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City@Hotel Marketing Assignment
Question 1 Introduction to services (799 words)
One of the underlying frameworks discussed in class is the service marketing mix. Discuss how each of the extended service marketing mix elements (process, people, and physical evidence) is implemented and executed by City@Hotels in general and how this could be differentiated for a typical B2C customer in the U.K. market. It is important to discuss how each of these elements contributes to satisfy the organisation’s customer.
Overview
The normal product marketing mix which contains 4P’s (Product, pricing, promotion and placement) is good for explaining the marketing mix for products. However, as services have been coming more and more in the picture it was seen that the 4P’s couldn’t justify the marketing as well as possible (Wilson et al., 2016).
Three elements were needed to actually explain the marketing of services since they could tell you about the experience around and about the service instead of just the product (Bhasin, 2018).
People
One of the essential elements of the service marketing mix is people. This consists of all the people involved in the City@Hotel: product or service, whether this is directly or indirectly.
The reason this P is important, is because without people the normal 4P’s wouldn’t result in a successful marketing mix (Acutt, 2017).
You can clearly see that people is an essential part of City@hotels, since they currently have 3100 employees, and want this to be increased by 7000 new employees by 2021 as part of their development strategy (which is an increase over 100%). When they get new employees, they train them by starting off with induction workshops in which they learn amongst others the core values: innovation, credibility and “you can”!City@Hotels keeps their employees involved and informed in/about the company by communication with them via the staffs’ intranet, the company’s magazine, the company’s website and via all the leaders (Altan, 2019). They also offer a special program for outstanding staff which is suitable to become a GM. Finally, the well-performing employees are rewarded by the Hotel.
City@Hotels also focusses on their partners. They have some exclusive partnerships with companies like specific T.A.s. They value these partnerships much, and as token of gratitude they anually hand out appreciation awards.
Regarding guests, they prioritize the guest satisfaction by offering a good product and service, having good interaction and communication with the guest and develop profitable relations (Altan, 2019). To provide the desired product and service they have developed policies and SOP’s. They work with detailed guest profiles in order to develop relationships and ensure guest satisfaction.
Process
The P of Process can be defined by: the systems and processes which can affect the service or the execution of it (Acutt, 2017). It is important to have a clear understanding on all of the processes in optimize them and eventually minimize the costs (Acutt, 2017).
The assignment states that processes are designed and managed to optimize stakeholder value (Altan, 2019).
One way they have done this is by focussing on obtaining the ISO9001:2000 certification for the BU’s systems, this means that they can consistently provide products and services that meets customer and applicable regulatory requirements (ISO, 2000).
Some of the most recent process improvements relate to (Altan, 2019):
– improved check in processes
This is in order to reduce waiting times and therefore decrease waiting lines
– Recruitment is being centralized
Since this is getting centralized it will be saving recruitment and training costs
-Maximization of sales through process automation
The reservation systems are being automated which enables client information to be shared amongst all relevant stakeholders.
Part of the research to improve processes is outsourced to external companies because, there isn’t enough manning to fill and support an independent R&D department.
Furthermore, in 2006 a Health and Safety committee was created on Board and BU level which is managed by the GM in order to keep both employees and guests safe and healthy (Altan, 2019).
Physical evidence
The physical evidence is the environment in which the service is delivered and where the customer interacts with the firm.It’s also the facilities or communication of the service (Wilson et al., 2016).
Before the guest arrives at the hotel they (most-likely) have already encountered some of the physical evidence. Since they have heard or seen the hotel in one way or another, for instance via the website, brochure or press announcements.
When they enter the hotel, they will encounter all the physical evidence of the concept like the international plug system, XXL king-size bed, rain shower or the customer pads (used to control the rooms’ temperature and lighting) (Alton, 2018).
There are multiple ways in which they show that they care about the environment, like the low energy light bulbs and the use of recycled wash water in all BU’s (City@Hotels, 2018).
UK Market
Since the UK is a different country with a different culture, some of the aspects from City@Hotels may need to change in order to fit in the new society and adapt it to that lifestyle.
Due to the Brexit, the people part will probably undergo some bigger changes, the process part will most likely focus on adapting the processes to the new country and the physical evidence will not require dramatic changes.
| Extended marketing mix | Changes |
| People | The current foresight is that the UK will leave the EU in 2019. However, the date isn’t certain due to multiple reasons (Hunt & Wheeler, 2019). This is important to know since City@Hotel wishes to expand to the UK by 2021 and consequently have to deal with the changes it involves.
