Marketing Strategies for Red Carnation Hotels: An International Report

This report provides a comprehensive analysis of the international marketing strategies of Red Carnation Hotels. It begins with an introduction to international marketing and the company's background, highlighting its luxury boutique hotel services across various countries. The report then delves into macro and competitive factors impacting the global hospitality industry, utilizing PESTLE analysis and Porter's Five Forces to assess the external environment. It examines the internal business environment through Porter's value chain analysis, evaluating primary and support activities to identify strengths and weaknesses. A SWOT analysis summarizes these findings, followed by an evaluation of potential target markets in China, France, Nigeria, and Thailand, using the 12 C framework. The report concludes with a discussion of entry modes and marketing mix considerations specifically for Thailand, offering recommendations for future international expansion. The report provides detailed insights into the hospitality industry, market analysis, and strategic planning.

International Marketing

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK...............................................................................................................................................1
The macro and competitive factors that impacts global hospitality industry:........................1
The impact of micro environment on Hospitality industry....................................................2
The internal business environment of Red Carnation Hotels.................................................3
SWOT of Red Carnation Hotel..............................................................................................5
Evaluation of potential target markets of China, France, Nigeria and Thailand:...................6
Mode of Entering into Thailand:............................................................................................8
Socio Cultural factors and marketing mix for Thailand:........................................................9
CONCLUSION & RECOMMENDATION..................................................................................10
REFERENCES..............................................................................................................................11
APPENDIX....................................................................................................................................12

INTRODUCTION
Marketing is a very important function for an organisation, as it assists in promoting the
products and services offered. There are many other benefits of it, such as; expansion into
international market. It is used for promoting and establishing company products and services
into national and foreign market. Basically international marketing is a extension of marketing,
where a firm has to make two or more marketing mix to meet the requirements of different
countries (Berthon and et.al., 2012). It assist a company in leveraging its assets, experience and
products image into a global market. This report is based on Red Carnation Hotels, which offers
its services into hospitality sector. It is a award winning, luxury boutique hotel which have over
23 branches in UK, USA, Switzerland, Ireland, south Africa. In this report, all the macro factor
which impacts company, market attractiveness and other aspects of expansion are briefly
explained.
Red Carnation Hotels was established in South Africa, 50 years ago by Bea toll-man and
and Stanley. It was a hospitality venture based on the idea's of couple who wanted to provide
world-class services to customers. In 1975 family shifted to United Kingdom and targeted UK
market which offered better value to business for its services. Today, the hospitality group has
many facilities across UK which are regularly awarded for their outstanding infrastructure and
services. Such as Ashford Castle, the Miles stone hotel, etc.
TASK
The macro and competitive factors that impacts global hospitality industry:
Hospitality sector is a well established industry which plays a major part in the travel and
tourism sector. There are many big brands who have good global image in the eyes of customer.
There are different types of factors which impacts the working and effectiveness of global hotel
industry at large. Mostly these are called as macro factors which are non controllable and are
external in nature. There are various types component which have to identified and analysed by
the the market entities and for doing so they need to use tool such as PESTLE.
PESTLE analysis is used by organisation to gather information about various external
factors which can directly or indirectly impact an organisation or industry productivity and
profits (Cadogan, 2012). It is important so as to prepare different types of strategies to overcome
the uncertainties of that might come up in future.
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Relying on Pestle analysis carried out on global fashion industry (see appendix, 1), the
large part of world is in political turmoil which act as a major challenge in front of business and
its operations. There are many conflicts going on the countries which were customers favourite.
This has impacted industry in a very bad manner. There are certain challenges which are present
in the global economic environment. After Brexit it is suppose to get worse for United Kingdom
economy and also the rise of Donald Trump will lead to seizure of different funds and
investment in country (Czinkota and Ronkainen, 2013). The new consumer is migrating to
digital economy which is a technological miracle for enterprises. It is a factor which assist
business by enhancing its efficiency and effectiveness. These changes are impacting social and
cultural behaviour of society. Making it more flexible and adaptive. The legal and
environmental dynamics are changing at a rapid speed as to boost total productivity of every
business industry. The recent Paris treaty is an example of environmental law which states that
every country has to reduce its carbon emission and add more to ecology as to reduce impact of
global warming. While every country is preparing different polices for achieving this task, The
United Kingdom government wants companies to put up campaigns for boosting environment.
