensive approaches to improve its performance and market position. Offensive strategies involve “attacking” the weak points of rival companies with the intent of withdrawing or detracting customers from them. Marriott Hotels always pursues innovative services, which draws sales away from rival companies with weak innovative capabilities.

Given its strong brand identity, the firm can make strong sale pitches against competing hotels with weak brand identity. All Marriott hotels worldwide are recognized as premium hotels rated from five to seven stars (Marriott hotel, no date). From the company’s website, one can tell that the organization provides top-quality services to its customers. Providing high-quality services is an offensive strategy that companies can employ to draw customers away from companies that lag on quality.

Another key marketing strategy employed by Marriott Hotel is segmentation. Segmentation refers to dividing a heterogeneous market group into smaller homogenous groups. Marriott Hotels has adopted three main segmentation strategies: geographic, psychographic, and demographic.

The target customers of Marriott Hotels are segmented par their income level (demographic), interests, and lifestyles (psychographics), and destination preferences (geographic segments). It uses a differentiated marketing strategy, whereby a unique marketing mix (4-Ps) is developed for each of the identified divisions.

The main defining feature of the demographic segment is the income levels of the target population. The services offered include luxury, premium, and select services (Marriott hotel, no date). The company brands are designed to meet unique customer needs o each segment. Marriott Resorts, JW Marriott, Ritz Carlton, and Stregies strive to fulfil individuals with a desire for upscale living.

It addresses the psychological needs of individuals who associate expensive or high prices with quality, fulfilling their desire to belong to a high social status. In comparison, while the luxury services target high-income individuals and the upper class, the select-services target price-sensitive customers. The pricing of the luxury bundle differs from that of the premium and select brands.

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Marriott Hotels also provides services based on individual interests and lifestyle preferences (psychographic segment). It has a unique service bundle for couples, sports lovers, and car-lovers. Customers with families can opt for hotels equipped with kitchens. Consumers can also opt for services based on their interests or hobbies; these services include nature walks and climbing, beach adventures, road bike tours, kayak tours, etc. Clients can choose any destination of their choice in the geographic segment, including North America, Europe, Africa, Asia, the Caribbean Islands, Australia, and Pacific.

Choice Criteria

When making a purchase, a customer will compare available services and evaluate their strengths and weaknesses before deciding. The customer’s decision will be based on an attribute they value the most. Car renting is among the primary services offered by Marriott Hotels. The organization provides customers with a wide selection of car types and pickup and returns locations. Although lucrative, the car rental industry is characterized by stiff competition. For this reason, understanding the consumer’s purchasing behavior is essential for a company’s success.

The choice criteria for customers for car rentals include price, quality, and the number of service offerings. According to Nantasiri and Panvisavas (2019), consumers’ choice of rental cars will be determined by the physical products, price, promotions, and the place where service is offered. The range of vehicles available significantly influences the customer’s possible purchase (Nantasiri and Panvisavas, 2019). Consumers have different preferences, and, therefore, a firm that offers a comprehensive product choice is likely to meet the needs of a larger audience.

Considering the stiff competition, pricing strategies are essential in determining the viability of the car rental business. Nantasiri and Panvisavas (2019) support this viewpoint by positing that a consumer’s decision could be significantly influenced by pricing. The total cost of renting cars includes the base price of the service and add-ons such as taxes, insurance, and operational charges. Obscuring costs negatively affects a company’s selling prospects.

The third criterion for selecting the organization’s services relates to its offerings. According to Nantasiri and Panvisavas (2019), promotions can positively influence consumers’ reluctance to purchase the service. Car rental companies often use marketing strategies as a selling strategy to attract second-time purchases. A common approach is by incentivizing consumers with deals such as price cuts and upgrade offers for clients with high ratings.

Cost promotions are especially beneficial to price-sensitive consumers. However, high-income customers are less sensitive to pricing and, therefore, the company should consider different marketing strategies for this group. Given that Marriott Hotels target individuals of varying income levels, price promotions may attract a wider audience, including low-income individuals.

Another choice criterion is intangible factors such as the general quality of services offered by the company. The reliability and responsiveness of staff, especially the agency responsible for delivering the cars to customers, is a determining factor. Consumers can use the vehicle cleanliness, including the appearance and presentation of staff, facility, air quality, and cars, as a proxy for the quality of service offered.

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Identifiable Service Culture Elements

Service culture is a culture where quality services are appreciated and considered a natural way of life. It refers to how organizational practices, behaviors, values, and norms are aligned with the delivery of quality services. Culture does not pertain to external customers only: it also involves providing quality to internal customers (staff). Evaluating Marriott hotels’ organizational practices and business strategies can help determine whether the hotel is customer-centric.