Data shows that 12.3% of employees in the UK’s hospitality sector are EU nationals compared to 72.7% who are British nationals. If it gets harder to work in the UK as an EU national the hospitality will face a challenge since these employees cover over 10% of the staff (KPMG, 2017).
Another thing which will probably result in less guests, is the loss of the freedom of movement of persons (Eisenberg, 2019). It will be harder to get in and out of the UK which means people will prefer to choose a destination which is easier to travel to. Some of the key changes which City@Hotel should take into account regarding the different behaviour of their guests are: |
| Processes | Nowadays more and more is done via the internet. When the City@hotel brand wants to expand to the UK it is important that they are well aware of the things which can go wrong. In the previous years there has been an increase in booking frauds around the world, in which people pay for a room which turned out to be a scam from a fraud (ABTA, 2017). Reports have shown that especially in the UK the booking scams are dramatically increasing. Between 2016 and 2017 there has already been an increase of 20% (Mintel Academic, 2017). These numbers show that the booking process should be looked into to prevent bad commerce. |
| Physical Evidence | When looking at the UK market, the physical evidence won’t be that different from other countries. Some of the only things which could be taken into account are things like the famous hot breakfast from England. But the things such as a good bed and free Wi-fi are still main requirements (Mintel Academic, 2015). |
Question 2 Building customer relationships´ & Customer profiling (383 words)
Develop about 3 customer profiles, leaning on a multivariate segmentation approach, that are relevant for a hotel operating in the UK market. Does the value proposition of City@Hotels fit the requirements of these segments – why would these potential customers actually choose City@Hotels? Integrate concepts such as customer profitability segmentation,customer lifetime value and related degrees of customization.
The UK has a relatively good global connectivity since there are well over 100countries which are having direct air connections to them (Visitbritain, 2017). This information combined with the rapidly growing tourism market (as shown in the table) in the UK shows why it is important to focus on international guests (Coffey, 2017).
City@Hotels has segmented its customer by looking at trends. One of the trends they saw, was that a new type of traveller was emerging. A traveller who drinks Champagne, wears jeans and an expensive watch, uses public transport and looks towards costs and ecological issues (Altan, 2019). This group of travellers also think that it’s important to look at the worlds’ ecological issues. Also, since it’s the 21st century they want to stay connected to their friends, family and social media.
This group can be recognized as a wealthy, sustainable and relatively young group of customers (Altan, 2019).
| It could be a smart idea to focus on the American visitors since they are the second to largest group of travellers going to the UK. Since these travellers keep showing a steady growth of visits and spending throughout the years (Visitbritain, 2017). | ||||||||||
| Since Americans tend to show a behaviour which is referred to as “list ticking” which basically mean that they go on a holiday to explore the hotspots and want to see all of them and when they come back they want to relax in the hotel and get ready for the next day (The Telegraph, 2018). | ||||||||||
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| I segmented the market into these variants since these (according to statistics) are the aspects of the guests that go on holiday from the US to the UK the most (Rafat, 2016). | ||||||||||
| Peter To clarify this customer profile, I decided to create a persona of the ideal customer within this target group. The persona is from here on called Peter. |
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| Peter is a 27-year-old male who is born and raised in New York. He has a company which makes him good money (130K annually). This company is green key certified and is also helping out locals. He has a girlfriend which helps and works for his company. When he is traveling for a meeting he likes to stay an extra day to explore s new city. Since time=money, he tries to plan his time efficient in order to visit all the hotspots as soon as possible. Whenever he sees the opportunity to socialize he takes it since he believes that you can always learn from others and a broad network is something he values. Additionally, he is “brand oriented”, which basically means that he looks and grades brands, if he likes something he will stick to it. | ||||||||||
| The reason Peter is an ideal persona is because he: – is within the age range that prefers to go on holiday in the UK – he cares about the environment – has enough income to make it possible and interesting to have as a guest – he is a “list ticker” – he would most-likely enjoy the social spaces – he values brands and is likely to stick to one he approved before |
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| Looking at the lifetime value of Peter, we can see that this has much potential when he approves the brand. He will most-likely choose one of the City@Hotels as his preferred place to stay whenever he is on a business trip, or when he is on holiday with his wife. He also enjoys the fact that he feels part of the new group of international travellers. |
Maria
A 55-year-old lady who lives in a poor populated area in a village. She is married and has children of the age of 20. She enjoys gardening, cycling and painting. This group of people is around 22% of the total population. Her hobbies are: Walking, cycling, puzzling, gardening and she likes pop-classics music. She goes on a long holiday 1.5 times a year, twice on a short holiday. she prefers to stay in a bungalow or villa. The only media she uses are old magazines, local newspapers and local news broadcasts.
