Marketing Principles Report: Ritz-Carlton Case Study Analysis

This report provides a comprehensive analysis of Ritz-Carlton's marketing principles, focusing on its strategies within the luxury hotel industry. It examines various elements of the marketing process, including goals, objectives, marketing mix, and situational analysis. The report delves into both micro and macro environmental factors influencing Ritz-Carlton's marketing decisions, such as employees, shareholders, customers, political, economic, social, and technological factors. It explores market segmentation strategies, including geographic, demographic, psychographic, and behavioralistic approaches, particularly in relation to the introduction of new services like body massage and spa. The report further discusses targeting strategies, competitive advantages like cost and product differentiation, and positioning strategies, emphasizing the importance of brand image and consumer perception. The report also analyzes buyer behavior and the influence of lifestyle on service selection. This analysis offers valuable insights into Ritz-Carlton's marketing practices and their impact on the company's success.

MARKETING
PRINCIPLES

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 ...............................................................................................................................................1
1.2................................................................................................................................................2
2.1 ...............................................................................................................................................2
2.2 ...............................................................................................................................................4
2.3 ...............................................................................................................................................4
2.5 ...............................................................................................................................................5
2.4 ...............................................................................................................................................5
3.1................................................................................................................................................6
3.2 ...............................................................................................................................................6
3.3 ...............................................................................................................................................7
3.4................................................................................................................................................7
3.5 ...............................................................................................................................................8
TASK 2............................................................................................................................................8
4.1 ...............................................................................................................................................8
4.2 ...............................................................................................................................................9
4.3 ...............................................................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Marketing principles is considered as an idea that forms on the basis of different product
promotional strategies by the business organization. Further, marketing principles is also defined
a process of communicating value of products and services to the customers along with proper
quality and brand which will lead to selling product and with respect to it, organizations will get
a competitive advantage over their competitors (Krafft and et.al., 2007). In this context, the
organization undertaken for the present study is Ritz-Carlton which is a leading hospitality
corporation in the luxury hotel chain. The success of hotel can be identified as the cited firm is
operating almost 87 luxury hotels and resorts in 29 different countries and the mentioned
hospitality is the ancillary of the Marriott International.
In the context of marketing principles, this report will focus on evaluating different
elements of marketing process. Further, this report will also showcase the macro and micro
environmental factors which generally influence the marketing decisions of the mentioned
organization.
TASK 1
1.1
There are various types of elements which Ritz-Carlton have to taken into consideration
and some of them has been discussed as below: Goals and objectives: Mentioned company has to prepare their marketing objectives for
gaining higher profits and revenue. Further, goals and objectives of company are quite
different from their competitors as hospitality is focusing on giving the best of the
services to their large customer base in order to develop healthy brand image in UK as
well as in other countries (Ferrell and Hartline, 2012). Marketing Mix: Organizations essential element for their marketing strategy is the
marketing mix and Ritz-Carlton need to set the product, price, place, promotion elements
by taking care of the individuals income level and also the demands that what they are in
need of. Situational analysis:Cited hospitality firm have to adopt important strategic tools for
giving tough competition to their major competitors and also to get competitive
advantage over the rival firms. For fulfilling this, Ritz-Carlton can conduct SWOT,
1

PESTLE, Porter Five Forces, Ansoff Matrix, etc. With the help of this, cited firm can
judge their efficiency and effectiveness.
 Marketing segmentation: Cited firm is producing effective services to their clients by
giving them healthy food with effective room services. Moreover, cited firm is opting
different segmentation in order to attract the business class travelers and leisure travelers.
1.2
Marketing orientation is a concept which is generally designed by the business venture to
satisfy the needs, desires and basic requirements of clients (Belohlavek, 2008). Moreover, Ritz-
Carlton have to provide quality of service at reasonable price which will help them to develop
large customer base for the hospitality venture. Further, cited firm can focus on product oriented
or market oriented approach in order to increase their revenue and productivity. Moreover, cost
and benefits of the cited firm has been explained below:
Cost
In order to attract customers towards the hospitality firm, Ritz-Carlton generally focuses
on giving different discounts and seasonal offers. Further, in order to promote this, cited firm
spends lot on advertisement in order to increase the sale of the services given to the clients.
Further, cited hospitality has healthy trust of their customers from around the globe because and
this is the only reason why cited company spends a lot of money in the market research.
Benefit
By spending higher cost on both advertisements and on promotional activities, Ritz-
Carlton gets different benefits as mentioned company is able to win the hearts of large customer
base (Leonidou, Katsikeas and Morgan, 2013). Moreover, once developed customer will be loyal
towards the organization and they will approach towards the hospitality services constantly. In
this context, mentioned hospitality have to satisfy the needs of the clients in an effectual as well
as healthy manner. Further, by taking efficient feedback from the clients, company will be able
to make sudden changes as per their requirements and it will be considered as a pure benefit for
the cited business venture.
2.1
Micro environmental factors those factors which are connected with Ritz-Carlton and can
significantly impact the organization performance.
2

