Malmaison: Marketing Plan for International Market Expansion

This report provides a comprehensive analysis of Malmaison, a prominent UK-based travel and tourism organization, focusing on its management, business environment, and marketing activities. The report begins with an executive summary and introduction, followed by a detailed situation analysis, including macro and micro environmental assessments using PESTEL and McKinsey 7S frameworks, along with a SWOT analysis to identify strengths, weaknesses, opportunities, and threats. The study then examines Malmaison's international market practices, specifically targeting Australia, India, and the United States. It delves into the STP (Segmentation, Targeting, Positioning) strategy, methods for evaluating cost efficiency in sales promotion, and addresses significant issues affecting the overall strategy. The report concludes with recommendations, a risk assessment of the suggested strategy, and a conclusion summarizing the key findings and insights. References are included to support the analysis.

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

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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

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References................................................................................................................................21

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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