When looking at her behaviour regarding holidays, she wants the price to be transparent, things to be clear, clean and easy. She does not like busy areas, illegal things and exuberant shopping. She is also not a fan of too much unnecessary luxury, and she also dislikes extremely colourful and/or busy pictures.
She values family tradition, safety, local and traditional regularity.
The Dutch have the UK at number 7 as their favourite holiday destination. And 5.6% of all visits in the UK comes from NL (Visitbritain, 2017).
The reason this market seemed interesting to segment was because over 80% is making a repeat trip within 10 years and 96% is extremely likely to visit Britain again (Visitbritain, 2017).
Their most popular activities were sightseeing of the hotspots and shopping (Visitbritain, 2017).
Dutch people are also know to enjoy socializing and connecting with others (Hollandexpatcetner, 2008).
These behavioural end psychographic characteristics are the reason they seem an interesting target group.
| Segment Leisure (Lotte) | |
| Age | 19-24 |
| Income | 15000-17,500 |
| Residence | The Netherlands |
| Interests | Exploring, having fun, traveling, sightseeing, partying and connecting with others.
The usually go on holliday twice a year, once with family and once with their partner/friends |
I segmented the market by looking at which traveller is most likely to visit the UK from the NL, then continued looking at statistics of how much money these people make on average. Their interests are a combination of “generalized” interests from that age group and interests which are related to City@Hotels (Minimumloon, 2019) (Visitbritain, 2017).
| Lotte To clarify this customer profile, I decided to create a persona of the ideal customer within this target group. The persona is from here on called Lotte. |
| Lotte is a 22-year-old girl who has been born and raised within the Netherlands. She is writing her thesis which offers her much freedom in which she works most of the time. With this work she makes around 1400 euro a month. In her spare time, she enjoys going to the city centre with her friends. She loves shopping and sitting on the terrace. Whenever there are annual festivities she always likes to go there and make some pictures. She always plans a yearly trip with all her friends to visit a foreign city. During this holiday they enjoy shopping, visiting local places and going to a party. During these parties they usually end up meeting new people. |
| Looking at Lotte her lifetime value we see that she only has a yearly trip with her friends, however, since she is a social person with many connections she will keep the brand in mind and speak about it. Also, whenever she gets children she will be likely to visit the brand again. However, this time she will be in a different segment. |
Customer lifetime value
Customer life time value is important because, the higher the number, the more money you make of a single customer. This is important since it costs a lot of money to attract a new customer opposed to keeping a customer. Also, a repeated customer will be more likely to spread positive word of mouth. If your CLV increases you know that you are making a better impression on your existing customers (and the other way around) (TheDailyEgg, 2018).
| Peter (business) Total Business nights 39,272,000 Total business visits 4,745,000 Total business spending 4,248,000,000 |
| Average business spending per night is 108euros Total business travelers 4,181,000 average nights per visit 9.4 average visits per year 1.134 average spend per visit 895.26 |
| 895.26 Average purchase value 1.134 average purchase frequency 10 years is the average customer lifetime spanAverage customer Value: 1.134*895.26= 1016.02 Average customer lifetime value: 1016.02*10=10160.25 (Horsfield, 2018) |
| Lotte (Leisure) Total leisure nights 4,220,000 Total leisure visits 859,569 Total leisure spending 411,856,128.20 |
| Average leisure spending per night 97.59 Total leisure travellers 1,375,000 Average nights per visit 4.91 Average visits per year 1.6 Average spend per visit 480 |
| 480 Average purchase value 1.6 average purchase frequency 5 years is the average customer lifetime spanAverage customer Value: 1.6*480= 767.83 Average customer lifetime value: 767.83*5= 3839.13 (Visitbritain, 2017) |
Customer profitability
| Platinum | Platinum customers are the upper tier of the customer base and includes people which are spending top dollar or usually buy many goods and/or services. They are heavy users and in most cases, trust your company enough to try new things.
Once the persona called Peter has approved of the brand he will most likely turn into a platinum customer since he values the image and connection he has to the brand. |
| Gold | Gold customers might visit your company as much as platinum users. However, they are more sensitive to prices and are a little more likely to shop at a competitor for a better deal. This tear is usually around the 21th to the 50th percentile in profitability.
