Hospitality Business Development

This article discusses Marriott's business positioning and development strategy, including its market segmentation, marketing mix, sales techniques, competitive advantage, and growth strategies. Marriott has built a reputation for creating high-quality products that ensure the best experience in the world. The hotel targets middle-upper age customers, professionals, business travelers, and families. Marriott has gained a competitive advantage through cost leadership, focus, and differentiation. The hotel has a robust owner and franchisee benefits program to achieve business goals. Marriott provides an expansive portfolio of brands to maximize investment in the hotel. The hotel's operating model consists of single ownership hotels and asset-light franchisee and management contracts.

RUNNING HEAD: Hospitality Business Development
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Hospitality Business Development

Hospitality Business Development 1
Contents
Introduction...........................................................................................................................................2
Business positioning strategy................................................................................................................2
Existing and future development strategy..............................................................................................6
Conclusion.............................................................................................................................................9
References...........................................................................................................................................10

Hospitality Business Development 2
Introduction
Marriott is an American multinational hospitality company headquartered at Bethesda,
Maryland in Washington D.C. The hotel is having more than 6500 properties across 127
countries. The company manages a broad portfolio of hotels and lodging facilities. Marriott
continuously creates extraordinary experiences for the guests. The hotel generates strong
economic returns for the owners and franchisees. Marriott provides better career
opportunities to the associates. It acquired Starwood hotels and resorts in 2016. It is the one
of the biggest opportunity of the Marriott and makes the largest and global lodging company
worldwide. Marriott puts people first and pursue excellence in it’s core values.
Marriott practices multi stage segmentation. It have personalized it’s brands to cater to unique
target markets. The hotel targets middle upper age customers, professionals, business
travellers and families. The hotel keeps on updating it’s market segmentation strategy. For
instance, recently, it was targeting football fans who are Visa card holders. They were
entitled to get a $20 Visa gift card and combo snack pack. The luxury hotels of the Marriott
can be found in the metropolitan cities such as London, Paris, LA and NYC. Marriott have
portfolio of brands such as Residence Inn, Courtyard, Fairfield Inn & Suites, Spring Hill
Suites and Towne Place Suites. The Fairfield Inn & Suites have business centres connected
with internet and printing facilities. It also provides free Wi-Fi in public spaces. The rooms
have access to high speed internet and are well-lit. Marriott is committed to service
excellence.
Business positioning strategy
The Marriott has effectively built up target market by pointing the needs of the customers.
The business positioning strategy of the Marriott can be understood by the points given
below:
Existing market and segments
Marriott believes that the customers vary in willingness to pay for different levels of ease and
luxury. It is the motive that hotel created a tier of various style hotels which varies from price
to facilities in order to meet want and need of the customers. The company have
approximately 3.747 properties, 14 brands in 72 countries. The hotel covers luxury, seasoned,

Hospitality Business Development 3
high income and business professionals. It also covers business travellers, middle class and
young business professionals. Marriott segments on the basis of the factors given below:
Geographic: The hotels of the Marriott group are dispersed geographically. The luxury hotels
are in the metropolitan cities of all the countries. For instance, the hotel has branches in
London, NYC, Paris and LA.
Demographics: The demographics undertake revenue, religion, culture and education. The
chains of the hotels are in the particular areas depending on the necessities and wants of the
consumers. There is tier for every income group in the Marriott organization (Aliouche &
Schlentrich, 2011). The hotel also offers different services for different age groups.
Behavioural: The behavioural segmentation is done on the basis of brand loyalty, habit, status
and benefits. Marriott proposes reward program includes free nights, advancements and third
party promotions in order to charm it’s loyal customers (Rogerson, 2011).
Psychographics: This segment focuses on the lifestyle of the customers. For example, a jet
setter residing in Beverly Hills will like to stay in the accommodations that they are used to.
They will prefer to pick JW Marriott over a Fairfield to fulfil their needs.
Marketing and promotion strategy
Marriott makes use of marketing mix and promotional tools in it’s marketing and promotion
strategy.
The marketing mix of Marriott covers product, price, place and promotion.
Product: Marriott is one of the leading luxury hotel chains in the world. The products of the
Marriott are in the form of hospitality services. The services of the company are divided in
three parts, core, actual and augmented. It includes different services such as hotels, resorts,
hospitality management, accommodations and more (Alon, Ni & Wang, 2012). The
maximum revenue is generated from it’s hotels segment. The hotels are categorized into
various brands such as St. Regis, JW Marriott, Bulgari, Le Meriden, Westin, Renaissance
hotels, Courtyard, Four points and many more. The JW Marriott, a sub brand of Marriott
international is designed to target customers who seek for the luxurious atmosphere. The
hotel mostly targets the person above 30 who earn higher income and usually travel for the
business purpose.