 Employees- Employees of Ritz-Carlton are multi skilled and talented and they play a
important role in the success of business enterprise. Further, mentioned company is
having strength of almost 38000 employees who are giving their productive services
around the globe.
 Shareholders- As mentioned company is the subsidiary of Marriott International,
organization is focusing on increasing their market share along with the share price.
Further, Ritz-Carlton is planning to set new ventures in order to increase their hotels and
resorts tally and they are majorly focusing on the metropolitan cities of the world
(Gunsel, 2012). Further, Marriott international reward their shareholders with awesome
dividends on the capital invested capital by the investors.
 Customers- Clients behavior and perception towards the Ritz-Carlton services plays a
crucial role as hospitality cannot bound them to use their services. Consumers are only
influenced if mentioned organization has a strong marketing technique to sell their
services.
On the contrary, macro environmental factors are those factors which generally impact
the performance of hospitality from different outside sources. These factors has been discussed
below:
 Political: Political factor is considered as a policy of government which Zara has to
follow in order to perform their activities smoothly within the country. Further, political
factor which majorly affects the business of the cited firm is recession as it reduces the
spending capacity of large individuals (Armelini and Villanueva, 2011). This generally
impacts the revenue and growth of the cited venture.
 Economic: Economic factors include change in the taxation rate, interest rate, inflation
rate and also in the stock exchange rates. Moreover, these economic factors have
potential to create severe problem for Ritz-Carlton in coming time period. Further, the
price of rooms and services also varies from country to country.
 Social- The desire and needs of customers keeps on changing as they need the best from
the hospitality venture. In order to meet this, cited firm have to think of new and
innovative things apart from the room services in order to attract the minds of their loyal
customers.
3

 Technological- Technology is upgrading on continuous basis as bar coding, computer
based entry and online bookings are the latest improvements in the hospitality sector
(Henley, Raffin and Caemmerer, 2011). Further, modern IT equipment can lower the cost
for organization.
2.2
For market segmentation of services, Ritz-Carlton has to produce their services as per the
to needs and demands of their customers. Further, this segmentation helps business venture to
treat the customers in an equivalent way. Further, hospitality can bisect divide their services on
the basis of following segmentation criteria: Geographic- On the basis of region, population, size of metropolitan area, etc. Demographic- Demographic segmentation will consist of age, gender, income level,
occupation, social class, ethnicity, etc. Psychographic- This segment groups the customers as per their behavior, interest,
attitude and also with their opinion (Parker and et.al., 2011).
 Behavioralistic- It is based on consumer behavior towards the service as it can be the user
status, occasions, readiness of individuals to pay for the service, etc.
Further, Ritz-Carlton is introducing new service as body massage and spa for their
customers. In order to increase the demand of mentioned service, Marketing manager will
majorly focus on two segmentation namely demographic and psychographic segmentation.
Being a recognized hospitality organization in UK, many customers will be attracted towards the
organization’s services and by giving them discount offers in the initial stages, Ritz-Carlton will
be able to achieve the hearts of their loyal customers.
2.3
By completing the market segmentation criteria, Ritz-Carlton can centralize on adopting
an appropriate targeting strategy for their new services in order to give stiff competition to their
major competitors in order to have a competitive advantage in the UK market (Belohlavek,
2008). Further, there are different types of targeting strategies and few has been discussed under:
 Concentrated strategy: Concentrated strategy is a strategy which emphasis on scheming
the promotional message which will show the advantage of a product for a particular
market segment.
4