The impact of micro environment on Hospitality industry
The porter's five forces model is the best tool to analyse micro environment [see in
appendix, 2]. it states about five factors which are necessary to understand as to know about
market competitiveness. The forecast for global power of buyer is mixed in reference to fast
hospitality (cheap and dynamic) and slow hospitality (luxurious). The former has better buyer
power while later one has low power of buyer which leads to the result of moderate buyer
power for industry. Similarly, operators in sector have access to suppliers of required products
and they can switch to different suppliers which represents lower supplier power. The
hospitality industry is described on the basis of fast and slow trend. In which former has higher
threat of new entry while later one have lower threat of new entry. The overall threat of new
entry is still moderate (Douglas and Samuel Craig, 2011). There fierce competition and rivalry
among different hospitality companies in both types of slow and fast model which leads to
higher level of threat of substitution of services. The outlook depends on the dynamic of
industry which may have impact on its overall productivity and attractiveness.
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The internal business environment of Red Carnation Hotels
After analysing external factors, hotel has to assess various internal components which
makes up the total environment inside the company. Internal analysis assist managers in hotel to
know about the strengths and weakness which exist in various functions. This allows them to fix
the issues and strengthen whole functionality of organisation. There are many methods which
exist for analysing organisation internal environment but for Red carnation hotel, porter value
chain analysis will be used. It is a most efficient and effective tool which allows managers in
understanding the margin or gap that exist in between the real capability of organisation and the
standard.
A value chain is a set of activities which are conducted by an organisation as to create
value for its customers. Basically, porter created a general purpose value chain which can be
used by companies to examine all of its activities and analyse how well they are connected with
each other (Fletcher and Crawford, 2013). Also, this assist them in understanding different types
of cost and other variables which affects the rate of profits of company. There different types of
elements which are mentioned in porter value chain that will be used in analysing internal
environment of Red Carnation Hotel:
Primary Activities:These are directly related to physical creation, sale, maintenance and
support of product and services. Inbound logistics: These are the activities which are related to receiving, storing and
allocating resources internally. Basically all the perishable goods which are received from
supplier are stored and allocated to different function in hotels. The supplier acts as a
major factor in creating value by providing good quality of goods. Operations: The activities which are related to transformation of input to output are
considered as operations. Red Carnations Hotel have a well established operation system
which consist of different departments. They are functioning with full efficiency and
creating higher level of value. Outbound logistics: The delivery of products to customers, such as; collection, storage
and distribution systems in hotels (Griffith, 2010). Service is intangible in nature but the
product provided by Red carnation is tangible. It includes, modern rooms, food, leisure
spots, and other facilities.
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 Marketing and sales: This is one of the most important activity that creates value in the
eyes of people. The hotel have to prepare campaigns which differentiates them from their
competitors and attracts more customers towards them. Red carnation hotel is well
known for providing high quality services to the people and its marketing team is one of
the reason behind it.
 Service: These are the things which adds value to the overall product offered by
company. Red carnation hotel provides high quality services to the people who choose to
stay in their hotels (Meissner, 2012). They know that it is very important to retain a
customer once he enters their doors and services is the best way to do so.
Supporting Activities: These are the activities which assist primary function of Red
carnation Hotel. Procurement: The red carnation hotel group in every region tries to find vendors who
have capacity to fulfil the needs and requirement of organisation in most efficient prices.
They want suppliers who are offering products in a very reasonable prices and match
hotel's high quality standards. Human resource management: The Red Carnation Hotel has won the best retain ship
award in 2012. it is one of the best recruiters and have one of the most effective and
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Source 1: Porter value chain, 2017

efficient workforce in world (Murphy, 2010). This is what creates value for hotel group
products and services. Technological development: The hotel management keeps on updating its library and
methods to serve customers. Also, ways to prepare food and other things are constantly
updated. Today, they have put up every single facility for the customer. Now they are not
just selling beds for night but making people feel royal.