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Price: The price of Marriott varies with the hotels, customers and the location. The main
motive of the hotel is to provide right product at the appropriate price. Marriott decides the
prices of the hotels by maintaining the value with the quality context. It helps Marriott in the
maximization of the revenue (Lin, et. l. 2016). The prices of the hotel vary as per the demand
of the customers and to maintain cost incurred in the promotions and maintenance. The hotel
follows competitive price strategy as per the changing situations and competitor’s behaviour.
Place: Marriott has setup itself in over 120 countries and the hotels are sited in different
places across the city such as near airports, freeways and the famous markets. The hotel has
embraced a mix channel strategy which includes both direct channel and 3 party channel. The
hotel has specific tiers market where it targets the customers directly or with the help of the
third parties known as intermediaries. It generally targets to the younger generation of
professionals and travellers.
Promotion: Marriott concentrates on the digital upgrade of it’s products. Marriott is an global
brand and has created a website which represents products in a comprehensive manner. The
website permits users to book rooms in the hotels with an ease. The company make use of
different advertisements, videos and campaigns as part of promotional tools on the various
social media platforms (Lee & Lee, 2017).
Sales techniques
The retailing and merchandising are the two techniques which are used by the Marriott to
promote sales. Both are parts of the marketing mix. Retailing takes place when the customers
select products and completes the purchasing transaction. Marriott makes use of retailing to
sell rooms. The sales are mostly completed online although the booking can be made directly
at hotels. Marriott makes use of techniques in the retail selling such as the hotel provides
great choice to the customers before making a final decision. For instance, the customers are
provided free breakfast and Wi-Fi along with the stay (Cai & Hobson, 2004).
Merchandising is used by Marriott in presenting products on it’s website in a way to
influence buying decision of the customers. The hotel even makes use of external
merchandising to maximize customer’s value. The hotels and services are reflected in such a
way on the website that it helps in enhancing sales and influences customers to spend more
on the services of the hotel. The external merchandising is divided into three parts, mass,
personalized and segmented merchandising. The selling of merchandise in large quantitate to

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a group of people is known as mass merchandising. This strategy is used by the Marriott to
target every guest by providing same types of products and services at appropriate price (Lee,
2008). The personalized merchandising is the most cost effective means. The hotel can
increase it’s revenue by understanding the needs of the customers. The segmented
merchandising develops catalogues for the different guests in order to meet their need as per
their interest.
Existing capabilities
Marriott offers matchless choice for the guests and incomparable worth for owners. It drives
efficiency and a clear competitive advantage. The unique selling proposition of Marriott is
global market leadership. The high brand recognition has helped Marriott to gain core
competency through quality customer service. It tailors to the different demographics. The
innovative technologies are used by the Marriott in meeting customer experiences (Knutson,
2017).
The hotel has attained capability by attentive guest care, in-depth local knowledge, amenities
and the excellent loyalty programs. The hotel provides electronic check-in and online
booking facilities. It makes you live like local and provides you home away from home (Sr &
Croes, 2003).
Basis of existing competitive advantage
Marriott is a global franchisor and operator of hotels and operates under various brand names.
It has gained competitive advantage by generic competitive advantage.
Cost leadership: Marriott has various brands which aim to target price sensitive consumers.
The brands like Springhill Suites and Courtyard targets upper modest price sensitive
consumers. Whereas Fairfield Inn targets lower modest price tier. The hotel has effective cost
production which permits to charge low prices compared to it’s opponents. Marriott strives to
keep low costs along with securing reasonable profits (Uggla, 2017). It caters broad range of
customers and provides comfortable rooms and exceptional services. The hotel has been
capable to lower operating costs by several ways such as green buildings, waste reduction
and greener supply chains.
Focus: Marriott is a worldwide franchisor which was made possible due to the focus of the
hotel on the various segments. It covers customers of different classes. The hotel has

