Malmaison Hotel Marketing Strategy

This assignment requires an in-depth analysis of the marketing strategies employed by Malmaison Hotels. Students are expected to utilize a SWOT analysis to identify the hotel's strengths, weaknesses, opportunities, and threats. The analysis should also encompass competitor research within the hospitality industry and consider relevant global tourism trends. Finally, students should draw upon provided sources like scholarly articles and company websites to support their evaluation.

Running head: TRAVEL AND TOURISM MANAGEMENT
Travel and Tourism Management
Name of the Student
Name of the University
Author’s Note

1TRAVEL AND TOURISM MANAGEMENT
Executive Summary
This study focuses on the management of UK’s award winning travel and tourism
organisation Malmaison. The organisation has fifteen branches expanded over different cities
of UK, major of them situated in London, Oxford and Brimingham. The UK’s popular hotel
chain Malmaison gained its popularity due to its astonishing quality of services provided to
the customers. The following study will critically evaluate and analyse the business
environment and marketing activities. It will further provide the organisation a full proof
marketing plan for their expansion in the international market. The selected international
markets for the expansion of Malmaison’s business are Australia, India and United States.
The developed tourism industry of Australia and United States can provide benefits to the
country. India on the other hand is developing country, but the growth of tourism industry
reflects potential pace. Moreover, number of international tourists is also high in case of
India, which makes it a potential target market for Malmaison. Pricing and quality of
products and services on the other hand has to be medium to high in case of India as
identified from the discussion; whereas they can hold their traditional high priced products
and services for the markets in Australia and United States.

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Contents
Executive Summary...................................................................................................................1
CHAPTER 1...............................................................................................................................4
Introduction.....................................................................................................................................4
CHAPTER 2...............................................................................................................................4
Situation Analysis...........................................................................................................................4
Macro Environment Analysis (Pestel)................................................................................5
Micro Environment Analysis..............................................................................................6
Internal Analysis Mckinsey 7s............................................................................................7
Swot Analysis.....................................................................................................................9
CHAPTER 3.............................................................................................................................11
International Market Practices of Malmaison............................................................................11
12c Framework of 3 target country...................................................................................12
CHAPTER 4.............................................................................................................................15
STP.................................................................................................................................................15
Methods to Evaluate Cost Efficiency of Sales Promotion.......................................................16
Significant Issue Affection Overall Strategy.............................................................................17
CHAPTER 5.............................................................................................................................18
Recommendation..........................................................................................................................18
Risk Assessment of Suggested Strategy.....................................................................................19
CHAPTER 6.............................................................................................................................20
Conclusion.....................................................................................................................................20

3TRAVEL AND TOURISM MANAGEMENT
References................................................................................................................................21

4TRAVEL AND TOURISM MANAGEMENT
CHAPTER 1
Introduction
Globalisation has contributed in connecting the international market and increasing
the competitiveness. International expansion became mandatory for every business to survive
in the international market. However, Richter (2012) found globalisation as an advantage as it
provides opportunity for the organisations to make their international presence. Travel and
tourism industry is one of the fastest growing in the age of globalisation and contribute a
significance amount in the global economy. Schmid, Grosche and Mayrhofer (2016)
proposed a similar result pointing out the cause. As per their identification, there is a
noteworthy change in peoples’ attitude that leads them to explore new place that in turn
supplements in the growth of travel and tourism industry.
This study focuses on the management of UK’s award winning travel and tourism
organisation Malmaison. The organisation has fifteen branches expanded over different cities
of UK, major of them situated in London, Oxford and Brimingham (White, 2014). The UK’s
popular hotel chain Malmaison gained its popularity due to its astonishing quality of services
provided to the customers. The hotel chain attributes their global popularity to their
marketing activities that includes media coverage in both national and international level. The
following study will critically evaluate and analyse the business environment and marketing
activities. It will further provide the organisation a full proof marketing plan for their
expansion in the international market.

