Marketing strategies of 5 star hotels of India
Marketing strategies are laid to achieve long term objectives of the company (Johnson n.d.) and this applies to 5 star hotels too. General goals of most hotels are to expand their presence in more regions, increase customers, improve the quality of their services and earn more profits. Goals can be specific as well; for instance, the long term goal of the Oberoi Hotels is to tap the international market of short haul destinations like China, Singapore and the Middle East (East India Ho 2015). As for the ITC hotel group, their long term objective is to establish a range of “green” luxury hotels, using an eco-friendly approach (ITC 2014).
Strategy to differentiate from other competing hotels
Differentiation refers to distinguishing a hotel from its competitors and attracting customers to choose them over others’ (Hawks n.d.). Hotels differentiate their services from others in order to attain a greater share in the market. Marriott differentiates itself from its competitors by focusing on standardization of its services, i.e. providing uniform facilities and services for all customers (Eisen 2014). International customers often need more consistency in hotel services when they travel across the world. Standardization not only simplifies work but also helps attain economies of scale by cutting costs (Singh et al. 2012). Le Meridian offers exactly the opposite; it customizes services for its customer to a very large extent (Kielnhofers 2012). It provides services as per the specification of each customer. This might result in additional operating costs but offers more customer value and satisfaction.
Cutting costs to increase profits
To make profits, companies need to maximise their revenues and minimise their expenses. For a long period the Indian hospitality industry has been facing a crisis of meagre profits and losses (Ghosh 2013). However, hoteliers are turning to cost restructuring to break this trend. The Taj Group is planning to rationalise the payroll of the top management to cut down on expenses. Similarly the Leela Group intends to reduce overhead costs below their earnings (Khosla 2015). The Oberoi group is reducing its electricity consumption because to cut down on rising electricy expenses. ITC Hotels believes in responsible luxury, all its luxury hotels are LEED (Leadership in energy and environment design). Consequently both hotels maintain reduced power bills and hence save money (ITC 2014).
Strategic marketing warfare
Marketing is one of the most crucial components to achieve sales target and build loyal customers (Tracy n.d.). Without aggressive marketing strategies a hotel will not be able to communicate its superior quality of services to its customers. The Leela (earlier known as Leela Kempinski) formed a marketing alliance with the Kempinski group of hotels to promote The Leela on a global scale (Baggonkar 2012). In 2012, they parted ways as The Leela had developed its own marketing and distribution channel. However later The Leela tied another strategic marketing alliance with Preferred Group of Hotels for global promotions. Oberoi Hotels also entered into a marketing alliance with the Hilton Hotel Group in 2004 but in 2008 they parted ways (Phillip & De 2007). Oberoi Hotels are marketed through simple print media and email campaigns to prospective clients. Hotel groups like The Taj, ITC and The Leela are opting for direct marketing rather than outsourcing their campaigns to digital marketing groups. The Taj and Leela have re-launched their website with interactive features and are also planning to launch new mobile applications (Sapam 2015).
Expanding to reach larger geographical area
Expansion is a critical strategic plans to increase the annual turnover of a company. Hotels plan to spread over larger geographical area by increasing their number, increase the capacity of the existing hotels or acquire more hotels. ITC plans launch new hotels in Kolkata, Mahabalipuram, Ahmedabad, Hyderabad and Colombo by 2018. They currently have more than 100 hotels and plan major expansions by the next 3 to 4 years (Khosla 2014). The Taj Hotel Group currently has 122 hotels and further plans to expand it to 156 hotels by 2017 (“Tata’s Indian Hotels” 2013). The Oberoi Group has hotels under 2 brands; Oberoi and Trident. It has over 30 properties which is significantly lesser than its competitors, but the focus is to grow slowly by maintaining superior standards (Ghosh & Puriyenthuruthel 2015).
Building loyal customers
Hotels rely on their customers to visit them again and again and create a good word of mouth. In order to reward loyal customers Trident hotels offer the “Trident Privilege Programs” to loyal customers. They provide discounts on business centers, free dining vouchers and guarantee that rooms will be made available even 72 hours prior to their arrival. The Leela’s Platinum membership holders can avail unique local experience at the hotel’s expense. ITC Welcome Group has tie-ups with airlines like Air India, Jet Airways and Kingfisher to provide Welcome Awards point to frequent visitors which they can transfer to airlines’ frequent flier programs. Hilton gives Hilton Honors to committed guests in which they provide benefits across Hilton’s global hotel brands (Joshi 2011).
Keeping employees happy
Hotels provide superior services to their guests to keep them happy and these services are provided by the hotel employees. And they can offer superior and satisfactory services if they are happy. Thus, it is important for hoteliers to offer their employees satisfactory compensation, adequate benefits and a healthy working environment (FindLaw, n.d.). Hyatt offers perks to their employees, good compensation, saving plans for retirement and helps with children’s higher education, educational reimbursement and internal training curriculum (Hyatt Corporation 2015). Marriott offers its employees discounts on hotel rooms and food and beverages across its hotels in the world and competitive salary (Marriott Corporation n.d.).
