Abstract

The necessity for firms to determine consumer wants and needs in the planning of its products and services informs the need for marketing. This sort of consumer orientation is important if a firm wants to attain higher degrees of consumer satisfaction and increase the demand of its products and services. McCarthy developed the most prevalent type of marketing mix that consists of the four Ps. The process of marketing entails the use of conventional decision-making variables within the framework of a firm’s macro-environment. The need for market segmentation is more evident in the hospitality sector. One aspect of market segmentation for the hospitality industry is the distinct consumer segment. Firms can adjust their marketing mix throughout the product life cycle based on the changes in the marketplace. The inherent dissimilarities between products and services caused the development of an alternative marketing mix that is relevant to the hospitality industry. The components of this mix are more adaptable for decision-making in the hospitality industry.

Key words:  Marketing, marketing mix, market segmentation, product life cycle, hospitality industry

Marketing Practices in Swissotel Hotels and Resorts

Introduction

Swissotel Hotels and Resorts is a unique, award-winning group of exclusive hotels for the modern luxury savvy leisure and business traveler, combining the legendary Swiss hospitality with lavishly fresh, contemporary design. Every branch of Swissotel offers personalized services with efficiency and glamor. Situated in famous gateway destinations and urban centers, the hotels provide expedient access to local attractions, business, as well as shopping districts. The group’s Swiss tradition offers a clue to its mastery of organizational aptitude, reliability, punctuality, attention to finer details, and safety. They ensure that all guests enjoy an unmatched experience and that every Swissotel stakeholder has complete peace of mind.

The idea of marketing is informed by the principle that firms must establish consumer needs and wants before planning its products and services. A firm can increase the demand of its products and services, and attain higher degrees of consumer satisfaction through this kind of consumer orientation. The conventional marketing mix consists of the four Ps, which is price, product, promotion, and place (Ehmke 2005, p. 1). These four aspects of the marketing mix constitute the decision-making variables that marketing managers can use. The firm that wants to market its products and services determines the decisions regarding the marketing mix. Nonetheless, all firms operate within a dynamic external environment that neither the firm nor its staff can influence, and this external environment is segregated into five distinct areas. These are political and legal, social, economic, technological, and competitive.

 

 

Theory

There have been substitutes to the conventional marketing mix presented in the marketing literature to respond to the differences existing between services and tangible products or goods. Services have four key attributes that influence the design of marketing plan. These are inseparability, intangibility, variability, and perishability (Oh & Pizam 2008, p. 60). These attributes led to the development of an enlarged marketing mix for services, which has seven Ps. The seven Ps consists of the original four Ps plus an additional three, which are people/participants, physical evidence, and process. The hospitality marketing mix is more pertinent for tourism organizations, hospitality services firms, and other hospitality and travel-related firms. The three constituents of the marketing mix of hospitality industry include the communication mix, the presentation mix, and the product-service mix (Oh & Pizam 2008, p. 60). The criteria that consumers use to appraise services are established and explained elaborately.

The Conventional Marketing Mix

McCarthy developed the most widespread type of marketing mix used in most literature in the 1970s (Oh & Pizam 2008, p. 61). It consists of the four Ps. The general marketing process entails the use of the conventional decision-making variables within the framework of the firm’s macro-environment. The firm controls the marketing mix, although it cannot directly control the macro-environment. The main goal of the firm is to establish a mix for its products that meets the needs and wants of consumers while giving the firm a competitive advantage in the market. Companies attempt to develop marketing policies that utilize the marketing mix that establishes a sustainable competitive advantage, which leads to profitability and long-term growth (Goi 2009, p. 2).

The Price aspect refers to the value that is attached to the product or service. The price includes both monetary and non-monetary aspects. Examples of non-monetary aspects of the price include the convenience of the location and the time taken to assess alternative products (Oh & Pizam 2008, p. 62). Examples of non-monetary price include the expediency of location and the time taken to explore and appraise alternative services or products. Ultimately, the perceived value or price of the service or product determines the customers’ purchasing decision and the degree of consumer satisfaction. Value can be viewed as the trade-off between quality and price (Lings 1999, p. 249). It refers to what the customer receives for the cost incurred.

The Product aspect includes the goods and services that are used in the production of the final product. In the case of the hospitality industry, a product is the service that consists of the total offering. For instance, a hotel room service may include the guest room, housekeeping, restaurant, fitness center, room service, and valet service (Oh & Pizam 2008, p. 62). The Place aspect of the marketing mix encompasses the logistics of offering products and services that are easily accessible to the consumers. Restaurants have a tendency of selecting high traffic areas such as in central business districts or locations that are close to key attractions. Likewise, most hotels are situated close to establishments such as industrial centers, airports, tourist attractions, and urban centers. This is because these areas are easily accessible to their target markets.

