Carlton Hotel - Positioning Strategies, and Customer Service - Case Study Example

Introduction Every organisation is seeking new ways to continuously acquire, retain as well as increase business. This is due to the rising cost of losing customers. Organisations that provide services such as hotels require putting in place strategies for competitive marketing in order to focus on improving their competitiveness and thus retain and increase customers. Once they create a demand, the hotels needs to manage this demand and its capacity to deliver. Service is a very important factor for retaining customers and its role is becoming more critical with time. This is because the hotels with the ability attract, satisfy as well as retain customers possesses greater chances of surviving as compared to others. Thus, a successful retention of customers provides hotels with an opportunity to build relationships with its clients (Hoffman, Kelley, & Chung 2003, 334). According to Hill & Jones (2002, 123), for service organisations to acquire as well as retain customers, it is important to deploy marketing strategies in order to improve the organisation’s ability to compete with other organisations to gain a competitive advantage and thus have the greatest number of customers. According to Amoako et al (2012, 18) satisfaction of customers is considered as a business philosophy that creates the value of customers, anticipate as well as manage their expectations while also demonstrating the responsibility and ability to satisfy the customers’ needs. Quality service and satisfaction of the customer are crucial factors for success of any type of business. Thus, the key to the achievement of a sustainable advantage is deliverance of a service of high quality that leads to customer satisfaction. Gandolfo, and Guzzo (2010, 3) adds that businesses also need to put into consideration that gaining new customers requires higher costs than retaining the existing ones. Thus there is a need for concentrating on customer retention by implementation of effective policies for satisfaction and loyalty of customers. However, with the variation of social, cultural, political and economical factors, there is also a need to consider acquiring new customers. Carlton Hotel is a 4-star facility established in 1988 in a shopping, financial and convention district in Singapore. It is a business-friendly Hotel in Singapore in the business district and close to city Hall and Singapore parliament. The Hotel also captures a buzz of local culture with its 24 hours per day service. Its features include well equipped guest rooms and luxurious amenities such as a business Lounge, all day dining restaurant a panoramic city view at the club lounge, sky lounge as well as modern corporate meeting rooms. Recreational facilities include health club, outdoor pool, sauna, as well as fitness facile. Recreation amenities include beauty services, treatment and massage rooms and hair salon. It has a business centre, secretarial services, small meeting rooms and a limo town service. It has an event space which includes meeting or conference rooms, banquet facilities and a ballroom. It offers a roundtrip air shuttle on request. It also offers business services, tour assistance and wedding services (Carlton Hotel Singapore 2012). Positioning strategies Positioning is a very crucial strategy in which an organisation needs to utilise in order to create as well as sustain a competitive advantage. The moment a service organisation identifies its market target, it will move to the next step that involves positioning its service offering. An organisation requires identifying the grounds on which it wants to compete and then it should position itself in a unique and clear way (Petzer, Steyn & Mostert 2008, 4-5). Positioning involves what an organisation is standing for in the mind of the market and an effective positioning strategy will answer some questions such as: who are you serving, what you are doing for them, and how you are different from other choices. Customers usually from their opinion early in regard to your business and hold such opinions for a long time. Thus, clear establishment of your organisation’s best position in early development of your category usually pays. This is because the first impressions usually last more. It is also not the first organisation with a product that becomes a marker leader, but it is that organisation that customers perceive to be the market leader (Hoffman, Kelley, & Chung 2003). Carlton positioning strategy mainly targets business people since it is at the heart of shopping, financial business district in Singapore. With an increasing growth in economy, many business people get into the country through this area which serves as the best place to tap such people. Facilities such as modern corporate meeting or conference rooms, business Lounge, 24-hour service guest rooms as well as other recreational facilities serves the purpose better. In addition, the there is also a high volume of tourist visiting the Singapore who find a Carlton a good place due to luxurious amenities as well as a variety of luxurious facilities (Carlton Hotel Singapore 2012). Belch & Belch (2004, 52-54) identified different positioning criteria in which service offerings can be positioned. These include specific product, benefits or needs, usage occasions, user categories, positioning by competitor, product class, cultural or natural symbols, and price and quality. Specific product involves promotion of the fact to the business travellers such as location at the heart of financial centre. Benefits or needs involve a situation where a hotel focuses on specific services that are offered in the business services such as internet access. Usage occasions consist of positioning according to occasions such as hosting conferences. User categories entail positioning in regard to meeting of the needs such as business customers instead of individual customers. Positioning by competitor involves having better facilities and services that other hotel in a specific area. Positioning by class for instance, involves positioning itself as leisure rather than conference. Based on culture or national symbols, a hotel may tie itself in regard to cultural symbol in a particular region. In terms of price and quality, a hotel may position its brand as a premium hotel at the high end. Every product must be appealing to a specific subgroup of customers and given that such groups are the different they are reached in different media and different messages. A sub group is usually referred to as the market segment which involves customers who share some common set of characteristics. Such groups do not have an equal value which means that an organisation will have to prioritise its markets such as having primary, secondary and tertiary markets. The most important subgroup to put into consideration is the primary target market because the customers in this market are most likely to use the products or a service an organisation is offering. Such market includes the customers that an organisation