 Differentiated strategy: It is a type of strategy where business organization focuses on
two or more market segments by preparing appropriate market mix for different market
segments.
 Undifferentiated strategy: Undifferentiated strategy is the one where business venture
displace a single promotional message to all the potential consumers (Deshpande and
Rundle-Thiele, 2011). Moreover, this strategy is suitable only when a hospitality having
few competitors in the market.
Further, for promoting the new service of body massage and spa, mentioned hospitality
can implement differentiated strategy as Ritz-Carlton has to advertise different promotional
messages for both demographic and psychographic segmentation.
2.5
Positioning is treated as a developing services along with the brand image of organization
in the eyes of consumers. Positioning process also involves changing the perception of
consumers regarding the experience they had after using the Ritz-Carlton new services. Further,
positioning of services on the basis of different market segmentation helps organization to
achieve their goals and objectives (Glanz, Bader and Iyer, 2012). Moreover, by defining the
marketing mix and promotional activities to their customers it can generally increase the sales
and revenue for the cited venture.
Furthermore, Ritz-Carlton should make a positioning in the minds all classes of people.
Whether it would be on the basis of their occupation and earning or as per their interests and
attitudes, a reputation in terms of brand image regarding to that service should be enhanced.
Further, mentioned firm’s motto is to attract the high business class as well as middle level
consumers for increasing more of the sale and productivity. In the context of positioning,
aforesaid company can implement price positioning strategy Ritz-Carlton can set price of their
new services by considering the approach of customers towards the service (Olimpia, 2011).
2.4
Clients along with customers in general use the services according to their needs and
demands. In this context, Ritz-Carlton can face buyer behavior towards their new service in UK
because clients and consumers having their perception to choose the mentioned service and
organization cannot bound them to choose their services only. Moreover, for accelerating the
5

sale and productivity of body massage and spa; Ritz-Carlton can use effective advertisement and
sales promotion in order to attract the minds of individuals. In context to this, Organization may
choose high income level and business class people who focuses on getting better services and
these people are not that price sensitive as compared with that of the normal middle level
individuals (Dibb and Carrigan, 2013).
Moreover, if the service given by Ritz-Carlton give individuals proper comfort and
satisfaction, then these individuals will approach towards the hospitality constantly. Further, it
totally depends on the mindset of the individuals whether he/she is in need of that service or not.
Along with it, lifestyle of individuals depends upon the service they are selecting. For instance, If
people having huge work load and long traveling sessions than spa and massage service will give
them a proper comfort, relaxation and pleasure.
3.1
Competitive advantage is treated as something new feature about the service which
makes it different from all the other services of the major competitors. Further, hospitality
achieves competitive advantage when they develop a brand loyalty and a successful image in the
eyes of customers (Ruckman, Saraf and Sambamurthy, 2015). There are few competitive
advantage which mentioned company can have: Cost competitive advantage- This advantage takes place when Ritz-Carlton use their
talented workforce for giving this fruitful services to the customers at a very reasonable
and affordable price.
 Product differentiation- Product differentiation has its own significance on cited
organization as a particular service might get differentiated from their competitor’s
product. Further, as the price of the service is decided as per the goodwill of the firm,
individuals who have low income cannot choose that product even if he/she wants to use.
Some hospitality even use offshore methods for keeping their cost of production at
minimum level.
3.2
Distribution channel will play a significant role for Ritz-Carlton for giving more
convenience to the consumers. Ritz-Carlton will focus on providing this spa and body massage
service within the hospitality only (Jackson and Sparks, 2005). Further, cited firm can also
6

