Marriott International Hotels’ Market Segmentation

Abstract

Changes experienced in the global economy have transformed the lifestyles, behaviors, and expectations of many people. Researchers who have been observing these changes have managed to develop new theories that can be applied in the field of marketing. This report describes the importance of market segmentation and how it fosters business performance. This research paper examines the segmentation approaches used by Marriott International in an attempt to achieve its aims. The paper goes further to offer meaningful recommendations that can guide Marriott International to remain competitive in its market segment.

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Introduction

Business organizations in different industries use various strategies to achieve their potential. Every corporation should implement apposite action plans to deal with competition and remain relevant in its sector. Some of these functions include management, marketing, decision-making, and manufacturing. Companies operating in different sectors should focus on specific strategies to remain competitive. Marketing is a process characterized by diverse techniques aimed at selling various services and products (Rudez, Sedmak & Bojnec 2013). To make the process successful, businesses should conduct appropriate studies to clearly understand the expectations of their respective customers. Marketing is a complex process characterized by various practices such as planning, segmentation, and positioning.

Marketing is a field that has received much attention from researchers and entrepreneurs within the past two decades. Modern scholars have presented new ideas and concepts to describe how marketing can be done differently and eventually deliver tangible results. The move is believed to have transformed the nature of traditional or contemporary marketing. One of the approaches or practices that has benefited from the works of many researchers is known as market segmentation (Birjandi, Hamidizadeh & Birjandi 2013). Although the concept of segmenting markets based on consumer differences is not new, researchers have managed to advance the approach in an attempt to maximize sales. Companies can redesign their marketing processes to attract and satisfy the changing needs of more customers. This research paper begins by giving a detailed literature review of market segmentation. The information will then be applied to the tourism sector. The selected organization in the tourism industry is Marriott International.

Background Information

Nella and Christou (2016) define market segmentation as the process of ‘dividing a given market into manageable units’ (p. 38). Many proponents of market segmentation believe strongly that different markets tend to be less (or not) homogenous. The marketplace is characterized by a wide range of segments or groups. The groups portray similar or diverse purchasing behaviors (Zivkovic, Gajic & Brdar 2014). A marketer who is aware of some of these differences in consumer behaviors will develop the most appropriate strategy. A proper understanding of the needs and expectations of more customers in different segments can result in increased sales and profits.

Psychographics are used to study people’s emotional responses and personalities (Monrabal 2014). The use of psychographics guides marketers to understand why a given person will be willing to purchase a certain product. More often than, companies collect consumers’ information through the use of surveys, purchasing patterns, and interviews. Geographical locations have been embraced by marketers to design appropriate models for delivering different products to the end-users (Chu 2014). An organization can use this knowledge to attract more customers. The company can go further to focus on areas characterized by high population densities. Climatic conditions in certain areas can be used to determine the right channels to deliver products to the targeted people.

Behavioral attributes have been supported by many marketing theorists because they can support the idea of segmentation. Human beings tend to portray specific behaviors that have been studied by researchers within the past decade (Schwarzl & Grabowska 2015). Market segmentation is incomplete without effective targeting and positioning (Owen & Humphrey 2014). Market targeting is usually conducted based on the attractiveness of each of the outlined segment. The most appropriate segments are then selected before undertaking the positioning process. Nuseir (2015) argues that product positioning is a powerful initiative whereby the marketer designs an effective mix for the outlined segments. The approach will inform and encourage more customers to purchase the product.

Methodology

A simple methodology was considered to complete the study (Chu 2014). A qualitative study was done by examining the major trends and processes adopted by companies in the hospitality industry within the past ten years. Specifically, the study focused on the methods of segmentations implemented by different companies in the sector. The next move was to analyze the segmentation strategy associated with Marriott International.

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Results and Findings

Marriott International is one of the leading organizations in the global hospitality industry. The company was founded in the year 1927 by two young entrepreneurs named Alice Marriott and J. Willard (Find your perfect hotel room with Marriott 2017). Within the past 80 years, the hospitality company has continued to provide exemplary experiences and services to many customers in different parts of the globe. The company has its headquarters in Maryland, USA (Find your perfect hotel room with Marriott 2017). Currently, the company has over 3,900 properties in the United States, Europe, and Asia. The organization has managed to establish over 18 reputable brands that continue to meet the needs of the customers.

