International Marketing Report: Generator Hostels Expansion Plan

This report provides an in-depth analysis of Generator Hostels' international marketing strategies. It begins with an introduction to international marketing and its significance, followed by an examination of Generator Hostels' expansion plan based on the Vernon model. The report explores the model's application, advantages, and disadvantages in the context of the hostel's services. It then identifies the hostel's target market, primarily millennials, and discusses the factors contributing to its success, including design, services, and location. The report also analyzes Generator Hostels' competitive advantages, comparing them to rivals like Celtic group hostels. It highlights areas for improvement, such as expanding the target market, improving booking processes, and enhancing marketing strategies. The report concludes with recommendations for Generator Hostels to strengthen its position in the international market, focusing on market segmentation, booking flexibility, and marketing innovation.

INTERNATIONAL
MARKETING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
TASK 2............................................................................................................................................2
TASK 3............................................................................................................................................3
TASK 4............................................................................................................................................3
REFERENCES................................................................................................................................5

INTRODUCTION
International marketing refers to a concept in which companies use to extend their
businesses beyond the international boundaries. Through the international marketing
organisations intend to make more profits with operations in both domestic and international
market. The present report on International marketing focuses on the same element that
emphasise the importance of marketing in international market (Cavusgil and Cavusgil,
2012).Further, report is based on Generator Hostels who wishes to expand its services in
international market. Moreover, the study of this report also emphasise on applying models of
expansion along with critical study of competitors.
TASK 1
The company has applied a model for expansion purpose which is based on Vernon
model. This model is in much practice in modern era of globalisation which shows the practice
of expanding services in market with a product that are new for customers. The model was given
by Raymond Vernon who explained the patterns of internationalisation for organisations (Clarke,
Tamaschke and Liesch,, 2013). For this model he explained the life cycle of products which
refers to different stages that occur in the life of a product. This model can be best utilised by
Generator hostels which is a service organisation and provides staying facilities to customers
with lots of services. The company can make its expansion with a launch of new luxury suite
apartment. The model says that every product passes from certain stages which is introduction,
growth and maturity stages. The Raymond Vernon has published the model that mainly describes
the internationalization patterns of the cited organization.
The International Product Life Cycle Model (IPLC) mainly consists of the three different
stages the first phase is of new product in which the cited hotel launches their new services for
targeting the luxurious customers and travellers towards their home services (Covin and Miller,
2014). In the present environment the customers are willing to purchase the luxurious and deluxe
hostel services to the traveller so that they may have leisure and pleasant stay within the
organization. Another phase of the model is maturing services of the cited organization in which
the company export their services to the developed market that results in lowering down the
labour cost. Exporting the services in the different nation supports the cited organization in
enhancing their market share and profitability ratio (Fletcher, Harris and Richey, 2013). The last
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stage in the Vernon model is standardized products that is the services provided by the hostel
must add new services that support the visitors and travellers in gaining leisure and pleasant
experience related with their hostel services.
From the above model of internationalization there are certain advantages and
disadvantages. The key advantage of Internationalization model is that it support the Generators
hostel in enhancing the planning process so that they can easily meet the demand and
requirement of the visitors and clients (Pros & Cons of a Product Life Cycle, 2016). On the other
hand, disadvantage of the internationalization model is that the model is not always reliable in
nature that depicts the accurate lifespan of the services provided by the cited organization.
TASK 2
The stays in the Generator hostels are very comfortable as it provides the facilities that are
luxurious. One can have the feeling of staying at luxurious hotel rooms of any branded hotel.
The main target market of the mentioned hostel are millennials, which shows the generation
Y. The generation Y is considered to be the group of persons who have born from year
1984-2000 (Huang and et.al., 2014.). So, in simple terms the said company mainly targets
the teenagers and adults. The reason behind this is very clear and simple. The individuals of
this age are generally students or some bachelors who use to go office and travel frequently.
Therefore these people prefer hostels to live where they can stay at nominal rates. Besides
this, they have less incomes which compels them to stay at places that are relatively cheaper.
The company’s main reason behind success is the same as mentioned above. It is
focussing on latest global trends that is helpful in drawing attention of millennial groups
(Hutt and Speh, 2012). The mentioned business has taken many steps that has contributed in
achieving set objectives and making more profits. The design and servicers delivered by the
hostel is very superior. Apart from that, the food and drinks offered by company gives the
taste of famous dishes of the locality. The location of all the branches of quoted hostel is at
centre of city. This makes the accessibility of firm easy for its target market. Further, it has