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CHAPTER 2
Situation Analysis
Ride and Hollensen (2015) defined situational analysis as of primary importance to
the organisations as it helps identifying desired and undesired factors exists in the internal
and external environment. Situational analysis of Malmaison will provide greater insight
about its environment and mode of operation in the existing market.
Macro Environment Analysis (Pestel)
Macro environment cannot be controlled with any level of strategic planning and the
organisation has to modify their business strategy accordingly aligning it to the external
environment of their operational area. PESTEL is a useful tool for analysing the external
environment that can provide greater insight of their market environment.
Political – The industry under study is in the top list in UK and contribute significant portion
of the economic growth. This led the UK government to collaborate and actively participate
in the events that promotes the travel and tourism industry. Latest introduction of regional
growth fund will influence the growth of Malmaison. However, Wu (2016) on the other hand
suspects that Brexit might have adverse effect of the industry. The Brexit is likely to decrease
the transaction between the UK and other countries that falls under EU. The business
structure between the UK and other EU countries are likely to change; for example will
reduce the visit of the foreign businesspersons, which can reduce the sale of the industry.
Economic - Visitbritain.org (2017) estimated the growth of Britain’s travel and tourism
industry will reach £275 billion by 2025 and marked it as the fastest developing industry in
UK. They further assumed that the income generated by this particular industry would
contribute around 10% of the country’s GDP, supporting 3.8 million jobs.

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Social – Earlier people looked for cheaper hotel rooms and services, as their cost of living
was higher than the income level. As identified by Yoo, Lee and Bai (2011) a raise in income
level has considerably changed the point of view and the people are spending more money on
the luxury in their visit. They are now looking for luxury hotels and satisfactory services in
UK.
Technological – Technological advancement is now a necessary for business in any industry,
especially in travel and tourism. The modern population in both UK and the target countries
are technologically advanced and utilises it in everyday life Hence, Malmaison can
incorporate advanced technology in their business process for promotion, booking and
service to satisfy their customers’ needs.
Ethical – Culture of the target audience of the market needs to be considered during
expansion as it has direct effect on tourism industry. The western culture of UK, Australia
and US is open, which will enable Malmaison to operate more freely than in the Indian
market where multiple ethical boundaries should be maintained.
Legal – Global Code of ethics in tourism set particular laws that the tourism industry needs to
follow. However, it may vary in accordance to the host country, but the overall
considerations have to be the same. It is to benefit the tourism industry by minimising the
negative adverse of the environment (Ethics.unwto.org 2017).
Micro Environment Analysis
Competitive Rivalry – Malmaison’s top competitor in the UK market are Ambassador
Hotel, South Beach Group Hotels, Topaz, a Kimpton Hotel, Splendia and Secretplaces Lda
which gives them a strong competitive revelry. Possible competitors in the Australian market
for Malmaison are Emirates One and Only Wolgan, Spicers Peak lodge and Jamala Wildlife
Lodge. Whereas, their competitors in US market are Grand America Hotel, Skylofts and

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Baccarat Hotel. In India, the possible competitors are Lake Palace, Taj Palace and Oberoi
Amarvilas.
Bargaining Power of the Suppliers – The bargaining power in case of third party booking
agencies is considerably low as there are a number of agencies currently operating in the
market. The internal suppliers of the business are the service providers. Malmaison has
strong-experienced workers in their possession who are working for a long period of time.
The reputation of the hotel can also be attributed to these staffs. Hence, bargaining power of
the supplier in this case can be considered as moderate as the workers are loyal to their
establishment. Moreover, the bargaining power of the external suppliers such as raw material
providers required for cooking can be high as the company has little experience in the target
market.
Bargaining Power of the Customers – Bargaining power as according to Cheng (2013) is
moderate to high as the substitutes available in the existing domestic market and possible
overseas markets are plenty. However, they can reduce the bargaining power of the
customers by providing unique products and services that may not be available in other
luxury hotels.
Threat of New Entrants – Threat of new entrants in all the considered markets are high. As
according to Cheng (2013), travel and tourism industry is growing in a significant rate in the
global market. Hence, it is likely to face threat from new entrants as many other luxury hotels
are seeking opportunity to expand their business to the overseas markets.
Threat of Substitute – Travel and tourism industry provides services as their primary
products to their customers along with quality rooms. Malmaison is a luxury hotel chain that
provides royal class rooms with services, which can be substituted by other hotels. Customers
have a number of choices available in case of luxury hotel rooms. According to Tavitiyaman,

