Hospitality industry marketing planning. Radisson Edwardian Hotel in the UK - Essay Example

?Marketing Planning Summary Hospitality industry is one of the biggest industries in the UK which contributes almost 2.4 million jobs. The share of hospitality in the UK economy was almost ?46 billion in the year 2010 (BHA, 2010). The report describes the SWOT analysis and PESTLE analysis and its impact on hospitality industry. The organisation chosen for this report is Radisson Edwardian Hotel in the UK. It is one of the famous luxurious hotels in the UK. Further, this report will outline the 7Ps of marketing and how Radisson Edwardian Hotel applied 7Ps in their hotel. Table of Contents Table of Contents 3 Introduction 4 SWOT Analysis for Micro–Environment 4 PESTLE Analysis for Macro Environment 5 The Marketing Plan 8 7Ps of Marketing for Radisson Edwardian Hotel 8 Planning a Promotional Campaign 10 Financial Information for Promotional Campaign 11 Conclusion and Recommendations 13 References 14 Introduction SWOT analysis is a strategic planning technique which can examine the strengths, the weaknesses, the opportunities and the threats of a business. It is a basic form which serves as a centre for creating marketing plan. SWOT analysis reveals the positive conditions for a company to operate and adverse conditions which can occur for a company. SWOT analysis acquires information from micro-environmental analysis and divides it into internal aspects and external aspects. After completion of SWOT analysis, one can understand how to accomplish the objectives of company and what difficulties can come for accomplishing desired outcomes (Danca, n.d.). SWOT Analysis for Micro–Environment The micro environment includes stakeholders that a company deal with frequently. SWOT analysis can help to reveal the elements of microenvironment. Competitors: The success of any company depends on the level of competition in the market. In a certain market, one company lead over other companies. In the UK, if any company has market share of above 25% then it can be considered that the company has monopoly. In that case the company can charge premium prices. In certain markets only a limited number of companies dominate which is called oligopoly. In the UK insurance, vehicle, supermarket and banking, oligopolies prevail. The hotel industry in the UK is competitive market because there are many organisations which provide luxurious five star hotel services in the UK and thus customers have many choices. Thus, in the hotel industry there is requirement to provide excellent customer service (Oxford University Press, 2007). Customers: The customers are the major factor in sales. Hotel managers always monitor the requirements of customers and attempt to foresee how to fulfil those requirements. A SWOT analysis can help to satisfy the requirements of customers. While analysing the strengths of a company it is considered from two points of view i.e. the company as well as its customers with whom it deals with everyday. A customer oriented SWOT helps to uncover a company’s weaknesses (Danca, n.d.). PESTLE Analysis for Macro Environment In macro environment there are several elements which can impact on decision of managers of hotel industry. For example, changes in taxes, trade barriers and changes in government rules and regulations, all these aspects come under macro environmental factors. The PESTLE analysis can help to evaluate those factors and classify them for the sake of the company. Political Factors: These factors consist of government policy and the level of interference in the economy. The political decisions affect on significant fields of business such as education, employment and infrastructure of country such as transport system. Political factor has major influence on the hotel industry in the UK. In the UK, the political condition is relatively steady. Issues such as terrorists attack specially the 11th September 2001 had affected the hotel industry in the UK. From 2000 to 2001, the expenditure of visitors for hotel decreased significantly. Furthermore, the terrorist attack on Turkey had affected the hotel industry in the UK. The cancellation of flights due to security reasons had resulted in hotel industry to incur losses. Economical Factors: The economy impacts on the purchasing power of customers and the hotel companies. The UK economy is known as one of the strongest economies in the world. The UK economy has advantage of low inflation rate. In the year 2004, the inflation rate was 1.3%. The unemployment rate is also minimal in the UK. In the year 2004, the unemployment rate was 4.8%. With regard to GDP, it has shown good growth about average 2.4% per annum and it is expected to increase further. Thus, the UK has low inflation rate, low unemployment rate and sound growth rate which can increase the spending of customers. As a consequence, these factors can contribute towards increasing the market reach of hotel industry (Barrell & Et. Al., 2006). Social Factors: The social factors have significant impact on the UK hotel industry. For socialising, majority of the people of the UK prefer to amuse with family and friends at house rather than going outside. A trend towards maintaining healthy lifestyle has also been observed in the UK. In recent times, there has been an increase in the level of anxiety in relation to safety and security while travelling among the citizens of the UK. The increasing number of households including dual income couple groups is a major trend towards varying lifestyle in the UK. Thus, it is hard to forecast its effect on the hotel industry. Technological Factors: The rapid