Hospitality Business Development 6
provided options for the customers from basic to the luxury hotels. Marriott also have
focussed on the localities such as where customers like to stay such as highways, famous
markets and in the hill areas. The hotel focuses on innovation and tries to ensure total value
for money (Kim, Gu & Mattila, 2002).
Differentiation: Marriott is a major operator of this strategy as it continues to improve
products and services which uniquely please the need of the customers. Marriott not only
fulfil the needs of the customers but it’s offers are appreciated and professed superior than
competitors. The hotel has gained reputation for innovation and quality. The value added
delivered by the hotel allows charging premium price from the customers of higher income.
For instance, Ritz-Carlton is known for it’s unique architecture and the exceptional dining
options and the personalized guest services.
Existing competition
Strength: Marriott has dominant industry presence and acquisition of Starwood Hotels and
resorts is one of the reasons. It has beaten the leading hotel in the industry, Hilton worldwide.
Marriott has more than 6,000 hotels in about 120 countries. It is also the leading hotel
company in the world by market value, total number of rooms and portfolio of 30 brands. The
hotel drives for the competitive advantage and tries to constantly reinvent to combat
competition. It is offering wide range of pleased products and services to the customers.
Marriott has established strong position and has attained loyalty if the customers (Waligo,
Hawkins & Clarke, 2014).
Opportunities: Marriott has opportunity to unite the business all over the world specifically in
the European countries. The hotel can enhance itself by growing it’s services in the market in
order to grasp loyalty of customers (Jogaratnam & Tse, 2004). The various planning’s and
strategies can be used by the Marriott to acquire and purchase assets which generate revenue.
The hotel has opportunity to grow in the market by improving direct marketing plans such as
use of the advertisements.
Existing and future development strategy
Existing growth strategy

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Market penetration: Marriott has built reputation in creating high quality products which
ensures best experience in the world. Market penetration is the percentage of the demand for
rooms actually accruing to. It is calculated as the ratio between the occupancy of rooms
against the total rooms of the hotel. Marriott has on an average more than 70% occupancy of
the rooms. It is 100% in the case of special events. The revenues of the hotel were $11.7
billion in 2010 compared to the $10.9 billion in 2009. The increased revenue shows the more
access and penetration in the market. The hotel is able to penetrate in the market due to
updated technologies and innovations. Marriott has signed an agreement with Travel Click
which is a provider of hotel ecommerce solutions. It will offer Marriott properties with
insight on booking history with many travel agents worldwide (Heung, Zhang & Jiang,
2008).
Market development: The Marriott provides robust owner and franchisee benefits to achieve
business goals. The assurance to communication and transparency builds relationships and
helps to develop in the market. The footprint of the hotel covers various parts of the world
than other travel companies (Iglesias, Markovic, Singh & Sierra, 2017). It represents
development of the hotel in the fastest growing markets. Marriott delivers values to the
customers through state of the art technology and wide share services to certify more return
on the investment to the owners (Chan, 2014).
Product development: Marriott provides expansive portfolio of brands to maximize
investment of hotel. Marriott has 30 brands which deliver premium and range of development
options worldwide. These brands are JW Marriott, Bvlgari, St. Regis, Renaissance, The Ritz
Carlton, Edition and more. The portfolio of the Marriott provides guests the right brand in the
right place globally. The brands are differentiated by the visionary designs. The hotel
provides three renowned loyalty programs such as Marriott rewards, Starwood preferred
guest and Ritz Carlton Rewards. It drives matchless guest loyalty. The loyalty program of the
hotel sells 50% of the rooms every night and they stay and spend more on the hotels.
Existing operating model
Marriott is the world’s leading hotel. It’s portfolio consists of thirty brands specifically strong
positions in the luxury, lifestyle and classic full service. It has been observed that 95% of the
operating profits are generated from asset light franchisee and management contracts. The
single ownership hotels are totally operated by the Marriott and it bears all the costs
associated with the hotel. It is also befitted from all the income (FitzPatrick, Davey, Muller &

