1. Introduction to hospitality marketing
“The American Marketing Association (AMA) sees marketing as the activity, set of
institutions, and processes for creating, communicating, delivering and exchanging
offerings that have value for customers, clients and partners and the society at large.”
(Nwokorie, 2010) Hotels are an integral part of the hospitality industry; the hospitality
industry constitutes of restaurants, recreation, tourism and accommodation sectors. The
entry of corporate giants in hospitality sector has certainly transformed hospitality
industry. This has given the sector major thrust to operate in a competitive environment,
where aggressive marketing skills are essential to win customers. In hospitality industry
the marketing gives heed to the process of how a restaurant, hotel, travel business, or a
resort can sell itself in a market place. In a nut shell, selling and marketing are integral
part of marketing mix to enhance hospitality business in the near future.
Task 1: Marketing concept, customer need and satisfaction, service quality and
staying competitive. Explain how Mandarin Oriental hotel applies marketing
concept. What are they doing and how are they doing.
Many hotels have recently incorporated marketing concept as their business philosophy.
Marketing concept commences with a distinct market, with significance to the customers
needs and merges all the marketing activities that affect the customers. Marketing
concept facilitates in preparation for the future success of the hotel. Therefore it meets the
goals by creating customer relationship based on customer value and satisfaction.
The core concept of Marketing is to promote consumer needs in a typical professional
sense. Needs and wants of the guests have to be addressed in combination of tangible
services, information or experiential product components. The mantra of “Customer is
King” has to be imbibed in core concept of Marketing in order to enhance customer
retention and attain deliverables. For instance, Mandarin Oriental Hotel has identified
the needs of guests and this they have depicted on every hotel page, side by side offered
guests a number of services including online reservation provided by Mandarin Oriental
Hotel. The hotel uses latest technologies such as podcasts and vodcasts via internet to
promote and market their product and services. The hotel is providing a platform to
encourage the “Y” generation to use the Internet to book and enquire about the hotel,
thus providing them with not only convenience but up-dated and accurate information
about their hotels.
The vision and mission of Mandarin Oriental Hotel Singapore is: “Delighting its guests
by providing service that is gracious and sincere, engrained in values of the oriental
market”. The oriental influence can be seen in the guest rooms which are furnished in a
creative manner depicting hand craft wood interior, exquisite silk brocades and
authentic Cantonese cuisine served with inventive twist at cherry garden restaurant.
Mandarin Oriental Hotel fulfills the needs and wants of its guests in respect to business
2. travelers. Some of the facilities it offers to the business travelers is the rooms with work
area, 24/7 business centre equipped with secretarial services, internet , facsimile
transmission and courier services, express check- in and check-out ,high-speed wired
and wireless internet access throughout the hotel.
(Dickinson, 2004) explains that the “Accommodations, Technology and Service will
merge to create an experience for the guest that is uniquely relevant to their wants and
Customer satisfaction and need are the two main pillars of Hospitality marketing, which
has to work in tandem with each other. Customer satisfaction is both goal and a
marketing tool. If marketers meet the expectations of the guests then the guests are
satisfied. If the overall performance exceeds the expectations consequently guests will
be delighted. According to (Bowie, 2004)”Hotels cannot offer 100 percent absolute
customer guarantees but they can provide implicit service guarantees”. Delighting guest
every time by going extra mile should be the key to building strong customer
relationship, bonding and satisfaction. Online reviews of the guests regarding the
Mandarin Oriental on travel advisor website are satisfactory.
Parasuraman et al. (1985) suggests that “customers evaluate service quality across five
dimensions: reliability, empathy, tangibles, responsiveness and assurance”. A meal that
is elegantly prepared but poorly served to the guest would be low on service
quality. Mandarin Oriental Hotel in Singapore works a lot on their service performance
indicators this is through guest’s surveys, suggestions, and feedback forms. For what
they have done, the Mandarin Oriental has received numerous awards and accolades for
providing outstanding service and recognition.
