The Luxurt Colletion Hongta Hotel Shanghai Marketing Strategy - Case Study Example

Marketing Plan The case of Luxury Collection Hongta Hotel Executive summary Marketing is arguably the most important function of business in today’s contemporary world. The primary reason why marketing id deemed a critical function is because competing is getting stiffer each day in all industries. The hospitality industry being no exemption, the hotels have to come up with comprehensive marketing plans which can help the respective organizations top the market by grabbing the biggest market share. Luxury world class hotels have made the decision to commit extra funds to marketing as a way of gaining market share. Apparently, the organizations in the service industry find it a difficult affair to market their products especially where such products are not tangible. Differentiating a service has proven to be one of the most complicated affairs in the modern business world. With many luxury hotels resorting to offering a variety of products such as conference halls and wedding arenas, the competition gets stiffer by day. This paper sleeks to analyze the Luxury Collection Hongta Hotel, Shanghai with the primary aim of coming up with a comprehensive marketing plan. The paper will analyze the current position of the hotel, pay attention to where the hotel wants to be and design a number of strategies that can help the organization beat the status quo so as to gain a substantial share of the market. Company overview Luxury Collection Hongta Hotel is a collection of world class luxury hotels. The organization has been in the hospitality for a considerably long time. The organization has been one of the giant organizations in the hospitality industry since it offers unrivaled quality when it comes to service delivery. Arguably, the organization owns an enviable market share of approximately 12 percent in Shanghai, China. By 12 percent, the analysis is conducted on the market consisting of those clients that can afford to go to such hotels. Worth mentioning is the actuality that the organization’s services are considerably costly considering that the hotel is a five star organization offering indispensable quality always. The organization has a dedicated staff on which the management emphasizes a number of core values. The core values define the ethical standards of the organization. The company has subsidiaries in the major cities if the world. It is important to note that the organization is currently rivaled by such established organizations as the Hilton Hotels. Hongta Hotel, shanghai offers a wide range of services and facilities. The primary facilities offered by the hotel are the ordinary facilities that people expect from ordinary hotels, plus other enhanced services. For instance, the organization, besides offering dining and wining services, has such facilities as holding wedding ceremonies, conferencing services and ball room. The premise is equipped with cuisine and other fitness facilities such as a gymnasium. Essentially, the organization concerns itself with such things as recreation through such facilities as swimming pools. It is important to note that the organization offers customized services for its clients. This means that Hongta Hotel observes cultural diversity as it is capable for serving people from diverse cultures. Worth mentioning therefore is the reality that the organization is a world class organization. Vision To fill the earth with the light and warmth of hospitality Mission statement To be the preeminent global hospitality company – the first choice of guests, team members, and owners alike. Core values Hospitality, Leadership, Teamwork, Ownership Situational analysis Situational analysis refers to the evaluation of the environment in which the organization operates. Carrying out a situational analysis calls for proper and keen scanning of the environment with the aim of identifying the potential constrains to the success of the company’s endeavors (Barrows & Powers 2009). It is important to mention that there is a big difference between situational analysis and the common SWOT analysis. Situational analysis does not concern itself with such things as opportunities and threats, but rather identifies the factors that are likely to bear such opportunities and threats. Apparently, there are many dimensions of situational analysis. The factors that describe the situation within which an organization operates include political factors, environment, socio-cultural factors, technology, the economic factors as well as the legal framework. For the purposes of this case, the political environment is considerably stable, with the socialist government making all the policies relating to taxation, business and industry. The politics of China, much like the politics of any other country, do affect the way in which business is carried out. Worth mentioning however, is the reality that despite the political factors being bureaucratic, they do not affect the hospitality industry as much (BöHm 2009). However, the organization has something to thank the government for – creating a good environment for tourists. Tourists are the main guests at the Hongta Hotel, shanghai. The physical environment is quite friendly, which the highly varied climatic conditions of China being more of an opportunity than a threat. The Chinese environment, especially the varied terrain, climate and many islands, is a big tourist attraction. This creates yet another big client base for the organization. Socio-cultural factors in the region are in favor of the hospitality industry. China is a culturally diverse country. This is an opportunity for many businesses and this does not make it different for the Hongta Hotel. The cultural diversity of China is an opportunity in the sense that it offers a big client base and creates room for creativity. Creativity is brought about by the fact that the