Marriott Hotels’ business strategies are consumer-centered; the firm supports customer needs through policies, reward systems, and policies. Its differentiation strategy is characteristic of a customer-centric company. By segmenting its customers, Marriott Hotels can satisfy the individual needs and wants of each customer. The personalized services mediated by technology also allude to customer centeredness. Furthermore, the firm has also established several business processes to enhance customer experiences. Innovative technology has enabled the automation of administrative duties and hotel bookings.

For example, it has a reservation system that allows direct bookings from its website. The system has been integrated with the hotel’s infrastructure and payment portals; hence, streamlining the booking process. Given that the firm has an intricate distribution network, the reservation system prevents issues such as overbooking. Customers can cancel bookings and reschedule appointments at their convenience. Through 24-hour customer support service, the firm can promptly resolve problems affecting their guests. The staff friendliness also helps the firm to connect with guests and create meaningful relationships.

Marriott Hotels provides a safe and secure working environment for its internal customers. It strives to create a diverse and inclusive environment that respects individual differences. This way, the company provides a sense of identity and satisfaction to its internal customers.

Promoting cultural appreciation helps foster relationships within and outside the working environment (Marriott International, no date). The organization has also established a two-way communication system that allows both workers and consumers to provide feedback on pertinent issues (Marriott hotel, no date). Providing an open communication system enables the firm to obtain critical information on how to improve customer experiences.

Every year, the company awards and incentivizes employees for providing quality services to customers. This is done through its compensation strategy referred to as the “Marriot Awards of Excellence” (Marriot International, no date). Developed in 1987 and accorded the designation of J. Willard Marriot, the company’s founder, the above-mentioned approach the establishment’s best associates who epitomizes the award’s characteristics (Marriot International, no date). According to the institution’s website, these qualities include character, dedication, efforts, and achievements (Marriot International, no date).

Customers can also vote for the best employees by rating their services. Employees with the highest ratings get incentivized. Another compensation approach by the company is the four-grouping award. This incentive strategy is presented to employees with excellent corporate citizenship, diversity and inclusion efforts, excellence, and demonstrating company core values (Marriott International, no date). For example, the TakeCare program was initiated by the hotel to improve healthy living and a positive lifestyle.

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The program trains employees on nutrition, business etiquette, communication, cultural appropriateness, and stress management to promote its culture of healthy living and putting people first. According to the company, the TakeCare program has helped its staff to provide better services to their customers (Marriott International, no date). Other incentives include apprenticeships, which can result in full-time employment.

The J. W. Marriott Diversity Excellence Award has helped the company create a sense of communal living and family values among its employees. The company claims that by celebrating diversity, the turnover rates have reduced by 40% since 2014 (Marriott International, no date). A low turnover rate is often an indication of employee satisfaction. A company culture that supports customer needs is customer-centric. Through incentives, employees at Marriott are motivated to deliver outstanding services to guests. Incentives influence behaviors, attitudes, and commitment to achieving company goals.

Marriott Hotel’s mission statement states that its primary purpose is to enhance customers’ lives by creating exquisite leisure experiences (Marriott Hotel, no date). All business practices in the company have to align with its mission. For example, when the company acquired a new firm, it partnered with a public relations firm to train the marketing team on its purpose. The company communicated its values and objectives, which set the atmosphere on the value it places on meeting customer expectations.

Customer Retention Strategies

Due to the increase in competition, customer retention has become an essential phenomenon in business. In a saturated market, customers’ growth can be relatively slow, making customer retention equally important as customer acquisition. Additionally, retaining customers is cheaper than attracting them. According to Nasir (2017), the cost of acquiring a single customer is six to seven times more than retaining an existing customer. Therefore, customer retention is essential for the long-term financial survival of a company. The customer retention strategies employed by Marriott Hotels include strong brand identity, smart pricing, and service innovation.

A strong brand identity is the organization’s primary customer retention strategy. A study conducted by Nazir, Ali, and Jamil (2016) revealed that a strong brand identity effectively attracts and retains customers. The above-mentioned approach increases consumer loyalty by attracting brand allegiance (Nazir, Ali, and Jamil, 2016). When clients are loyal to a brand, they repeatedly purchase a product or service from the business.

This conception is only attained if the consumers trust the brand or have positive experiences and attributions to the commodity. Due to its strong presence in the hospitality industry, Marriott International has successfully achieved a strong brand identity in its market segment. In part, due to its premium services, Marriott Hotels has established a positive reputation in the market.

By creating a positive reputation, a company can create a strong brand identity in its segment; hence, attracting loyal customers. Relationships between businesses and customers also tend to increase over time (Nasir, 2017). Another important aspect is that clients are usually willing to pay premium prices for services when loyal to a brand. When customers are satisfied with a company’s services, they are likely to trust and establish a relationship with the business.