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Qu and Zhang (2011) the threat of substitution in the target markets are considerably high for
the luxury hotel services.
Internal Analysis Mckinsey 7s
The model was developed in 1980s by a number of business research analysts namely
Tom Peters, Julien Philips and Robert Waterman for identification of organisational design
(Singh 2013). The analysis includes seven key elements of business for identifying the
effectiveness and alignment of the organisation towards their goal. It can help in
understanding the internal design of Malmaison in their UK market.
Strategy – Malmaison currently has their hotel chain around the major cities of UK. They
have strategic alliance with The Big Partnership for their international marketing. They are
the chain of luxury hotels, which they seek to hold in their international market. They have to
re-brand their hotels in the proposed target market of Australia, India and United States.
Structure – They currently follow top to bottom structure that centralises the authority of
decision-making. It helps hotel business to maintain their standard, which should be
incorporated in Malmaison’s internationally expanded market.
Share Value – Aims to attain the top position in the luxury hotel industry with their unique
and international level of hotel services. Moreover, they have a high community
consideration and seeks to provide opportunity to grow. This lead the company to increase
brand loyalty for their workers as they retain most of their staffs in all their hotels.
System – From Alshaher’s (2013) study, it can be evaluated that Malmaison’s system follows
an integrated business model, which provides a wide range of facilities to their customers. It
incorporates easy online booking, luxury hotel rooms and dining, international services,
unique boutiques and many more. They have collaborated with third party agencies for online
booking and customer reviews.

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Skill – The experienced loyal employees are potential to provide international services to
their customers. Their unique luxurious services helps them attracting larger number of
international tourists as reflected in the customer review of tripadvisors (2017)
Staff – The staffs are well trained and experienced in all their hotels. Moreover, most of their
staffs are retained for a long period of time that helps them to serve the customers in the
standard the hotel desires. This needs to be carried into their international market to receive
greater response from their target audience (Malmaison.com 2017).
Style – The organisation has a top bottom up style that empower the management alone to
design and style their hotels. It helps them in maintaining their stared luxurious rooms with
quality services. Apart from the rooms and services, they have boutique style restaurant and
bar areas, banqueting and conference room, gym facilities, boutique spa, express check-in
and checkout facility and parking to their customers to provide them an experience never
before. They recently added a 24/7 helpline to answer their customers’ quarry for all their
hotels in UK. Their style is unique; adopting which in the international target market can
provide them competitive advantage.
Swot Analysis
SWOT analysis helps in identifying an organisation’s strength and weakness of the
organisation and sates the threats and opportunities lies in case of specific target market
(Mahmoudi, Haghsetan and Maleki 2011).
Strength Weakness
Malmaison is one of the top reputed
hotels in the UK travel and tourism
industry supported by various awards.
Malmaison provides unique ambience
The company is currently operating
within the boundaries of UK, which
limits their possible profit margin.
Considerably high charges are

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in their hotels.
The hotel provides royal class services.
The employee retention is considerably
high compared to other similar
organisations in the market.
The hotels are in good hands of loyal,
experienced and qualified staffs that
provided best quality customers
services in the area.
International marketing and
outstanding PR activities
imposed on the customers compared to
the room size. However, the service
charges are included in the charges that
are satisfactory.
Expensive hotel services and
overpriced food and beverages
Small parking garages in the branches
around UK.
The company gives less attention to the
technological aspect. Technological
adaptation can provide them greater
competitive advantage in the market.
Opportunity Threat
The company has the opportunity to
expand in the international market
outside Europe like India, Australia
and United States for their growing
tourism.
Expansion opportunity in other parts
of Europe such as Benelux, Germany,
France that are destinations of
international travellers.
Incorporation of modern technology in
their hotel chains can provide
competitive advantage. They can
The company is currently facing the
threat of new entrants as the new
companies are expanding their venture
in the UK market.
Constantly rising political unrest and
variations in the international market
can impose possible threat to
company’s operation.
Brexit has a direct impact on the
tourism sector of United Kingdom as
it can possibly decrease their tourist
count.