large choices for customers to offer like normal rooms to special private and premium rooms
with all general to posh facilities (Kerzner, 2013). The main vision of company is to give
experience full of inspiration, fun and uniqueness for guests. The cited company has also
introduced its retail store where exclusive products range is found. Thus, the hostel has
brought a revolution in hospitality industry.
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Above stated features and innovative strategies applied by hostel clearly shows that is is
moving in right direction by focussing on demographic target market. It gives special
reference to the age group of 16 to 30 years. Here it is recommendable for firm to enhance
its target market which can be based on other factors like income and behavioural factors
(Lauring and Selmer, 2012). This will include people with income of middle to high level
and individuals who have standard lifestyle. The marketing for this expansion strategy can
be done through social networking sites and magazines.
TASK 3
The competitive advantage for a firm refers to uniqueness a company offers in terms of
either product’s services or price factor. The Generator hostel is also getting tough
competition from its rival firms like Celtic group hostels and Barnacles hostel. The most
recent competitive advantage which currently firm enjoys is its eclectic interior designing
which helps in attracting a large number of customers (Mainela, Puhakka and Servais,
2014). The company has plans to expand its service in Miami till the end of next year. The
company has more number of facilities and unique designing which keeps the aforesaid
organisation at differentiated position. The competitor of said hostel is Celtic group of
Hostel which use to attract its customers through various offers for group tours. Besides this,
it also gives special offers on meals, tour packages and for visitor attraction sites. On other
hand, the Generator hostel offer various range of facilities by providing comfortable and
spacious rooms with high quality services. However it lacks in some areas which makes it
behind in the race against its competitors (Okazaki and Taylor, 2013). The revenue
generated by firm is less than Celtic group of hostel which is just $1 million against $15.7
million revenue generated by Celtic group. This shows that Generator hostel still needs to
make innovations and build strong strategies of marketing to get success in international
market.
TASK 4
From the above discussion it is apparent that Generator Hostels should put its focus on three
key areas so that it can have more development. The hostel only concentrates on millennials
or certain age group as its target which makes the market of company very limited (Peck and
et.al., 2013). So company should plan and research the market so that it can make strategies
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to divide its target market group into more sections. Preferable sections from which it can
have more number of potential customers are segmenting customers on the basis of income
and lifestyles. Another area where it has scope for improvement is, the company only offers
its confirmed booking service on having credit or debit card. This makes the customers to be
in limited numbers as the teenagers or person less than 18 years mostly don’t have credit
cards (Vahlne and Johanson, 2013). So in such case, an unbalanced approach gets originated
where on one side it mainly targets teenagers and on other hand, it does not provide booking
facility if credit or debit card id not available. Another major concern is company has more
concentration on interior designing of building rather than its services. While the
competitors of mentioned organisation use to concentrate more towards marketing strategies
that offer attractive schemes. Therefore, Generator hostel should also enhance its vision and
develop strategies of marketing to flourish in international market (Villar, Alegre and Pla-
Barber, 2014).
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REFERENCES
Journals and Books
Cavusgil, S.T. and Cavusgil, E., 2012. Reflections on international marketing: destructive
regeneration and multinational firms. Journal of the Academy of Marketing Science. 40(2).
pp.202-217.
Clarke, J.E., Tamaschke, R. and Liesch, P.W., 2013. International experience in international
business research: A conceptualization and exploration of key themes. International
Journal of Management Reviews. 15(3). pp.265-279.
Covin, J.G. and Miller, D., 2014. International entrepreneurial orientation: conceptual
considerations, research themes, measurement issues, and future research directions.
Entrepreneurship Theory and Practice. 38(1). pp.11-44.
Fletcher, M., Harris, S. and Richey, R.G., 2013. Internationalization knowledge: What, why,
where, and when?. Journal of International Marketing. 21(3). pp.47-71.
Huang, C.C. and et.al., 2014. The relationship among corporate social responsibility, service
quality, corporate image and purchase intention. International Journal of Organizational
Innovation. 6(3). pp.68.
Hutt, M. and Speh, T., 2012. Business marketing management: B2B. Cengage Learning.
Kerzner, H.R., 2013. Project management: a systems approach to planning, scheduling, and
controlling. John Wiley & Sons.
Lauring, J. and Selmer, J., 2012. International language management and diversity climate in
multicultural organizations. International Business Review. 21(2). pp.156-166.
Mainela, T., Puhakka, V. and Servais, P., 2014. The concept of international opportunity in
international entrepreneurship: a review and a research agenda. International journal of
management reviews. 16(1). pp.105-129.
Okazaki, S. and Taylor, C.R., 2013. Social media and international advertising: theoretical
challenges and future directions. International marketing review. 30(1). pp.56-71.
Peck, H. and et.al., 2013. Relationship marketing. Taylor & Francis.
Vahlne, J.E. and Johanson, J., 2013. The uppsala model on evolution of the multinational
business enterprise-from internalization to coordination of networks. International
Marketing Review. 30(3). pp.189-210.
Villar, C., Alegre, J. and Pla-Barber, J., 2014. Exploring the role of knowledge management
practices on exports: A dynamic capabilities view. International Business Review. 23(1).
pp.38-44.
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Online
Pros & Cons of a Product Life Cycle. 2016. [Online]. Available through:
<http://smallbusiness.chron.com/pros-cons-product-life-cycle-11801.html>. [Accessed on 15th
November 2016].