 Infrastructure: The over all system that exist in Red carnation hotels are well prepared
and established. Systems related to accounting, legal, managerial, etc are some examples
(Paliwoda and Thomas, 2013). Also their physical infrastructure that are its hotels have
been built with a futuristic point of view.
The internal analysis provided various facts about how hotel manages itself. But to
understand its strengths, weakness, opportunities and threats, SWOT analysis is important:
SWOT of Red Carnation Hotel
It will assist management in finding out about various factors where they are strong and
weak [see appendix, 3].
 Strengths: There are certain strengths identified by internal analysis of primary and
supporting activities:
◦ Well establish brand in Hotel industry
◦ Providing higher quality services
◦ Effective and efficient workforce
◦ Standardised services in every country.
 Weaknesses: There various issues which were analysed in internal analysis:
◦ Slow adaptation of technology
◦ Slower decision making
◦ Issues in Consumer grievance handling
 Opportunities: There are various opportunities for Hotel group which it can explore:
◦ Expansion in other countries
◦ Diversifying services for targeting lower middle class and middle class.
 Threats: There are always some threats present in market:
◦ Other multinational groups
◦ Economic and political stability
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◦ Supplier threats
As mentioned above the Red carnation Hotel Group have different opportunities which it
has to explore by using its strengths and overcoming threats, and weakness.
Evaluation of potential target markets of China, France, Nigeria and Thailand:
The opportunity to expand is very important for growth in business for Red Carnation
Hotel. They have to analyse various market before making any move of expansion in any
country (Papadopoulos and Heslop, 2014). First they have to identify market by analysing its
market attractiveness by using 12 C framework [See in Appendix, 4] which states about every
single factor that exist have to be analysed in any given country:
The value chain analysis of these four countries is necessary as to understand which one
is giving maximum return [see in appendix, 3]. Country, There are four given countries, China,
France, Nigeria and Thailand. There are various factors which have to seen, such as; GDP,
income and expenditure of people, tourist attraction, etc. Concentration, It refers to
concentration of population around economic and tourist hubs of country. All four countries
differed on various factors and their population was centred on the basis of industries and tourist
attraction point. Culture/Consumer Behaviour, There was huge difference in cultural values in
all four countries. China and Thailand was mostly Buddhist and followed similar tradition while
France had a mix culture and Nigeria was a Muslim dominated country. Choices The consumer
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Source 2: 12C Framework, 2017

choice were heavily impacted by their culture and social values (Ringle, Sarstedt and Straub,
2012). All four country showed difference in which Thailand consumer as well as tourist visiting
country had the most positive one. Consumption, Thai people were positive and like to spend
money on luxurious lifestyle, also the number of tourist visiting country is on rise which makes
consumption of hospitality likely to rise. Contractual Obligations, All countries have different
types of legal laws regarding different aspect of business. France has laws which increase cost
for company while Thailand have most lenient legislation regarding hotels and human resource
which reduce cost for company and enhances profitability. Commitment, It is related to country's
administrative system. Every country have different of systems which approve and assist
business in working. In this scenario, Thailand government has evolved a system which approves
all activities of system from single window, while in other countries there are high cost related to
it. Channels, Except Nigeria, all three countries proved to have a well established infrastructure
to supply goods and services to end user. But for hotel industry, Thailand have one of the best
channel, as it have defined spots which can be used for establishing infrastructure.
Communications, France have most sophisticated and advance internet as well as
communication network but the cost are too high (Terpstra, Foley and Sarathy, 2012). On the
other hand, Thailand have better communication network than other two countries. Capacity to
pay, It refers to consumer capacity to spend. Basically if Consumers are not capable of paying
the amount for hotel services then it will be useless for them. Thai people as well as tourist spend
big amount for luxuries, the only country which was better than Thai was France. Currency The
currency value is what impacts organisation total investment in the country. If margin between
dollar (primary currency of world trade) and nations currency is higher than Red carnation will
get profited. While if margin is lower than company will have to invest more. Caveats, There are
different stipulation regarding all four markets. These can be considered as a variable which can
hamper organisation working.