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innovate their agency by digitalisation
that will attract more number of global
tourists.
Table No. 1: SWOT Analysis
Source: Author’s Creation
CHAPTER 3
International Market Practices of Malmaison
As identified by Hoppner and Griffith (2015), customer preferences considerably
varies in different countries, which requires Malmaison to implement their marketing and
promotional activities accordingly aligning them with the customers’ preferences. The UK
luxury hotel organisation Malmaison is currently operating in the domestic boundaries
seeking to enter India, Australia and US. The selection is based on the growing attraction of
the international tourists in the selected countries. U.S and Australia are already attracting a
large number of foreign tourists for various purposes. India on the other hand is the leading
attraction for the western travellers due to its rich culture. The customer preference will
significantly vary as these due to the continental gap. They have collaborated with The Big
Partnership for their international venture. The company is currently operating within the
domestic boundaries of United Kingdom. They have expanded their branches into fifteen
major cities of UK serving luxury hotel rooms and royal class hotel services. They also have
executive lounge, boutique style restaurant and bar area, conference rooms and many more in
every single of their hotels (Tripadvisor 2017). Malmaison provides these royal class services
in premium pricing targeting the upper economic section of the tourist groups (Malmaison
2017). They have tactically placed their hotels in the major cities to make it more accessible

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for the customers. They further utilises various social Medias, social networks, third party
agencies, major events and parties for the promotion of their hotels, which is serving them
well in attracting both domestic and international tourists and they are planning to continue
these activities in inter international market.
12c Framework of 3 target country
12c’s Australia India United States
Country Total population of
24.13 million with
GDP of 1.205 trillion
USD
Total population of
1.324 billion with
GDP of 2.264 trillion
USD
Total population of
323.1 million with
GDP of 18.57 trillion
USD
Culture Most of the
Australian population
comes from the
western cultural
background, majority
of which is Britain.
Rest of the
population is of
aboriginal culture.
Comprised of
thousands of distinct
and unique culture.
USA is comprised of
with large sections of
native Americans,
Latin Americans,
Africans and Asians.
Currency Free currency
Convertibility
Indian currency is
not yet fully
convertible
Free currency
Convertibility
Communication Technologically well
advanced, which
creates advantage for
Technologically
moderate. However,
a large section of the
Technologically well
advanced, which
creates advantage for

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the company to use
social media and
social network
promotion.
population that will
be the target
customers for the
company is well
equipped with
advanced technology.
the company to use
social media and
social network
promotion
Commitments High qualified
population of the can
be hired for
exploiting the profit
in the market.
A significant portion
of the population is
qualified to be hired
that can help in
exploitation of the
market.
High qualified
population of the can
be hired for
exploiting the profit
in the market.
Choice Existing competition
in the market is high.
Existing competition
in the market is
moderate.
Existing competition
in the market is high.
Control and
Coordination
International tourist
attraction is high that
ensures the future
success.
Growing trend in
tourism especially
exotic luxurious
travel increase the
chances in the
market.
A significant portion
of the nation’s GDP
is contributed by the
tourism industry that
increases the chances
of success in the
market.
Channel of
distribution
Raw materials
required to establish
is available in the
Contains enough raw
materials for
establishing the
Contains sufficient
raw materials and
workforce for