increase their market share by promoting this service to online and massage people can go to the
clients place for giving the productive service. Moreover, the main purpose of distribution
channel is to keep the distribution cost as low as possible. In this context, for increasing the
demand of their service, cited firm can focus on: Intensive distribution: This distribution strategy will focus on making maximum
availability of services as through online booking of spa service so that customers get the
best of the advantage with the minimum cost.
 Selective distribution: Selective distribution focuses on creating high market sales by
making the service of Ritz-Carlton available in the hospitality premises only.
Nowadays, in today's era direct distribution channel plays an important role. On the
other hand, in case of online booking of service, the service is directly provided to customer
without including a particular mediator who is of office staff only (Golding and Peattie, 2005).
As per the standard of service is designed, this is more suitable to luxury class people as
compared with the leisure ones.
3.3
Price for the massage and spa service need to be set as per the conditions prevailing in the
market. Mentioned company is focusing on increasing more of the sale by keeping the price of
the services as low as possible so that the cited firm will be able to develop loyal customers at an
early time period only. Further, some pricing strategy which can be opted by the cited firm are
discussed below: Competitive pricing: Prices are set for body massage and spa by considering the needs
and demand of customers. Moreover, Ritz-Carlton perpetually checks the price of their
major competitors’ services namely four Seasons Hotels, Starwood Hotels and Resorts
and Hyatt.
 Premium pricing: Ritz-Carlton is focusing on Upper class and urban business executives
in providing the services. As cited firm is a popular brand in UK, corporate has loyal
customers who comes to stay from whole around the globe which generally increases the
demand and brand image for the hospitality (Armstrong and et.al.,2014).
7

3.4
Promotional activities for Ritz-Carlton play a crucial role for achieving the marketing
objectives as promoting the service is considered as an important element of marketing mix. This
promotional mix helps cited hospitality to promote their brand and helps in making effective
goodwill. Promotional measures which are adopted by the cited organization are: Advertisement- Advertising on TV is a common practice which is followed by each and
every organization. Advertisement generally shows the pricing and place of the service
where individuals will be getting. Further, service need to be easy in reach of individuals.
 Online promotion: Online promotion is the new and most effective means of promotion
within competitive market which usually increase the sale of hospitality industry. Online
promotion can be done by the cited firm through different tools like Add words, Search
engine mechanism, Social media promotion, etc (Lefebvre, 2011).
3.5
Marketing mix is performed after distinguishing the marketing strategy. In the marketing
mix, here are four major P's which are Product, Price, Place and Promotion. But in respect of it,
researcher have given the 7P's model where 3 P's are in addition. These are people, process and
physical evidence. People: Ritz- Carlton give more emphasis to their human resource which are dependent
for each and every activity in the organization. Employees are the one who increase the
sale and productivity of cited company as they provide best of the service to increase the
large customer base. Process: Managing quality and also the cost of service is one of the crucial requirements
of cited organization. Services provided by Ritz-Carlton is under the presence of
customer (Jobber and Ellis-Chadwick, 2012). Therefore, organization should judge that
what service need to give to him for what he is paying for.
 Physical Evidence- It is the evidence which customer usually gets from the organization
after using up the services. It is treated as a proof. Same instance rise when customers
gets membership of any organizations.
8

TASK 2
4.1
The marketing mix for two different segmentation is discussed henceforth.
AXIS Demographic Psychographic
Product Product is designed to satisfy the needs.
After having a proper research, Ritz-
Carlton have started this service
Competitive services range to
develop high market sales within
the market
Price Price shall be genuine as it would be
easily used by all age levels
Price should be decided on the
basis of usage rate of individuals
Place Within the premises of the hospitality
itself or either through online visiting
to the corporate official website
Intensive distribution strategy
through online sales and making
service available on individual
requirement
Promotion Advertisement on TV radio,
newspaper, leaflets etc. is the basic
source of Promotion.
Aggressive promotions will be
adopted to fight out tough market
competition
4.2
Marketing services to business is a very different concept from marketing services to
consumers. By selling a product or service to individual , emotional factor comes into play and
hospitality have to bargain in order to make them loyal customers. On the other hand, when
service is provided to business then it is more task oriented (Principles of Marketing. 2015).
Ritz-Carlton should build a buyer-seller relationship with the help of long complex cycle
whereas for the business it depends on brand loyalty of the service. Further, for business level
Ritz-Carlton should provide short distributive channels which reflects the fundamentals of
marketing mix.
4.3
 International market means transfer of goods and services from one country to another
whereas in domestic market transfer of goods and services takes place within the country.
9

 Tariff and non- tariff barriers are imposed on international market whereas domestic
market not having any.
 Letter of credit is used as a common mode in international market for payment whereas
DD, cash, cheques are used in the domestic market (Manktelow, 2015).
 Documentation is complex in international market whereas not many documents are
needed in the domestic market.
CONCLUSION
From the above report it is clearly evident that present report is based on effective insight
about marketing principles that help the business units in making effective decision for growth
and development of companies. Further, these measures help the firms in enhancing market sales
by creating effective market demand and through effective service promotion.
10