In 2014, the company recorded revenues amounting to thirteen billion US dollars. Marriott International has continued to introduce new services and products. The company franchises a wide range of services related to lodging and hotels. The company utilizes enviable marketing practices in an attempt to remain competitive. The success of Marriot International is, therefore, attributable to the nature of its marketing model.

Many companies in the tourism and hospitality industries use various strategies to attract different customers and eventually maximize profits. The leading players in the global tourism industry occupy the hospitality sector. Different organizations use market segmentation to achieve their goals. Marriott International has been segmenting its market using the concept of hotel type (Lockyer 2013). Firms can utilize the approach to segment their hotels using different aspects such as economy, extended stay, upscale, luxury, and midscale.

Marriott International’s market segmentation follows this kind of strategy. The company has luxury hotels to ensure the market is segmented accordingly. These luxury hotels usually focus on high-end guests. Such visitors are usually from different regions across the world. The construction of many luxury hotels has made it easier for the organization to attract specific persons who continue to support its business model. The second kind of segmentation is focused on the concept of lifestyle. This strategy focuses on individuals who have unique lifestyles and living standards (Birdir 2015). The luxury hotels characterized by gardens and parks make it easier for more tourists to feel at the home.

Marriott International focuses on different groups throughout the segmentation process. Some of the common groupings include demographic, geographic, behavioral, and psychographic (Swart & Roodt 2015). Chu (2014) supports the use of demographics to segment a given market. The targeted customers are usually grouped based on several demographical attributes such as ethnicity, education, income levels, age, and personal careers (Salman et al. 2017). These aspects have been guiding the company to come up with an effective strategy to market its services or products.

The use of Extended Stay arrangements encourages guests to visit different hotels where they can feel at home. The segmentation approach attracts specific persons who would like to stay in a particular area for more than a week. Another unique attribute of Marriott International’s market segmentation entails the placement of different brands adjacently to each other. For instance, the hospitality company is known for its Resident Inn and Courtyard arrangements (Chen 2013). These two brands are usually placed in the same location thus making it easier for different customers to make appropriate selections.

Discussion

Experts believe that market segmentation is an evidence-based approach capable of maximizing the performance of a business company. The process is associated with various goals that take an entrepreneur closer to his or her goals. Swart and Roodt (2015) indicate that entrepreneurs can use various categories to segment their markets. At Marriott International, segmentation is executed to ensure specific customers with similar behaviors and needs are presented with similar products or services (Bercea 2013). The approach guides markets to identify the most appropriate segment to consider throughout the process.

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Market segmentation has been embraced by many people because it guides them to determine the most appropriate initiatives to position their products. The concept of segmentation guides companies to develop superior campaigns that can sustain the marketing process. Marriott International has continued to use market segmentation to target different customers or tourists (Riley 2014). The company has managed to create sixteen diverse facilities that are designed to meet the needs of more clients. The leaders at the organization understand clearly that a single hotel type is incapable of meeting the needs of its clients. That being the case, the segmentation approach has been expanded to include different variables that can maximize sales.

Demographic variables are used to support the company’s market segmentation. The company has come up with diverse hotels that meet the needs of diverse groups of people based on aspects such as age, culture, religion, occupation, and length of residence. As mentioned earlier, the Extended Stay arrangement works effectively for persons who want to stay for longer (Riley 2014). Lifestyle hotels mainly focus on tourists who have better salaries. Some arrangements are characterized by more beds in a room to accommodate families with more than three people.

The lifestyles of different tourists are taken seriously to come up with the best offerings for them (Jauhari 2014). The managers at the company examine the lifestyle attributes of different persons such as hobbies, vacations, and recreational pursuits (Birdir 2015). Some hotels and lodging services are designed in such a way that they can meet the needs of more tourists.

The use of geographic segmentation has been considered in the recent past by this organization. Depending on the responsiveness of customers in different regions, Marriott International has been moving swiftly to invest and benefit from emerging economies especially in the Asian market. The company is using Courtyard and Marriott Hotels and Resorts to invest in the Asia-Pacific market (Riley 2014). This geographic segmentation is supported by the fact that the economy of the region has been growing steadily. The region’s hospitality industry has also continued to attract more customers and players from different parts of the globe.