organization can borrow heavily from the various cultures within the borders of china. Additionally, the organization has employees from various cultures. This increases the variety of ideas in the decision making process which typically involves all levels of management. Apparently, China is synonymous with technology. The level of technology in china is high especially in the telecommunication industry (Sadler & Craig 2003). This gives the organization a chance to market its products and services through the internet, in what is referred to as e-marketing. Technology as well enables the organization communicates with its clients on such things as online bookings. The economy of China is considerably stable. This makes the organization’s business remain stable all through the year. The primary reason for this is that when an economy is stable, the rate of spending by the citizenry does not fluctuate at all. Similarly, foreign clients will not be skeptical about coming into the country (Jeffs 2008). Worth mentioning is the fact that instability in the economy is brought about by such inconsistencies as inflation. The economic situation in China is not characterized by inflation. The legal environment is friendly as it provides for the protection of businesses. Similarly, the legal framework does not illegalize any of the dealings that Hongta Hotel engages in. as such, the legal framework of the country is assumed to be a friendly one. Competitor analysis The organization faces competition from other well established hotels operating in the international scene. The five star hotels that operate globally have been around for a considerably long time. Such competitors have established their names in the hospitality industry. Even so, the biggest and most note worthy competitor is the Hilton group of hotels. Hilton is a well established organization having the largest market share on the global scene. The organization is more established than Hongta Hotel and has a larger market share in most of the world’s key cities. The organization has been identified as the biggest threat to Hongta Hotel. Worth noting however is the actuality that according to market research, the clients of these organizations have developed a sense of loyalty in such a way that they may not be willing to change their preferences anytime soon. What remains for the competing firms to do is to rush for the new customers who, according to research, are considerably many in the market. SWOT analysis The organization has quite a number of strengths. On the contrary, it has a few weaknesses. The weaknesses are in such a way that they can be overcome depending on the policy and approach the management adopts. It is of primary importance to note that the organization has quite a number of opportunities offered by the environment. This same environment poses a number of threats that the organization has to deal with so as to achieve its mission. Strengths The biggest identifiable strengths of the organization revolve around the fact that its internal environment and culture is strong and offers uniqueness. Apparently, the organization is the most diversified in the industry. The organization’s biggest strength is diversification. This comes in the sense that the organization offers services of different kinds. These include the wedding services, conferencing services, health and fitness, nutrition and catering. The diversity widens its client’s base in such a way that every product can be associated with a certain class of clients (Reid & Bojanic 2010). Noteworthy as well is the actuality that the organization uses advanced technology in taking its services a notch higher. What this refers to is the reality that the organization uses such things as ecommerce and e-marketing. These have made the organization get new clients from other countries. The location of the premises, right at the heart of shanghai is yet another strength. The center of shanghai is considerably strategic since it is associated with many activities and big populations that offer many clients. Weaknesses The major weakness of the organization is the fact that it offers its services and products at a considerably high cost. The average consumer cannot effortlessly enjoy the services of Hongta Hotel. This has created a belief in the people that the hotel is only for the rich people. This has narrowed down its clients. Opportunities There are quite a number of opportunities availed by the environment for the organization. For example, china is the most populous country in the world (Burrow & Bosiljevac 2012). The population of shanghai alone is big enough. A big population offers a large potential market. This means that in the case of Hongta Hotel, there is a considerably big potential market that has yet to be exploited. The organization can take advantage of this opportunity by investing more in marketing and sales promotion. Essentially, therefore, the organization is structured in such a manner that it can rise above the competitors to grab the customers that are not yet loyal to either competing firm. Current customer analysis The current customer analysis reveals that the organization has customers from all walks of life. even so, the primary customer class is the tourist class. The tourists form the main client base of the organization. The clients of Hongta Hotel are basically people from the affluent sections of society. This is majorly because the prices of the organization are beyond the reach of the average spender. In answering the basic questions of customer analysis, it is important to understand what they entail. The first question is: who are the customers currently? The second question asks: what market segment defines the organization’s customers? Three: what are the characteristics of such client? Four: are they new or old customers? In answering such questions, it is notable that the current customers are