The Promotion aspect includes all communications associated with the marketing of a product or service. The four elements of the promotion mix include advertising, sales promotion, publicity, and personal selling (Oh & Pizam 2008, p. 64). Most hospitality firms design their promotion mix based on their locations and customer base. Hotels have a tendency of drawing their clients from national, regional, and international markets. For this reason, most hotels only advertise in television and magazines with national coverage. However, the introduction of internet marketing has provided hotels such as Swissotel Hotels and Resorts with an affordable way of reaching their existent and potential international clients.

Principles of the Market Segmentation

Appropriate market segmentation has allowed Swissotel Hotels and Resorts to price and enforce inventory controls to capitalize on revenue collection from their various businesses. To be successful, the hotel management must make certain that they utilize the most rational method to track their businesses. The requirement for market segmentation is relatively more pronounced in the hospitality sector because of the changing consumer needs and the immense amounts of product offerings (Pennisi 2010, p. 2). Segmentation continues to be a complex issue, with the distinction between specific market offering and amenities becoming very blurred. Understanding some fundamental concepts will permit Swissotel to operate in a more focused way, with achievable objectives and measurable outcomes.

One feature of the market segmentation for the hospitality industry is the distinct consumer segment. While the notion of unique consumer segmentation is new in the hospitality industry, it may yield noteworthy results. By keying out a unique consumer segment, hotels can shift their attention to, and enter a non-traditional market (Dolnicar 2008, p. 8). On the other hand, revenue management can go about using the channels of distribution targeted at specific customer segments, ensuring the institution of proper pricing and product description while permitting appropriate tracking and reporting.

Marketing Mix and the Product Life Cycle

The dynamic market for products and services demands that firms should continuously monitor the environment and adjust their marketing mix to utilize the opportunities and mitigate the effects of threats (Lorette 2012). Products undergo a life cycle that consists of four stages. These are the introduction, growth, maturity, and the decline stages. Based on marketplace changes, firms can adjust the marketing mix throughout the life cycle of the product (Steffens 2002, p. 5). During the introduction phase, new products introduced in the market experience low sales and cumulative costs such as production costs, capital costs, and the costs associated with research and development. This may lead to negative profits. Therefore, firms may employ the ‘price skimming’ strategy to increase their profit margins (Stiving 2012).

The growth stage follows the introduction stage. An increase in the level of awareness causes the sales volume to grow. The high profit margins and the cumulative sales volume leads to positive profits. Many sellers with comparatively similar products characterize the maturity stage. The number of sales and distribution outlets are at peak at this stage and the prices are low due to competition (Oh & Pizam 2008, p. 70). The decline stage is the final in the product life cycle. The product experiences a negative market growth rate and technological improvements are inadequate. In addition, profit margins are relatively low. Only the most ardent competitors survive, and the decline in prices persists.

Conclusion

The intrinsic differences between services and goods occasioned the development of a substitute marketing mix for use in the hospitality industry. This marketing mix has product-service mix, presentation mix, and communication mix as its components. The product-service mix is the blend of products and services that a firm offers to satisfy the needs of its target market, whether these products and services are for sale or free. The presentation mix is the elements that the firm employs to increase the palpability of their product-service mix (Friesner 2011). On the other hand, the communication mix can be viewed as the communications between a firm and its target market that increases the palpability of its product-service mix, or that sways consumers to purchase. It is comparable to the promotion element of the conventional marketing mix. These components are more versatile for decision-making in the hospitality industry. However, while they are exhaustive, they cannot be mutually exclusive.

References

Dolnicar, S 2008, Market Segmentation in Tourism. University of Wollongong, Australia.

Ehmke, C 2005, Marketing’s Four P’s First Steps For New Entrepreneurs. Purdue University,       Purdue Extension, West Lafayette.

Friesner, T 2011, Marketing Mix. Retrieved from http://www.marketingteacher.com/lesson-           store/lesson-marketing-mix.html

Goi, CL 2009, A Review of Marketing Mix: 4Ps or More? International Journal of Marketing       Studies. 1, 2-5.

Lings, I 1999, Balancing Internal And External Market Orientations. Journal of Marketing            Management, 15( 4). pp. 239-263.

Lorette, K 2012, How Would the Marketing Mix Change at Different Stages of the Product Life     Cycle? Retrieved from http://smallbusiness.chron.com/would-marketing-mix-change- different-stages-product-life-cycle-3283.html

Oh, H & Pizam, A 2008, Handbook of Hospitality Marketing Management. Butterworth-  Heinemann, Oxford.

Pennisi, LA 2010, Greening the Hospitality Industry. University of Nebraska, Nebraska.

Steffens, PR 2002, The Product Life Cycle Concept: Buried or Resurrected by the            Diffusion         Literature? Academy of Management Conference, Technology and Innovation Management Division, Denver.

Stiving, M. (2012). What You Need to Know About Pricing. Retrieved from             http://www.entrepreneur.com/article/224121