The persona called Lotte is likely to be a gold customer since she and her friends would enjoy keeping using the City@Hotels brand wherever they go, but they are sensitive to better deals. |
| Iron | The Iron customers are even more price sensitive than gold customers, and less likely to be loyal. Usually businesses just accept this and accept the modest business they gain from them |
| Lead | The Lead tear could be the primary reason to understand and evaluate the customer pyramid, in addition to the platinum customers. These guests usually cost more money than they generate. They are most-likely to do this by buying heavily discounted products or demanding a lot from your staff and sometimes even continuously returning and/or exchanging products they bought. It could be a good strategy to usher these people elsewhere as they can negate much of the profit. This would probably relate to Maria since this hotel isn’t something she would like which will most-likely result in a bad experience which will cost money to compensate. |
| (Powell, 2016) |
Question 3 Service innovation and design (798 words)
Work out Keller’s brand equity model for City Hotels. Describe each aspect of the model in detail and make sure all descriptions together make up a complete and coherent profile of the brand. Elaborate on and justify how the aspects of service design (interactive experience model and the 4 strategic tools of the physical environment) contribute to building a coherent and consistent brand for the case company.
Keller’s equity model is used to show the process of building a brand and what happens when you go through all the steps in the right order à Brand salience (identity), brand performance & imagery (meaning), consumer feelings & judgements (response) and finally brand resonance (relationships) (EURIB, 2009).The concept behind the brand equity model is to shape how customers think and feel about you and your product.
Brand Salience
The standard basis of your brand is trying to figure out and communicating what you are all about. Besides making sure that people are aware of your brand, you also need to be sure that they are getting the right message as well.
At this first level of the pyramid it is important to deliver the message what kind of brand you are and what you are trying to communicate.
This step is mostly about asking the question “who are you?” (Mindtools team, 2012). City@Hotels is striving to be unique with their core values which are: Innovation, credibility, technology and “you can!”. They are showing it with the features and facilities they offer. However, this is not experienced in their pricing since they want to offer affordable luxury to their customers (Altan, 2019).
Brand performance and Brand imagery
These two terms combined should give an answer to the question “what are you?” (Mindtools team, 2012).
Performance:
City@hotels typical guests want: a shower and a good bed since they spend most of their time exploring the city or within the social spaces of the hotel.
City@Hotels are meeting these needs by offering trendy rooms: with clean facilities, rainshower, XXL-kingsize bed and several lighting options. Throughout the rest of the hotel they offer the guests dining options free Wi-fi and social spaces in which they can socialize with others (Altan, 2018).
Imagery:
After meeting the tangible needs of the guests, it is also important to focus on the intangible needs. They do this by encouraging the social spaces to socialize with others. Next to the social spaces they also show a relaxing environment throughout the hotel. They should be communicating their trendy image to the outside world via things like social media.
Judgements and Feelings
This step is all about how the customers respond and think about the Brand City@Hotels.Each customer has unique needs and wants, upon these they will make judgements about this brand (Mindtools team, 2012).
Judgements
Quality: The judgements based upon the actual and perceived quality mostly involves the quality of the rooms, sanitary facilities, F&B and the quality of the service encounters. The quality will be most-likely be perceived as good since the hotel offers luxury which would usually be above their price range. Also, the ability of City@Hotels to deliver constant quality across all of their properties is something which gives a sign to the outside world about their standards of quality (Altan, 2019).
Superiority: by looking how guests judge you compared to the competition shows you where you are in the market. The competition in the UK market consists of: Comfort Inns, Ibis, Holiday Inn and Bastion (Altan, 2019).
Feelings
Since they aim for guests who like to explore the city and relax in the hotel, City@Hotels shows a “warm at-home-feeling which is in for socializing and fun”. They express the warm feeling with their comfortable and relaxed atmosphere which the guests feel throughout the entire hotel. The fact that it is a new city which is attractive to younger people makes it exciting and fun for people to explore the city. They can get to know new people in the social spaces, which again, creates a warm feeling of belonging.
Brand Resonance
When all the previous dimensions are aligned and clearly expressed by the company, and (in a good way) received/perceived by the customers the company becomes a “brand advocate” (Bhasin, 2018). However, this level means there is a huge social and psychological connection between the guest and the brand. This is why there are barely any companies which are successful in this part of the pyramid (Bhasin, 2018).
The way City@Hotels is working towards this goal is by giving their guests a feeling that they belong to a new group of international travellers. When they start to have a feeling of belonging they try to enhance this with their loyalty program called “City@Citizen.
Next to ensuring that they are having a strong feeling of belonging, they also ensure that they are giving personal recognition at the business unit level.
Since this step is important for showing how connected customers feel to the brand the encourage people to talk about them online. They do this via the service oriented social media presence they have created. This encourages people to talk about the brand, their stay and their expierences (Bhasin, 2018) (Altan, 2019).