the people from the affluent class. They segment therefore is described as such. The primary characteristics of the customers are that they are regular customers, who are rich and come from all cultures. Most of the clients are international clients. Such big organizations as Hongta Hotel have loyal customers as they always endeavor to create a rapport with such clients through offers and discounts. The organization is not satisfied with the number of loyal clients and endeavors to get more loyal clients on board. Strategic formation Likely issues The issues that are likely to affect the organization are the diminishing of the market share. When the market share shrinks, it is an implication that the level of competition is going up. Apparently, the hospitality industry in China is one that is easy to penetrate. It is likely that in the next five years, the organization will be facing serious competition from other established organizations as well as new entrants. The level of competition will be high as the level of technology will have gone higher giving the competitors the opportunity to enhance their competitive advantage. The situation will however not be bad for if the management elects to embrace the changes in technology and other aspects of marketing (Pride & Ferrell 2012). Strategies Among the primary strategies of dealing with anticipated issues is keeping abreast with the times while accepting and matching up to the change. Apparently, the change within the business industry is inevitable as people have to update themselves. This can be explained by a simple illustration. An organization that was the market leader in the 80s cannot manage even the slightest section of the current market if the management of such an organization did not actively manage and welcome change. Assuming that the organization maintained its status quo, it cannot achieve success in the market (Hisrich 2000). Therefore, one of the strategies that Hongta Hotel should endeavor to use is change management. The second strategy that the organization can employ is intensive marketing. Intensive marketing efforts can help an organization beat the status quo and manage to acquire a bigger share of the market. Hongta Hotel will have to invest in intensive marketing as a way of getting new customers while making the old ones more loyal. This will be made possible through employing various marketing strategies. This may mean that since the organization has international clients, it will have to intensively advertise through the internet, especially through social sites. Social sites such as twitter and face book are very potent platforms for the marketing of products. The organization should endeavor to use email marketing as well. This will particularly work on the loyalty of customers as the emails will be acquired from the contacts list. The organization can take advantage of the fact that there are those customers that cannot walk into their premises as well as those of the competitors because of high prices. This is an opportunity that the organization should exploit through having affordable products. This will create a new segment of customers and popularize the organization. The lowering of prices is a marketing strategy that seeks to get new clients that will grow to be loyal to the organization (Pahl & Richter 2009). Once loyalty has been acquired, the prices can be adjusted according to the market circumstances. More importantly, the organization should seek a bigger market share. After establishing the market share, price adjustments will be employed after loyalty has been secured. Dealing with threats The primary threats that the organization faces is the threat of competition. The only way through which the organization can deal with this threat is not aiming at the existing customers, but seeking to gain favor with new clients. This will be particularly important in the sense that it will have widened its clientele while enlarging its share of the market. Such strategies as skimming will enable Hongta Hotel penetrate new markets with a lot of ease (Sandhusen 2000). It will enable the organization get an advantage over its competitors. Worth noting is the reality that market penetration is critically important. Conclusion and recommendations In conclusion, it is clear to see that the organization is a considerably big player in the industry. Being such a big player, competition is inevitable. It is therefore recommended that the organization invests in new clients. This calls for better and stronger marketing strategies. Such strategies will usually be associated with the internet and other forms of digital marketing. It is noteworthy then SWOT analysis is particularly important as an aspect of situational analysis. It is recommended that the organization uses its strengths and opportunities to overcome the threats and weaknesses. This is a goal that calls for comprehensive approaches. It is important to mention that in recommending intensive marketing there hare weaknesses that will have to be ironed out completely. Reference list Barrows, C. W., & Powers, T. F. (2009). Introduction To The Hospitality Industry. Hoboken, N.J., John Wiley & Sons. BöHm, A. (2009). The Swot Analysis. MüNchen, Grin Verlag. Burrow, J., & Bosiljevac, J. (2012). Marketing. Mason, Ohio, South-Western Cengage Learning. Hisrich, R. D. (2000). Marketing. Hauppauge, N.Y., Barron's. Jeffs, C. (2008). Strategic Management. Los Angeles, Sage. Pahl, N., & Richter, A. (2009). Swot Analysis - Idea, Methodology And A Practical Approach. MüNchen, Grin Verlag Gmbh. Pride, W. M., & Ferrell, O. C. (2012). Marketing. Mason, Ohio, South-Western Ce Reid, R. D., & Bojanic, D. C. (2010). Hospitality Marketing Management. Hoboken, N.J., John Wiley & Sons. Ngage Learning. Sadler, P., & Craig, J. C. (2003). Strategic Management. London, Kogan Page. Sandhusen, R. (2000). Marketing. Hauppauge, N.Y., Barron's. Read More