- Baggonkar, S., 2012. Leela parts ways with Kempinski | Business Standard News. Business standard. Available at: http://www.business-standard.com/article/companies/leela-parts-ways-with-kempinski-112021600005_1.html [Accessed September 9, 2015].
- East India Ho, 2015. Annual Report 2014-2015. EIH Limited.
- Eisen, D., 2014. Marriott international. Hotel Management, 229(3), p.74.
- “Employee Satisfaction,” Employee Satisfaction and Running a Successful Business – FindLaw. Find Law. Available at: http://smallbusiness.findlaw.com/employment-law-and-human-resources/employee-satisfaction-and-running-a-successful-business.html [Accessed September 10, 2015].
- Ghosh, A.D., 2013. Indian hotel industry. ICRA Rating feature, (March 2012), pp.1–25.
- Ghosh, S. & Puriyenthuruthel, J., 2015. Oberoi hotels seek expansion avenues abroad – Business Today- Business News. Business today. Available at: http://www.businesstoday.in/magazine/corporate/oberoi-hotels-aims-to-be-best-brand-prs-oberoi-on-eih-growth/story/214448.html [Accessed September 9, 2015].
- Hawks, D., Product Differentiation in Marketing: Examples, Strategies & Definition – Video & Lesson Transcript | Study.com. Available at: http://study.com/academy/lesson/product-differentiation-in-marketing-examples-strategies-definition.html [Accessed September 10, 2015].
- Hyatt Corporation, 2015. Wages and Benefits | Hyatt Workplace. Hyatt Website. Available at: http://www.hyattworkplace.com/our-workplace/wages-and-benefits [Accessed September 9, 2015].
- ITC, 2014. ITC Limited PSPD. ITC Annual report.
- Johnson, S., What Is the Meaning of Organizational Strategy? | Chron.com. Chron. Available at: http://smallbusiness.chron.com/meaning-organizational-strategy-59427.html [Accessed September 8, 2015].
- Joshi, D., 2011. Royal treatment for loyalty | Business Standard News. Business standard. Available at: http://www.business-standard.com/article/pf/royal-treatment-for-loyalty-111112200019_1.html [Accessed September 9, 2015].
- Khosla, varuni, 2015. Corporate restructuring is the need of the hour at Indian hotel chains, say experts – timesofindia-economictimes. Economics Times. Available at: http://articles.economictimes.indiatimes.com/2015-03-27/news/60553445_1_taj-hotels-oberoi-group-prs-oberoi [Accessed September 9, 2015].
- Khosla, varuni, 2014. ITC planning to invest Rs 9,000 crore to expand its hotel portfolio – timesofindia-economictimes. Economics Times. Available at: http://articles.economictimes.indiatimes.com/2014-11-28/news/56540596_1_itc-hotels-150-hotels-hotel-portfolio [Accessed September 9, 2015].
- Kielnhofers, D., 2012. The Power of a Brand or Successful Differentiation | By Dietmar Kielnhofer Ph.D. Hospitality net. Available at: http://www.hospitalitynet.org/news/4054677.html [Accessed September 8, 2015].
- Marriot Corporation, Employee Benefits | Rewarding Careers with Marriott. Marriot Website. Available at: http://www.marriott.com/careers/working-for-marriott/employee-benefits.mi [Accessed September 9, 2015].
- Phillip, L. & De, S., 2007. Hilton Mumbai to be named Trident Towers – timesofindia-economictimes. Economics Times. Available at: http://articles.economictimes.indiatimes.com/2007-09-28/news/27685323_1_trident-brand-oberoi-group-marketing-alliance [Accessed September 10, 2015].
- Sapam, V., 2015. Hotel chains make digital push in a bid to cut out online agents – Livemint. Live Mint. Available at: http://www.livemint.com/Companies/1BoW3WsEWWWWab7j3nSbzO/Hotel-chains-make-digital-push-in-a-bid-to-cut-out-online-ag.html [Accessed September 9, 2015].
- Singh, S., Kumar, D. & Sharma, N., 2012. Marriott India : Managing Its Hospitality through Gearing. Marriott India: Managing Its Hospitality through Gearing Service Quality, 3(2), pp.86–96.
- “Tata’s Indian Hotels,” 2013. Tata’s Indian Hotel Company plans to have 156 units globally by 2017 – Business Today. Business today. Available at: http://www.businesstoday.in/current/corporate/indian-hotels-company-plans-156-hotels-globally-by-2017/story/198550.html [Accessed September 9, 2015].
- Tracy, B., Enhance Your Marketing Strategy, Increase Your Sales. Brian Tracy International. Available at: http://www.briantracy.com/blog/sales-success/enhance-your-marketing-strategy-increase-your-sales/ [Accessed September 10, 2015].