cannot run without them. Various ways of segmenting market target in an organisation include geography, demographics, and lifestyles among others. The most effective ways of segmenting market depends on which market segment that the organisation owns and which its competitors own, the segments that responds atrongly to certain messages and those reachable by the media (Kotler, Brown, Adams, and Armstrong 2004, 365). The hotels and motels industry in Singapore is mainly segmented in regard to the origin of the revenues that is business consumers and leisure consumers. The leisure segment is the most lucrative with about 80% of the overall value of the industry. Segmentation profile On the grounds of geographic and demographics in Singapore, the potential spending by customers is based on the location of Singapore which is advantageous and the average income of people. There is a significant investment in sales activities as well as marketing which attracts a lot of people to do business. The optimum location of Singapore is in the middle of Southeast Asia. This makes it a county with many points of accessing. In addition, it attracts an extremely large number of tourists from every part of the world (Janelle and Fogatory 2010, 58-60). Business people are the main targets of Carlton both foreign as well as ordinary citizens with higher incomes per year. Such people like to have a luxury and attentive care to deviate from their busy days of doing business. With the present rapid growth in Singapore as well as Asia, there is an increase in the growth of the number of potential customers in this segment. For instance, members of private golf courses form an ideal segment for luxury hotels. Such people have the ability to spend as well as to invest (Belch & Belch 2004) Based on psychographics, although there are many hotels in Singapore that provides excellent facilities and good service, the customer satisfaction level is still not high enough. The current score in hotel industry show that customer satisfaction is around 71%. This indicates there is still more room for improvement and thus, providing more opportunities especially for increasing number of people into the country for business purposes. This calls for new and efficient services for satisfaction of customers’ needs (Janelle and Fogatory 2010). On the grounds of benefits, Singapore current recovery of the economy as well as a stable and strong economy will create more investors in various sectors from different regions. In addition, there is an increase in the levels of standard of living in Singapore. Such high standard of living also increases the demand for recreation facilities such as hotels (Belch & Belch 2004) Influences of consumers’ buying behaviour According to Nugroho, and Wihandoyo (2009, 217), understanding of the perceived value of the customers is very important in winning over a service. This is because an organisation must first understand the factors that the customers see as important by knowing how they perceive and think about variables. The customer’s buying behaviour in Singapore Hotel industry is influenced by economic circumstances, lifestyle, occupation and personality. Based on occupation, people who venture into business in Singapore either from within or foreigners want to relax in places with best value, convenient, and best atmosphere in order to relieve their long day stress in business and also prepare for another day. They also require convenient places which allow them to meet with their clients to in regard to their businesses. With increasing standard of living in Singapore, those with higher earnings will like to be in luxurious places to spend time and converse with their business partners. Lifestyle and personality also have a major influence on the perception of customers on their buying behaviour. For instance, those with higher standards of living will like to stay in high class hotel with little disturbances. Such people include successful and famous investors from within and outside Singapore as well as other celebrities such as golfers. Positioning strategies used in local hotels According to Sun (2011, 270-272), there has been an increased growth of hotel industry in Singapore which has been driven by the tourism industry. Due to such factors, there is an intensive competition from the global partners who are changing the offer from the hotel to being not just a place for living but also a place for the satisfaction of the customers from different regions. Based on such factors, the positioning strategies used by the local hotels are based on luxury travelling. With increased growth in this industry, local hotels are also focused on quality and pricing in order to maintain a competitive advantage. This has led to a mini price war as the industry players slash prices. In addition, the local hotels are focused on customer loyalty by creatively packaging their rooms rates with some benefits and they have gone a further step of rewarding past customer loyalty. Based on social cultural events, local hotels are also focused on the Singapore society by providing premier locations for holding events. Such events include weddings where the hotels consider auspicious years for Chinese to wed (Sun 2011). The variables that influence the buying decision of the target market in Carlton hotel include location, convenience, quality, price, security, facilities and brand. Because the target customer is the business people, the location of the Hotel is at the heart of financial and shopping city which allows the business people execute theory business. The hotel also is easy to reach at the hotel immediately one alights from the plane in the city from a long flight. Thus, the place becomes convenient for business people due to better connectivity. The hotel Carlton hotel also offers the best facilities for doing business in addition to normal lodging facilities. These include small and large conference rooms and business lounge among others. Given that security is an important factor all over the world, Carlton Hotel provides a secure place for every guest. Carlton Hotel is branded as s business-friendly hotel which makes the target customers feel comfortable on the issue (Morosan, and Jeong 2008, 284-290). Position mapping 3 Raffles 2 Carlton Perceived price 1 Gallery Perceived quality Carlton hotel provide high quality services at better prices in regard to the business people and professionals. Raffles hotel quality services are average but its charge rates are a bit higher to Sun (2011). Gallery hotel provides average quality at lower prices which may not bring the best quality of services for business class. Customer service strategies Gandolfo, and Guzzo (2010, 3) found out that the main challenge in hotel industry management is provision and sustaining of customer satisfaction. Customers’ quality service requirement in the hotel industry is evidently increasing. The relationship with the guest in this industry is considered a strategic organisational asset while the satisfaction of customer becomes the initial point to