Question 4 Link to E-marketing & website design (826 words)
use the ‘E-marketing mix’ (Kalyanam & McIntyre, 2002) to describe and explain how the company website should function as information source to attract more B2B clients through direct channels. Identify the type of business that is attractive to target for City@Hotels and develop arguments to support the choice of specific e-marketing elements to achieve the above mentioned aim. Explain how these website elements address customer expectations using the variables of the Customer Gap in the ServQual model (Parasuraman, Zeithaml & Berry, 1988)
Target market
During their start-up, City@Hotels has observed a new kind of traveller. “Today’s (business or leisure) traveller often travels in jeans and t-shirt, tends to wear an expensive watch, drinks Champagne or Cava and takes public transport as he considers driving in cities with his own car (or a company car) is not efficient in terms of time, cost or because of ecological issues. This type of traveller want a good bed and shower. Next to that, they spend most of their time in the city or in the social spaces in the hotel (Altan, 2019)”. They chose this as their target market and focus on these guests.
E-Marketing mix
The standard marketing mix is mostly developed for products which are purchased in shops. The rise of the information age with the internet has revolutionized the way we sell our products and services. Many consumers use the internet to do research and purchase products online, therefore, firms should create fitting strategies to attract and retain customers. The e-marketing mix is a refreshed marketing mix which should get you ready for the online market place (Tailor & Tailor, 2019).
B2B client
When looking at the B2B aspect of the hotel, they want to focus on “the new kind of traveller”.
The company called “Absolute digital media” consists of young entrepreneurs who are specialized in E-Marketing.
The company has won multiple awards like “UK southern business awards, European search awards and biddable UK awards”. They don’t wear suits but prefer jeans and a blouse. They are interested in social media and exploring new places. On a regular basis people from big companies travel to them to have consults and/or to help developing new ideas/strategies. They also have regular big meetings, however their office isn’t that big, this is why they are always on the look for a good place to talk and negotiate.
Absolute Digital Media seems like a perfect fit as a target market for City@Hotels. They can offer the guests that are visiting them a place to stay, but also offer their employees who go on a business trip a place in other countries where City@Hotels is situated. Since there are many people working together with absolute digital media,they will somehow have similar needs and interests like the company itself. This means that they will most-likely also be a great fit.
When they are targeted their “trendy” brand will start to feel associated with the City@Hotels brand and would want to keep working together. This can result in a cooperation regarding our specialties. We can provide accommodations for a somehow more interesting price, and they can help us to keep our electronic environment up to date (win-win).
The focus from the E-marketing mix should be on the e-place. Their website is the place in which people are recommended to go, therefore,this should show who they are, and why they are interesting for the “new traveller”. This e-place should also offer a good customer data base for guests who have joined the loyalty program in order to keep it transparent (Tailor & Tailor, 2019).
Customer Journey
When the Absolute Digital Media is targeted they will have heard about it and promote it internally since they have a close team.
The customer journey will be explained with the following story which is clarified by the table (Nijhuis, 2016).
The business will become aware of the brand via a direct marketing towards them and take it into consideration.
Since our online environment shows that we are attractive to “the new traveller” they will feel some sort of association. This will have them try out our brand and experience what it’s like. We will adapt them into our loyalty program in to retain them as a customer. This will most-likely spread awareness around all their offices. When the connection is made they are going to spread positive word of mouth and recommend us to their incoming customers and we will broaden our network via them.
GAP model
When looking at the E-marketing mix the 1st gap seems like the gap which could lead to the biggest gap. This gap is about the service which is expected by the guests and about managements’ perceptions of consumers expectations (as can also be seen in the table) (Verint, 2013).
The reason this gap seems to be the biggest potential hazard is because of the following:
people nowadays make snap judgments. It only takes 1/10th of a second to form an opinion about a person or website. And it takes only a small 0.05 seconds to decide if you want to stay on a website or leave it (Laja, 2019).
Since this (probably) is the first contact moment in the customer journey, it is important that we send out the right first impression. It is important that we don’t send out the wrong message to the guests since this creates confusion. If this is done right the gap probably won’t occur.
Conclusion (127 words)
During this report we have had a look into the extended marketing mix, and how this would be different if City@Hotels would start operating in the UK. We then created some personas and had a look at their behaviours and profiles. We saw that some of them were more profitable than others. The brand equity model showed us how the brand and image of City@Hotels was built. We also had a look on how others see and experience our brand. In the final part of the report the E-Marketing mix was discussed, and it showed the B2B customer which would be interesting to get targeted by City@Hotels. We ended up with analysing the E-Marketing mix and how this could prevent gaps from occurring in the GAP model.
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