Conclusion and Recommendations

The managers at Marriott International clearly understand the importance of segmenting the market and providing adequate products that resonate with the needs of the targeted customers. The company constructs hotels depending on the targeted customers and their expectations (Salman et al. 2017). More tourists have therefore been able to choose affordable hotels where they can stay. The corporation has succeeded because of its segmentation strategy. Different variables such as personal preferences, demographics, behaviors, and geographical areas inform the segmentation process. The company goes further to use the concept of targeting and positioning to deliver services that can meet the needs of the segmented groups of visitors (Find your perfect hotel room with Marriott 2017). The company puts much emphasis on the identification of new segments. It also attracts and retains customers from different regions depending on their expectations.

The completed study has revealed that Marriott International’s success is attributable to the nature of its segmentation model. Through the use of the strategy, the corporation has managed to deliver high-quality services to its customers. Some proposals can be presented to guide the company as it plans to expand its operations. The first recommendation is that the company should support its current segmentation strategy (Salman et al. 2017). This is the case because the model is capable of delivering meaningful results. The second one is for the company to expand its operations by investing in emerging markets such as China, India, and Latin America. Such recommendations will make Marriott International a leading player in the global hospitality sector.

Reference List

Bercea, M 2013, ‘Quantitative versus qualitative in neuromarketing research’, MPRA, vol. 1, no. 1, pp. 1-12.

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Birdir, S 2015, ‘Segmentation of tourist using demographic and travel characteristics: the case of Istanbul’, International Review of Management and Marketing, vol. 5, no. 4, pp. 221-229.

Birjandi, M, Hamidizadeh, M & Birjandi, H 2013, ‘Customer segmentation based on ‘benefit sought approach’: case of Sehat shampoo in Iranian market’, Issues in Business Management and Economics, vol. 1, no. 2, pp. 13-21.

Chen, J 2013, Advances in hospitality and leisure, Emerald Group Publishing, Bloomington, IN.

Chu, Y 2014, ‘A review of studies on luxury hotels over the past two decades’, Digital Repository, vol. 1, no. 1, pp. 1-91.

Find your perfect hotel room with Marriott 2017, Web.

Jauhari, V 2014, Managing sustainability in the hospitality and tourism industry, CRC Pres, Boca Raton, FL.

Lockyer, T 2013, Global cases on hospitality industry, Routledge, New York, NY.

Monrabal, J 2014, ‘Marketing communications in industrial B2B markets enhancing the value of the corporate brand relying on common added values’, MINIB, vol. 5, no. 1, pp. 187-191.

Nella, A & Christou, E 2016, ‘Extending tourism marketing: implications for targeting the senior tourists’ segment’, Journal of Tourism, Heritage & Services Marketing, vol. 2, no. 1, pp. 36-42.

Nuseir, M 2015, ‘Internet marketing and its impact on online communities’, International Journal of Business and Social Science, vol. 6, no. 10, pp. 176-186.

Owen, R & Humphrey, P 2014, ‘The structure of online marketing communication channels’, Journal of Management and Marketing Research, vol. 1, no. 1, pp. 1-10.

Riley, M 2014, Human resource management in the hospitality and tourism industry, Routledge, New York, NY.

Rudez, H, Sedmak, G & Bojnec, S 2013, ‘Benefit segmentation of seaside destination in the phase of market repositioning: the case of Portoroz’, International Journal of Tourism Research, vol. 15, no. 1, pp. 138-151.

Salman, D, Tawfik, Y, Samy, M & Artal-Tur, A 2017, ‘A new marketing mix model to rescue the hospitality industry: evidence from Egypt after the Arab spring’, Future Business Journal, vol. 3, no. 1, pp. 47-69.

Schwarzl, S & Grabowska, M 2015, ‘Online marketing strategies: the future is here’, Journal of International Studies, vol. 8, no. 2, pp. 187-196.

Swart, M & Roodt, G 2015, ‘Market segmentation variables as moderators in the prediction of business tourist retention’, Service Business, vol. 9, no. 3, pp. 491-513.

Zivkovic, R, Gajic, J & Brdar, I 2014, ‘The impact of social media on tourism’, Sinteza, vol. 1, no. 1, pp. 758-761.

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