The concept of brand loyalty is grounded on resource dependency theory, which asserts that a business’s relationships and networks can influence its bargaining power and leverage in the market. According to the resource dependency postulation, positive relationships and social networks can help a company navigate uncertain business conditions (Sambou, 2020). This theory highlights the importance of relationship marketing concepts on business success.

The second customer retention strategy employed by the company is service innovation. A study conducted by YuSheng and Ibrahim (2019) revealed that innovation in the service industry improves customer satisfaction and loyalty. This survey suggested that firms can leverage innovative products and services to become a market leader (YuSheng and Ibrahim, 2019). As demonstrated in our previous analysis, brand loyalty can retain customers. An example of an innovative service offered by Marriott Hotels is the use of technology to address customer issues instantly.

Marriott Hotels use Big Data to personalize and enhance customer experiences. It collects personal data (with authorization) and uses it to construct a personalized welcoming message and itinerary for their guests. For example, when a customer checks into their hotel room, they are welcomed with a message such as:

Hello, Henry — welcome! We know you just flew in from Dubai and we’ve put a lovely amenity in your room to help you get over your jet lag. We also know you love running, so we’ve mapped out a great route that you might want to explore (Bova, 2018).

These personalized experiences mediated by technology give customers a unique experience and makes them feel valued. According to Nazir, Ali, and Jamil (2016), these brand experiences are effective customer satisfaction measures and a strong predictor of a customer’s actual buying behavior.

The third customer retention strategy used by Marriott Hotels is smart pricing. A commodity or service’s cost is a critical choice criterion when a customer makes a purchasing choice. Marriott Hotels uses the above-mentioned approach to appeal to their target populations. It maintains a lineup of service selections that include economy-priced, also known as a classic package, for price-sensitive customers. Marriott International does not have a fixed price for all its services; instead, it adjusts its prices depending on the market demand and customer needs.

This approach involves selecting prices that will have a significant impact on profits while at the same time serving the needs of each targeted segment. This way, the firm can maintain a targeted profit margin while being affordable to consumers. A survey conducted by Azad and Singh (2019) established that a strong relationship exists between pricing strategies and customer retention capability. The study indicated that consumers prioritize product price over product quality (Azad and Singh, 2019). Marriott Hotels’ smart pricing strategies significantly contribute to the firm’s efforts to retain existing customers.

Management and Evaluation Issues

The primary issues impacting the management and assessment of the hospitality sector’s sales and marketing personnel include the validity and appropriateness or effectiveness of the performance analysis information, distress within the sales force, and sales force retention. Performance evaluation relates to the systematic assessment of workers’ performance to comprehend the adroitness and capabilities for further development and growth in their respective professions.

It involves the employees’ productivity and contributions, providing feedback and identifying approaches aimed to improve their performance (Najafi et al., 2015). There is an interconnection between performance management and evaluation -both concepts aim to enhance significant improvements in team members’ performance. To effectively manage employees, data needs to be collected on key measures.

One needs to establish standards which will serve as a baseline for comparing the real performance of workers. Performance assessment attempts to evaluate and convey the extent to which specific performance aspects address an organization’s goals (Najafi et al., 2015). This is an essential metric used to indicate how a department or entity is advancing towards its objectives. It also identifies areas of improvement for future quality improvement initiatives.

However, performance management and evaluation require continuous data collection, analysis, and intervention process. Using multiple performance measures has been identified as a more effective approach than utilizing a single measure. According to Lizarondo, Grimmer, and Kumar (2015), during the performance evaluation process, managers should obtain data from various sources to get a comprehensive picture of employee performance.

Unfortunately, the hospitality industry does not have a consensus on which work practices should be measured to improve organizational and individual-level performance. This position was established by an empirical study that reviewed literature published from 1991 to 2015 (Murphy et al., 2018). Without appropriate performance measures, there is a risk of basing performance evaluation on invalid, irreproducible, and discriminative criteria. Valid and reliable performance measures help to articulate quality goals and determine training needs. It also helps the management to plan and avail resources and infrastructure needed to support the process.

The second issue relates to the distress within the sales force. Stress is an integral factor in managing and evaluating marketing and sales personnel within the hospitality industry. It is a psychological condition that results from undue pressure on brain activity due to emotional tension expressed in anxiety, fear, anger, frustration, and nervousness. Distress may cause negative effects on employees’ performance (Nazir, Ali, and Jamil, 2016).

For instance, according to a study by Najafi et al. (2015), stress may trigger behavioral, emotional, and physical issues that could impact a worker’s mental alertness, energy, health, as well as professional and personal relations. Furthermore, Najafi et al. (2015) associate distress within the workforce with interpersonal conflict, reduced productivity, accidents, difficulty concentrating, lack of motivation, increased absenteeism, and defensiveness. The above-mentioned factors typically affect workers’ overall performance, which, in turn, impacts a company’s overall performance.