define the objectives of the organisation. In this industry, positive relationships increase the return rate and create higher customer commitment. Customer services include front desk services, reliable services, security, and speed in service delivery, customer retention and sensitivity to the customers’ needs. Customer services are aimed at making at making the customer comfortable, making the customers feel better by creating a memorable interaction, and stimulate the retention of the customers. Apart from putting emphasis on check in and out and cleanliness as the foundations for satisfaction of the guest, Carlton Hotel has gone a step further and specialised on exclusive aspect of the hotel experience. This involves providing services that make guests feel that they have friends nearby. To improve their customer care services, the hotel assumes that every guest is new and requires adequate guidance. Such services include provision of information regarding the area, provision of transportation alternatives, directions, offering wake-up calls, internet services and other different countless ways. This is aimed at ensuring that the guests are convinced that the management understands their needs, appreciates their business and constantly striving for provision solutions to any kind of problem within the hotel (Carlton Hotel Singapore 2012). There is a great different between the customers services offered between manufactures of tangible products and service organisations. Jiang (2009, 188) states that the core difference between the two is the tangibility but in terms of customer service manufacturing of tangible products is characterised by low customer contact. These firms usually provide customer services only if they are requested and they produce goods without forecasting the demand of the customer or customer order. Based on the running of the business, manufacturing of tangible goods is product oriented. On the other hand, services in service industry are greatly focused on higher customer contact such that the provision of services is usually more people oriented. They rely on the satisfaction of customers for continued revenue and success of the business such that they aim at focusing on services that exceed the expectation of the customers. Customer services require high customer services in a way that the employees will interact with the guests in a friendly manner. Most studies have focused on creating value for the business by adding profit through performance. Adding value for the client is also a profitable strategy for the business. Such a strategy will lead to a win-win relationship in the business because a long-term relationship will ensure customer retention, loyalty and repeat business. It is worth noting that in the service sector, quantification of the value or worth of a certain service is difficult because services are intangible products. The perception of the value of these services is referred to as perceived value because the recognition of value rests with the customer that has attempts of quantification of what the service is worth. In the services sector, establishing of long-term, meaningful, and mutually beneficial relationships in the business adds value. Thus, through perceived value, a customer a customer is able to choose a specific service over the other, an organisation gains a competitive advantage by maintain customer relationships that are genuine in long-term, and a personal touch which have been created through emotional attributes for instance, empathy, caring and trust adds value from the perspective of the customer. Thus, the management requires having a deep knowledge of the preferences, behaviour, and needs of the customers and being aware of the means of delivering services in order to create value for the customers as well as stimulating their loyalty and retention (Minghetti, 2003, 142-150). Long lasting relationships between the management of Carlton Hotel and the customers is beneficial to the hotel as well as the customer. With staff in the hotel are friendly, helpful and cheerful and works at their best to ensure that every customer feels at home. Such services lead to development of trust and empathy. These factors result to adding of value to both the hotel and to the customers. Base on such a situation the win-win environment is created which leads to benefits to both the hotel and customers. Retention of customers shows the customer loyalty or a form of relationship between the client and the organisation (Eggert, and Ulaga 2002). The customer service in Carlton Hotel has various strengths. The management is focused on trying to convince customers that they really understand their needs as they accompany every guest in a friendly and polite manner. In addition, the customer service is also designed in a way that it will create a win-win situation between the hotel and the customers. The foundations of customer services such as clean room, check in and out are well complimented as well as a good management ready to provide support within the hotel through addressing various problems such as change of rooms. This is depicted through financial benefits as a result of retention and loyalty of the customers. Gandolfo, and Guzzo (2010, 4-8) essential elements for implementation of a customer service program include commitment and communication, collection of the right information, making customer satisfaction a normal routine, taking action, and accountability. Commitment involves not just provision of best possible customer experience but genuine commitment towards making the loyalty part of the culture of the organisation. The collection of the right information involves knowing honestly how the customers feel and ensuring that you always talk to the customers. Taking action means providing feedback to the consumers in order to make the implementation meaningful and successful. Accountability means being fully engaged in the management of customer loyalty program and being held responsible for achievement of the organisational performance objective. Conclusion Every organisation is seeking new ways to continuously acquire, retain as well as increase business. Carlton Hotel is a four star hotel in Singapore whose positioning strategy is mainly is based on economy and location. It targets the business people since it is at the heart of shopping, financial business district in Singapore. With factors such as location, convenience, quality, price, security, facilities and brand influencing the buying decision of the customers, its customer service strategy has led to improvement in their competitiveness and thus retaining and increasing customers. Based on the study on Carlton Hotel, it is evident that service marketing is very crucial for service organisations. References Amoako, G. K, Arthur, E, Bandoh, C., and Katah, R. K. 2012. “The impact of effective customer relationship management (CRM) on repurchase: A case study of Golden Tulip hotel in Ghana” Africa Journal of Marketing Management, 4(1): 17-29. 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