development in technology influences the hotel industry in the UK. With respect to technology, UK is much advanced. Internet, videoconference greatly affects the hotel industry because the travellers want speedy access when they need any help. The number of travellers in any hotel depends on the good technological condition of that hotel because travellers come in hotel for many reasons such as meeting, business or just for leisure. The latest technology will help the hotel to make their customers satisfied and stay in that hotel longer or travel repeatedly. Environmental Factors: The environmental factor consists of weather and climate. The changes in weather can influence the hotel industry. The major challenge the UK is to confront the changing environmental condition such as the global warming and it is another concern for every hotel company. The increasing aspiration of protecting environment by enforcing more tax on the aviation travel can have an impact on the hotel industry. Legal Factors: The legal factors are connected to the legal environment where a company operates. In the UK, there had been many legal changes which influence a hotel company. For example, the age inequity and disability inequity rules, increase in minimum pay and larger prerequisite for company to recycle can impact on a company’s performance. These legal changes had affected the cost of the hotel company and the demand (Oxford University Press, 2007). The Marketing Plan 7Ps of Marketing for Radisson Edwardian Hotel The hotel companies in the UK compete consciously by providing superior services for making differentiation in the hotel industry. A successful company such as Radisson Edwardian focuses on good service to people and good technology. In marketing, the 4Ps represent are Product, Price, Place and Promotion. To recognise the disparities in services and goods, three extra elements had been added by Booms and Bitner which are People, Physical Evidence and Process and are known as 7Ps. Product: Product with regard to Radisson Edwardian Hotel is the package of services that it offers to the customers. Radisson Edwardian Hotel provides services which ranges from classic to luxury services. Key features of Radisson Edwardian Hotel includes wireless internet facilities in whole hotel premises, accessibility of newspaper, AC bedroom and conference room, luxury bar, satellite TV, hiring vehicle, storage facilities, theatre and side scenery booking (Radisson Edwardian, 2011). Pricing: The customers generally seek for hotels with reasonable and acceptable cost. Another factor regarding pricing of any service is the quality. It is a general assumption of the customers that premium price implies premium service. With regard to pricing, a company must consider the demand of the service. The pricing of service must consider the competitor pricing. Radisson Edwardian Hotel provides customers with exciting deal for saving money. For example, in case of early booking before 10 days it can save 10% of the cost. The rate of one room per night starts from ?189 which is comparatively low than other competitors of Radisson Edwardian Hotel (Radisson Edwardian, 2011). Place: The services of hotel cannot be accumulated or moved. The services in hotel industry is developed and sold at the same time (Scribd, 2011). Promotion: The promotion of hotel industry is focused towards the customers and employees. Promotion helps to motivate the employees to provide better services to the customers. The target customers of hotel industry are the purchaser, the influencer and the end user. In hotel industry, the promotion must be planned in such a way that it can influence the consumption of customers and motivate employees to do well. In the year 2005, Radisson Edwardian had developed an advertising campaign by aiming towards the top end of the hotel industry. The main philosophy of the advertising was to convey that customers will feel special in the Radisson Edwardian Hotel (Radisson Edwardian, 2011). People: People in hotel industry are those employees who represent the company in front of the customers. A hotel must manage the employees to ensure that the approaches and activities are conducive for providing quality service. For developing employee performance Radisson Edwardian had successfully eliminated the upper level of management which instigated the employee empowerment. It provided the freedom to make decision to the lower level management and the front line employees for quick response in any marketing issue (Pantelidis, 2002). Physical Evidence: The physical evidence in a hotel industry is the representation of their services, for example, the brochures, reports and websites. The Radisson Edwardian Hotel has deluxe rooms with good design, furnishing, illumination, arrangement and ornamentation. The appearance of the hotel and the approaches of employees influence customers’ opinion about the service quality of the hotel (Continuum Learning Pte Ltd, n.d.). Process: Process in hotel industry represents methods, systems and mechanisms by which the services are provided. Without good process administration, the service of demand and supply cannot be balanced properly (Scribd, 2011). Planning a Promotional Campaign For promotion of Radisson Edwardian Hotel, it can conduct promotional campaign, for example: Advertising Campaign: Radisson Edwardian Hotel can advertise about its services in the website. Radisson Edwardian already has its website in place and but it can update its appearances and contents so that it can attract potential customers. The main objectives of website marketing are to covey its message about