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target market.
Workforce for
providing service is
also sufficient.
hotels in the market.
Workforce required
is above the
requirement.
operating in the
market.
Capacity to pay High Moderate High
Contractual
Obligation
Needs following the
CSR and industry
rules proposed by the
Australian
productivity
commission.
Needs to follow the
ethical consideration
on the grounds of
religion, as the
religious diversity is
considerably high in
India compared to
other countries.
Market expansion in
US requires
Malmaison to follow
the guideline
formulated by US
Travel and Tourism
Advisory Board
(trade.gov 2017).
Concentration of
markets
Most of the
population is
concentrated in major
cities.
Most of the
population belongs in
rural area. However,
the target population
is concentrated in the
metro cities.
Most of the
population is
concentrated in major
cities (Doole and
Lowe 2008).
Caveat Threat of new
entrants is high in
luxury hotel services
High priced luxury
hotel rooms and
services might be too
expensive for the
target audience
Threat of new
entrants is high in
luxury hotel services

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Table No. 2: 12c Framework
Source: Author’s Creation
The above analysis makes it necessary fro the company to adopt FDI as their market
entry mode. It is to maintain the quality of products and services, which they offer to their
customers. Thought it will considerably increase the risk of failure in the country like India
with comparatively less purchasing power, the FDI entry mode will provide the company full
control over their operation.
CHAPTER 4
STP
As stated by Hollensen (2015) STP analysis tool for market analysis can provide
Malmaison in depth insight into the target market and assist the business provide the target
customers with suitable products and services. This will in turn increase the profitability of
the organisation.
Segmentation – Market segmentation categorises the target population according to the
preferences and characteristics of the product and services desired (Hollensen 2015). Various
factors are associated with the market segmentation. However, for the travel a tourism
industry, the organisations evaluate the deliverables on two primary grounds that are quality
of the rooms and services provided and the costing. Based on the factual analysis, there
Malmaison can identify three types of customers present in the intended markets that are low-
budget moderate services, medium-cost luxury services and high-cost luxury services.
Malmaison in their target markets of Australia, India and US can include moderate and high
luxurious rooms and services for their customers. Hence, the segment of the society the
company will be addressing will be the middle to high-income group with purchasing

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capacity. The age group that are likely to fall under this primary segment is the middle to old
age of people of the society.
Targeting – Targeting on the other hand is the selection of a particular population from the
given market to whom the company want to sell their products and services. Based on their
products and services planned to be delivered in the target market, the target population for
Malmaison will be the middle to upper economic group who desires to travel for leisure and
relaxation. Moreover, they also target the international travels following the same criteria.
Positioning – This last part of the analysis seeks the organisation to position their product in
the target market. Currently, Malmaion has their hotels situated in the city areas of UK.
However, they should change in concept while entering the target market extending their
reach of the exotic holiday destinations of the respective countries.
Methods to Evaluate Cost Efficiency of Sales Promotion
Shimp and Andrews (2012) proposed three stages of sales promotion that can help an
organization to achieve cost effectiveness in their promotional activities. Malmaison’s sales
promotion can be evaluated using these stages, which is comprised of pre-testing, monitoring
and post testing. Though Malmaison can implement a number of promotional techniques to
carry out their sales promotional activities, pre-testing method can provide them competitive
advantage as it utilizes focus group, customer survey, or market research. It considerably
reduces the costing of the organization. This can be considered as a pilot survey of the
country identifying the threat form its competitor and opportunities. Furthermore, this can
help the company identify the best way fro promotion by identifying the technological
availability and use of the same.
Monitoring method or concurrent method as explained by Kaser (2012) is
implemented to compare and contrast the data available on the hotels and trends of a

