Marketing Strategies for Hotel Business Research Paper

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Introduction

When deciding upon marketing strategies to be used for a hotel business in order to attract new clients, a hotel must identify that which sets it apart from other competing hotels. The essence of any successful marketing campaign is the ability to differentiate oneself. Trout and Rivkin (2006) state that a company must “differentiate or die” (p. 2), meaning that if a business cannot do something to distinguish itself from the next nearest competitor it will never succeed—precisely because it has not been able to show consumers that it is offering something uniquely special. Thus, for a hotel, it is critical that it consider the things that define it and make it uniquely attractive. Whether it is setting, dining, history, environment, proximity, attractions, luxury, style, class, or some other feature, the hotel business’s first priority is to identify its strengths. If it finds that it cannot offer anything new to guests, its second priority is to find out what guests are needing or wanting that no other hotel business is offering and offer them that. This is called the “blue ocean strategy” (Kim & Mauborgne, 2005). It is based on the idea that “blue oceans denote all the industries not in existence today—the unknown market space, untainted by competition” (Kim & Mauborgne, 2004, p. 77). In other words, if a business cannot differentiate itself based on what it already has going, then it must hit upon something new to offer. A third strategy that hotel businesses can use to attract new clients is based on the idea that today travelers and tourists are part of the Digital Age where social media is the place to go for information. A hotel can use social media platforms like Twitter, Facebook, Instagram, YouTube and Pinterest to attract attention, create buzz, engage with users, and develop a following. This paper will discuss these three strategies and show how they can be used effectively by hotel businesses to attract new clients in the 21st century.

Differentiate or Die

The concept of marketing warfare is simple: a business must first know itself, then it must know the competition, and then it must know the consumer and which customers it can successfully target. In order to successfully target new clients, a hotel business must be able to offer them something new, something different, something no other hotel is offering—whether it is proximity to a nearby attraction, stellar service unparalleled by any other staff in the world, a unique dining experience, or perfect ambiance. Once it hits upon its own unique strengths, a hotel can identify a target market: this can be a niche market, a wider market, or a market it has never before targeted. When Carnival Cruise (basically a floating hotel) decided to go after a new target market of clients, it first examined what made it unique and what made it similar to its competitors. It then set about differentiating itself in small ways that clients would remember (Applegate, Kwortnik & Piccoli, 2006). This put it in line with the “Differentiate or Die” strategy: “if you can’t be first in a category, set up a new category you can be first in” (Ries & Trout, 2009, p. 17). By differentiating itself, Carnival Cruise in small ways that stuck in clients’ minds, it was able not only to win new clients but to win back old clients as well. The trick to engaging in marketing warfare is this: find a way to enter into the market in manner that will ensure victory. Do not engage in battles that will be lost. For example, if a small independent hotel wants to target new clients that typically only stay at chain hotels, it is likely not only to fail to win these clients but also to attract the negative attention of the much larger chain which could easily move to put it out of business if it wanted through any number of ways—such as increasing advertising, offering lower prices (which won’t hurt its bottom line), or even erecting another competing hotel near the independent hotel in order to drive away its business. A hotel must be smart about how it engages in marketing warfare, and if it cannot win new clients who only stay in chains, it can seek out new clients in niche markets by identifying targets open to new concepts and independent businesses.

The “Differentiate or Die” strategy can also help a company to develop the right strategic square, as Ries and Trout (1997) point out: this is a way of deciding which approach to take when entering into a market.

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Depending on what kind of hotel business one has, the right approach will be: 1) defensive, 2) offensive, 3) flanking, or 4) guerrilla. Defensive positions are adopted by dominant players in the market. So if a hotel is already commanding the market, it does not need to do anything drastic in order to attract new clients. It can simply rely on strategies like word of mouth and traditional advertising to maintain its position. It can also offer promotions and other incentives that lesser hotels might not be able to offer because of their thin margins. For a hotel that is seeking to take away market share from a dominant player, the offensive strategy is the best approach. This allows the up and coming hotel business to challenge the dominant player directly by cutting prices, offering unique promotions, or using creative marketing strategies, such as funny commercials or online techniques to drum up new business. For a lower-tier hotel business, challenging the largest shark in the market is not wise, because it is bigger and can last longer at discounted prices than the lower-tier company. So it has to use the flanking approach, which means it must chisel away at the company’s edges bit by bit, taking new clients that the main player is unlikely to notice initially. The new company that is just setting out and has no market share will have to rely on the guerilla method, which is essentially the same thing as the blue ocean strategy which will be discussed in the next section. It focuses on finding new clients that no other hotel business is focusing on and going after them.

Such is the essence of the “Differentiate or Die” strategy. A hotel must be innovative and original in order to compete, just like any other business in the market. As Schewe and Hiam (1998) put it, imagination and innovation are what allow marketers to use the other tools of marketing most effectively. The other tools, of course, include the 4 P’s—price, product, promotion and place—which are other ways in which a hotel business can certainly differentiate itself in order to obtain new clients. For example, by setting the right price to attract new clients, by offering a product or service that is unique, by offering a promotion that catches the attention of new tourists and travelers, or by advertising proximity to a great place that few have heard of. These are just a few of the ways in which a hotel can distinguish itself.

Blue Ocean Strategy

The “blue ocean strategy” was developed by Kim and Mauborgne (2005) when they were working to develop a new way for their corporation to attract new clients. The basis of this strategy is that instead of looking at what all of one’s competitors are doing and trying to do it better or slightly differently, look at what one’s competitors are not doing and see if there is way to do that and attract new business by it. It invites one to be creative and to think outside the box. A hotel business could profit substantially by employing the blue ocean strategy in this manner.

Blue ocean refers to the great wide open sea of ideas that are not being looked at or used by companies when deciding how to market themselves. In that ocean are all manner of diverse fish and species ready to be lured and caught. Instead of seeing them, though, companies within a sector are all fighting over the same groups of fish using the same tactics, lines and bait. The blue ocean strategy allows a company to forget that competition and venture out into the great unknown to find new clients. For a hotel, it means finding new clients who may not have ever thought about traveling before, or who may have never known there was a reason to go sight-seeing in that part of the world where the hotel is located. This strategy allows a hotel to be inventive and find new clients that other hotels have ignored, focus on them through tactics that would appeal to them and engage them with incentives to try out their hotel.

One way to get to know this target market in the great wide blue ocean, is to conduct surveys of the people there. A hotel could do this online, through….....

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