Hospitality Business Development 8
Davey, 2013). Marriott has single ownership hotels in various countries where it has 100%
ownership and control. The joint venture is a significant trend for the Marriott in the coming
years. The hotel has joint venture with AC hotels in Spain to create AC hotels. These hotels
provide professional services which facilitates the best deals ever (Chen & Dimou, 2005).
The AC hotels in Spain are being combined with the Marriott to form AC hotels by Marriott.
The AC customers are going to be benefitted by the Marriott rewards programmes with more
than 3400 hotels and 34 million members. These hotels are being available on the
Marriott.com.
In the management contracting, the hotel and it’s operations are managed by the third party.
The manger is paid management fees. Marriott had 21 management contracts for the hotels in
the Asia Pacific Region in 2009. These hotels were opened by the end of 2013. It represented
4 of the company’s lodging brands and nearly 7000 hotels. Commonwealth Hotels added
Courtyard to it’s portfolio in 2018. When the hotel is possessed and operated by the 3 party
brand name and the owner pays licensing fees to the Marriott. The hotel expects to operate
franchisees over 240 hotels in the Middle East and Africa region by 2020. The commitment
of the Marriott builds beneficial and long term relationships with the third parties (Dev,
Brown & Zhou, 2007).
Recommendations
Although Marriott has done superb job of expanding locally and internationally, still there is
room to grow somewhere else. In this scenario, China is having the largest population and
has one of the largest travelling markets. Starwood has strong presence in the China, the
merger of Marriott with Starwood can grow it’s presence in the China (Zhang, Guillet & Gao,
2012). The increasing flexible income and growing middle class has mounting desire for
travel which can be benefit for the Marriott.
Marriott can improve it’s direct marketing plans as in the case of billboards. Several plans
and policies can also be used by the Marriott to purchase various assets which generates
revenues. It can also grow it’s services in order to grasp loyalty of the customers (Wang &
Chung, 2015).
It has seen that people across the world like to stay in the luxury hotels when they travel with
families. This trend has sharp incline in the developing economies which can be opportunity
that can be utilised by the chains of the hotel.

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Marriott can support to the LGBTQ community and provide exceptional offers to the same
sex couples. Such trends show opportunity to the hotel. Marriott can also tie up with the
airlines for the further development by providing additional services (Cunill & Forteza,
2010). Now days, customers prefer personalized attention and they are willing to pay for it.
Marriott can charge a premium for rendering personalized services.
The biggest growth opportunity for the Marriott is the international service segment. The
company can expand to more countries and can attain more property. The franchisees are a
good option to attract operating margins and driving developer’s interest globally (Yelkur,
2000).
Conclusion
Marriott is one of the leading hotels worldwide. The hotel provides the best service when it is
compared to the competitive hotels. The brands of the Marriott understand and fulfil the need
and preferences of the customers. The brands are capable enough to provide services from
basic to luxury. This report has defined the business positioning strategy. The existing
segment of the Marriott and the marketing and promotion strategy have great role in defining
the positioning strategy of the hotel. The hotel has sufficient resources and competencies
which lead to the unique selling proposition. The cost leadership, focus and differentiation
help in gaining competitive advantage to the Marriott. The strength and opportunities
describes the position of the hotel in the competitive environment. The existing growth
strategy and the existing operating model has been discussed which has great role behind the
success of the hotel. Finally, recommendations are given to direct further development of the
Marriott.

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