This viewpoint is supported by a study by Sambou (2020), who argues that whenever workers experience too much psychological tension due to stress, the performance drops significantly. The emotional and physical drain from anxiety, fear, and frustration adversely affects sales performance; hence, low output on sales targets.

On the contrary, manageable stress levels drive activity by increasing competitiveness and inspiration, whereby the sales team responds to the pressure and delivers on the results through managing sales-targets. This, in turn, improves team members’ performance management, in that it coerces the salespersons to give more output based on the push to ensure that they attain the set goals. Healthier employees working under manageable distress levels tend to be more positive and happier than those under high stress. They often work to maintain a healthy and robust workplace culture, which promotes productivity and creativity.

The retention pattern of the sales force within an organization can also have a profound effect on the marketing and sales personnel’s evaluation and management. This is a critical element that contributes to the overall success of any business. In ordinary business practice, a sales manager with facilitation from the Human-Resources department must undertake sales training programs to align and equip team members with appropriate skills (Sambou, 2020).

To realize outstanding performance from workers, a company must boost its employee management strategies to ensure that team members display high-level talent and adroitness, which contributes to the ultimate growth in sales and general productivity. The above-mentioned factor may impact the evaluation and management process in various ways.

For instance, according to Sambou (2020), this approach typically triggers high employee morale, reduced turnover rate, reduced costs, better consumer experience reduced training and acquisition time, which, in turn, improves workers’ overall performance and an organization’s productivity. On the contrary, this element may lead to the retention of non-performing workers, workplace groupism, poor working surroundings, poor work quality, low employee productivity, and the destruction of a company’s culture.

Conclusion

Marriott Hotels mainly uses offensive strategies to improve its market position. Its vital marketing strategy is differentiation strategy, where the target population has been divided into demographic, geographic, and psychographic segments. The segmentation has helped the organization to tend to the individual needs of customers in each division. The primary customer retention strategies include strong brand identity, smart pricing, and service innovation.

While deciding whether to buy their car renting services, clients will consider the price, quality, and the number of service offerings. However, the business should personalize its promotions/offers to suit individual needs to maximize its consumer appeal. The issues facing management and evaluation of sales and marketing personnel in the industry include costs, time, and validity and usefulness of performance evaluation data. The hospitality sector should develop high-performance work practices that will guide decision-making in the industry.

Reference List

Azad, S. and Singh, U. S. (2019) ‘A study on the effect of pricing strategy on customer retention in Kurdistan’, International Journal of Supply Chain Management, 8(1), pp. 98–112. Web.

Bova, T. (2018) ‘How Marriott is changing the hotel game with personalization’, Techonomy. Web.

Lizarondo, L., Grimmer, K. and Kumar, S. (2015) ‘Assisting allied health in performance evaluation: a systematic review’, BMC Health Services Research, 14(1), pp. 1–12. Web.

Marriott Hotel: Hotel directory (no date). Web.

Marriott International: Awards of Excellence (no date). Web.

Murphy, K., Torres, E., Ingram, W. and Hutchinson, J. (2018) ‘Does trust in organization mediate the influence of servant leadership on satisfaction outcomes among flight attendants?’, International Journal of Contemporary Hospitality Management 30(12), pp. 3555–3573. Web.

Najafi, L. et al. (2015) ‘Factors affecting employee performance evaluation In Hamedan Health network’, 5(S1), pp. 5378 – 5383. Web.

Nantasiri, S. and Panvisavas, V. ‘The selection criteria of factors influence customer decision making toward car rental services in Thailand’. 3rd International Conference on Tourism and Business 2019 Conference Proceedings. Lucerne University of Applied Sciences and Arts, Emmenbrücke, Switzerland. Nakhon Pathom: Mahidol University International College Publishing, pp. 128–130.

Nasır, S. (2017) Customer retention strategies and customer loyalty. Edited by Information Reso Management Association. Hershey: Business Science Reference.

Nazir, B., Ali, M. and Jamil, M. (2016) ‘The impact of brand image on the customer retention: a mediating role of customer satisfaction in Pakistan’, International Journal of Business and Management Invention, 5(3), pp. 56–61. Web.

Sambou, A. F. (2020) Understanding the motivation survival and growth of immigrant businesses in Finland. Master’s thesis. University of Oulu.

YuSheng, K. and Ibrahim, M. (2019) ‘Service innovation, service delivery and customer satisfaction and loyalty in the banking sector of Ghana’, International Journal of Bank Marketing, 37(5), pp. 1215–1233. Web.

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