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particular target market with the organizational objectives. This stage is also marked as the
implementation stage where the company will be initiate tis promotional operation.
Malmaison can utilize social media promotion and social networking for their promotion in
all their target market. Moreover, the third party promotion is another important platform the
company should consider while promoting their business in the target market.
The final stage of the sales promotion that is post-testing methods examines the
outcome of the sales promotion carried out by an organization. Malmaison using this method
can compare the data related to their actual performance in the market with the budgeted
plan. This analysis will help the organization to identify the loopholes in their current sales
promotion and provide them insight for modification.
Significant Issue Affection Overall Strategy
Global economic fluctuation can result as a major issue for Malmaison in their
international market. They seek to hold the standard of their hotels and keep the pricing in all
the three proposed countries similar to their national hotels. Inflation can considerably effect
their strategy, as the tourist will likely to be considering cheaper hotels for lounging and
dining during the inflation (Wu 2016). Moreover, though a large number of tourists in
Australia and United States are likely to consider the luxury hotel service provided by
Malmaison, they might face potential challenge in India. Less number of travellers are likely
to consider the service of Malmaison. This will limit the business in India to a smaller target
population of the country. Moreover, the hotel should also consider the purchasing power of
travellers from both the host country and the visitor’s country. It is likely to vary which
requires Malmaison to select different marketing strategy for each of their interest countries
(Australian Government 2015).

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CHAPTER 5
Recommendation
As Malmaison is planning to expand their business in Australia, India and United
State, it is possible to recommend the following promotional strategy to the organisation.
Product – Malmaison should introduce new set of products and services in their international
market to attract greater number of international tourists. They should introduce semi-luxury
rooms and services along with their traditional luxury services in the Australian and US
market (Khan 2014). However, the company should consider introducing budgeted services
in their Indian market fro attracting customers. However, it might hamper their international
reputation. Hence, Malmaison should provide services only to the tourist from upper and
middle economic group in India.
Pricing – The pricing strategy of Malmaison should be reconsidered in their new
international market. It should range from high to medium from gaining competitive
advantage. The adaptation of medium pricing will help Malmaison to attract the middle
economic group of the countries and the international toursits, which will keep its sales high
in the initial years.
Place – Malmaison should consider the exotic places in the target countries in its initial stage
for gaining maximum profit. The metropolitan cities of the countries will be effective places.
Promotion – Promotion strategy best be utilised in the selected countries are social media
marketing, social network marketing, event marketing and one-to-one marketing. This way,
Malmaison can address greater section of the society as every individual is now connected
with the internet (Gordon 2012).

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Risk Assessment of Suggested Strategy
It is the process of identification, evaluation and administration of the risk that are
likely to arise while implementing the proposed strategy on a particular market. The possible
threats that might occur during implementation of the proposed strategy for Malmaison are as
follows.
Risk Occurrence Chance Potential Impact Caused
On The Proposed Strategy
Number of new entrants in
he proposed markets with
similar or greater quality
services
50% Medium
Competitors providing
similar services in cheaper
price
65% High
Global economic fluctuation 60% High
Impact from variation in
currency rate of the
international tourists
70% Low
Political and social dilemma
that can contribute in the
reduction of international
tourists in Australia, India
and United States
27% High
Table No. 3: Risk Assessment
Source: Author’s Creation

20TRAVEL AND TOURISM MANAGEMENT
CHAPTER 6
Conclusion
The developed tourism industry of Australia and United States can provide benefits to
the company as it attracts a significant number of international tourists every year. India on
the other hand is developing country, but the growth of tourism industry reflects potential
pace. Moreover, number of international tourists is also high in case of India, which makes it
a potential target market for Malmaison. The company however have to modify their
products and pricing accordingly with their target markets. For example, the high priced
products and services in the Indian market is unlikely to attract large number of customers of
the target population due to the less purchasing power. A significant number of Indian
populations will fail to afford the price range the company offers in their domestic venture.
Hence, the product pricing should range from moderate to high. Whereas, the other markets
under study can withstand the high pricing of the products and services that are provided by
the company in their domestic market. Moreover, their experienced and loyal staffs can
provide significant benefit in their expansion in the international market. The company
should also expand their business in the urban sectors of the countries they are planning to
expand, as it will attract the population from the higher income group. For example, the
businesspersons with high purchasing power can use Malmaison for the duration of their stay
in the country.

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