providing superior quality and premium business accommodation. The Radisson Edwardian name will be indexed on the major travelling websites so that travellers around the world can easily find out about Radisson Edwardian Hotel (Palo Alto Software, 2011). Sponsor Events: In order to have better public relation, Radisson Edwardian Hotel can sponsor fashion shows which can entertain the customers as well as increase the brand awareness. Radisson Edwardian Hotel has suitable venue and adequate fund for sponsoring fashion show events and it will be beneficial for Radisson Edwardian Hotel because the United Kingdom is one of the biggest fashion industries in the world. It accounted for almost ?21 billion to the UK’s total economy in the year 2010 (Fox, 2010). Direct Marketing: Direct marketing will be another promotional activity of Radisson Edwardian Hotel. For successful direct marketing, first a list of top commercial companies will be chosen and then the information regarding Radisson Edwardian Hotel will be provided by direct mail to the chosen companies. Financial Information for Promotional Campaign The budgeted finance requirement for promotional campaign for Radisson Edwardian Hotel is assumed as ?52561. The cost includes advertising cost, sponsoring event cost and direct marketing cost. The advertising cost is forecasted as ?625 which includes redesigning of website. The direct marketing cost includes cost of printable vouchers and cost of agency by which the brochures will be delivered which is forecasted as ?5631. The cost of sponsoring events consists of cost of establishing the list of sponsorship companies and cost of organising the fashion show which is forecasted as ?50685. The following table shows the financial information of the promotional campaign planning for Radisson Edwardian Hotel: Promotion campaign Forecasted Cost (?) Web development Redesigning of Website 625 Direct marketing Printable Brochures 1251 5631 Cost of Agency 4380 Sponsoring Events Establishing List of Sponsorship Companies 3754 50685 Sponsoring Fashion Shows 46931 Total Cost of Promotion Campaign 52561 Source: (Palo Alto Software, 2011). Conclusion and Recommendations The recommended marketing strategy for Radisson Edwardian Hotel is to focus on the family customer segment. Besides focusing on premium customers, the focus on family demography can attract many parents belonging to both the segments i.e. who prefer to travel with their children and those who usually prefer to stay at home. Radisson Edwardian Hotel can develop playground for children and casino facility for adult customer segment. It can attract customers who want to spend time with their families and play at casino. Radisson Edwardian Hotel can increase its environment friendly image by reducing the water and energy consumption and using energy efficient devices in their hotels and restaurants. The tourism industry is one of the major industries in the UK and is expected to grow. Thus, proper marketing strategy will help Radisson Edwardian Hotel to perform better and develop its brand awareness in the UK. References BHA, 2010. Hospitality Industry Is UK’S Fifth Largest Employer. Oxford Economics. [Online] Available at: http://www.bha.org.uk/2010/10/12/hospitality-industry-is-uks-fifth-largest-employer-2/ [Accessed June 30, 2011]. Barrell, R. & Et. Al., 2006. UK Economy Forecast. National Institute Economic Review. [Online] Available at: http://www.wers2004.info/research/uploads/030206_171744.pdf [Accessed June 30, 2011]. Continuum Learning Pte Ltd, No Date. 7Ps of Services Marketing. Customer. [Online] Available at: http://www.continuumlearning.com/Customer%20Services_7Ps%20of%20Services.pdf [Accessed June 30, 2011]. Danca, A. C., No Date. SWOT Analysis. University of St. Francis. [Online] Available at: http://www.stfrancis.edu/content/ba/ghkickul/stuwebs/btopics/works/swot.htm [Accessed June 30, 2011]. Fox, I., 2010. British Fashion Industry Now Worth Nearly ?21bn A Year, Report Reveals. Guardian News and Media Limited. [Online] Available at: http://www.guardian.co.uk/lifeandstyle/2010/sep/15/british-fashion-industry-report-business [Accessed June 30, 2011]. Oxford University Press, 2007. Analysing The Micro-Environment. Foundations of Economics - Additional chapter on Business Strategy. [Online] Available at: http://www.oup.com/uk/orc/bin/9780199296378/01student/additional/page_10.htm [Accessed June 30, 2011]. Pantelidis, I. S., 2002. Implementing Empowerment. The case of Radisson Edwardian. Academia. [Online] Available at: http://brighton.academia.edu/IoannisSPantelidis/Papers/90034/Implementing_empowerment._The_case_of_Radisson_Edwardian_a_hotel_chain_that_dared_take_action [Accessed June 30, 2011]. Palo Alto Software, 2011. Marketing Mix. Hotel Marketing Plan. [Online] Available at: http://www.mplans.com/hotel_marketing_plan/marketing_mix_fc.php [Accessed June 30, 2011]. Radisson Edwardian, 2011. Hotel Services. Berkshire Luxury Hotel. [Online] Available at: http://www.radissonedwardian.com/webExtra.do?hotelCode=GBBERKSH&key=webextra.services. [Accessed June 30, 2011]. Radisson Edwardian, 2011. Featured Deals. Hotel Deals. [Online] Available at: http://www.radissonedwardian.com/offers/ [Accessed June 30, 2011]. Radisson Edwardian, 2011. Press Room Home 13 May 2005 Radisson Edwardian Launches New Ad Campaign. Back to Press Room Home. [Online] Available at: http://www.radissonedwardian.com/feature.do?feature=newadcampaign [Accessed June 30, 2011]. Scribd, 2011. The First P: Service Product or Service Package. Doc. [Online] Available at: http://www.scribd.com/doc/37084868/7-P-s-of-Marketing-Mix [Accessed June 30, 2011]. Read More