As per 12 C analysis [See in Appendix, 4] the best country which can be chosen for
expansion is Thailand. As it have different additional advantages, such as; locals like to spend
more on brands and it is a big tourist attraction while serving capacity is low.
Mode of Entering into Thailand:
There are multiple modes which can be used Red Carnation hotel group for venturing in
Thailand. It has to choose a method which will let it justify its brand and create same image
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which it have in developed market such as USA, UK, South Africa. There are many ways but for
a hotel group, Strategic Alliance will be the best method (Griffith, 2010). This method will assist
company in establishing its business in Thailand while it wont have to bear high risk associated
with project.
It is a form of partnering that takes place in between two or more companies. Red
carnation hotel group needs to create a strategic alliance with a company which is already
functional into the market. They have to identify certain pro's and cons which it will have with
partnering up with that company. There certain advantages which will justify the choice of entry
method:
 It will assist company in understanding the market and concentrate its activities as per
requirements.
 It will gain knowledge from partner and gain further competence
 It will be able to identify all resources and ways to utilise them in optimum level.
 The invested cost will be minimum
 The speed to market will be improved by strategic alliance
 It will also facilitate in penetrating market.
These are some benefits which Red Carnation will have from using the method of
strategic alliance while entering into Thailand. They have to be careful while preparing contract
and keep crucial frights with themselves for better future growth. Later in stage they can acquire
the shares of strategic Alliance and gain total control.
Socio Cultural factors and marketing mix for Thailand:
There are different socio cultural factors that are in power in country. These factors have
impact over buying behaviour of consumers. That is why it is important for them to analyse these
factors. The analysis of these factors is based on four factors: Hierarchy: The Thai people follow hierarchy in their common living. Elder in house take
all decision regarding purchases and expenditure. Buddhist beliefs and practices: Country majority belongs to Buddhist religion and they
are highly influenced (Fletcher and Crawford, 2013). All of their purchases and cultural
activities are as per the Buddhist holy documents and books. The rural area which attracts
tourist is much more conservative than urban people.
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 Collectivism: Thai people believe in collectivism that is why they like to work in teams.
They still have culture of joint family which boost the feeling of collectivism in them.
 Thai Characteristics: The basic characteristics of people are as follows:
◦ Simple living yet high expenditure
◦ Preference to brands rather than local products
◦ Weekends are preferred days for shopping and vacation.
◦ Per capita income in high
◦ Follows Buddhist religion and all its beliefs.
These socio cultural factors have huge impact on the marketing mix of Red Carnation
Hotel. As they have to change their marketing mix as per requirements of Thai market.
Marketing mix of company covers Product, Thai people like to spend if services are of higher
quality. So package can be made as per the different economic class (Zhou, Wu, and Barnes,
2012). The main product will be Staying in Luxurious Hotel. Price, It has to be done carefully.
Price of packages has to be decided as per different economic factors operational in company.
Place, The choice of place needs to be near capital (Bangkok) and tourist destination such as
Phuket. Promotion, The marketing has been done in a way which not only influences local
people but also the tourist. Company can use search engine optimisation so that its name come
up first when ever any one searches for hotel. Also they can use hoardings, television and social
media for large coverage.
The marketing mix will be developed after analysing all the risk factors which exist in
micro and macro environment. The company need to keep on assessing and analysing the
elements which can hamper its productivity.
This is a marketing mix for the company which will be expanding into Thailand with the
help of strategic alliance. It has to make all necessary arrangements before it pushes for
expansion. The marketing mix has to match with strengths and weakness of company so that it
can grab all the available opportunities and face threats. The Thai market has many opportunities
which has to be exploited by the company by using strategic planning and implementation of
marketing mix.
CONCLUSION & RECOMMENDATION
Red Carnation Hotel group is one of the top ten hospitality provider in the whole world.
They are operating in more than 23 locations and wants to expand as this is the only opportunity
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