Reasons to stay competitive in hotel industry
According to (Bob, 2004) “Market place is increasingly characterized by uncertainly
those who think broadly and act decisively will hold competitive advantage.” The
success of the hospitality does not begin with the product but in competitive market it
must be priced right and conveniently placed for the guests. The primary reason for
hotels to be competitive is because they operate within the global hotel industry which is
highly competitive and failure to compete effectively in terms of quality of product,
levels of service or price can have an unfavorable consequence on earnings. Major
pressure from competitors may lead to reduced margin. Hotels should reinforce new
marketing strategies to promote its products and services. Achieving competitive
advantage strengthens the position in business for hotels. Alluring customers from the
competitors is the game so that to acquire maximum benefit from the market place.
3. SWOT Analysis
SWOT Analysis is a business tool by which we evaluate the Mandarin Oriental
Hotel’s strength, weaknesses, opportunities, and threats.
Mandarin Oriental Hotel is recognized widely as one of the best luxury hotel in
The hotel is located near to central business district of Singapore and has easy access
to the all major business offices and tourist destination.
The hotel has excellent strategies to attract guests. It will be the first and only hotel in
Singapore to feature Ruinart R De Ruinart Brut NV as house Champagne.
Mandarin Oriental Hotel group is well renowned group in Asia and is expanding its
operations in America and Europe.
Hotel has to face severe competition from the others established hotels such as
Marina bay sands, Pan pacific hotel ,Swiss hotel and many others.
The hotel does not promote its products and services proficiently like its competitors.
During my visit to the hotel I observed that front office personnel lacked intra-
personal traits, which should be a trademark for any hotel.
Expressing concern for environmental issues has become an important part of hotel
industry. Apparently Mandarin Oriental does not have environmental friendly
The open sky policy has led to increase in travel activity. This has led to maximum
tourists coming to Singapore.
Growth of internet provides hotel an opportunity to promote its products.
The upcoming high speed rail link from KL to Singapore can be a good opportunity
for the hotel.
There are similar categories of hotels near to Mandarin Oriental Hotel Singapore.
The Challenge posed by un-flavored trends such as economic downturn will affect the
The business travel agents are contacting business travelers by their own by using
advanced intranet system so it is affecting the business travelers loyalty to hotels.
Certain events, such as acts of terrorism outbreak of contagious diseases and tsunami
can have a severe impact on the demand from all customer segments in the affected
4. After Affects of Global Economic Crises
In the face of the global recession, the Singapore hotel industry delivered somber
numbers, “REVPAR (Revenue Per Available Room) fell by 35 per cent during the
2008/09 recession compared to 30 per cent during the 1997” (Tan and hui, 2009) The
Mandarin Oriental Hotel too faced the heat of global economic turmoil By the figures
from (Mandarin oriental website, 2008) “Average occupancy recorded 66 per cent
during recession”. Nonetheless, Mandarin Oriental’s financial position is strong and the
long-term outlook remains positive due to the strength of the brand and by
diversifying the hotel products they aim to increase sales again by offering customer
more variety. Despite recession the prospects for the Singapore hotel market look
promising the hotel industry has been re-rated upwards. The recent global economic
crises also challenged the hotels to find new ways to stay competitive and drive growth
by finding new marketing tools to promote their products.
Explain how different consumer group affect in the marketing in hotel industry
and how different markets react differently.
It is imperative for the Marketers to continuously identify the cultural shifts in order to
devise new products and services, which find a receptive market. For instance the
demand for health and fitness has risen in the recent decade and this has boosted new
business prospects for hotel industry by adding fitness clubs and Spas facilities within
the hotels. In relation to Arab Muslim market their cultural, needs; wants and behavior
have to be kept in mind in order to attract them. Arabs are religious people, a need for
prayer rug areas in hotel room is a necessity, and they prefer halal food. If hotel
employees are Muslims and understand Arabic, a great asset exists before the hotel
management. Imperatively, a significant percentage of Arabs are wealthy travelers and
prefer hotels with cultural affinity in order to make their stay more accommodating.
Now hotels are constantly interacting with guests to involve themselves with social
networks to understand what they want and their behavior. Mandarin Oriental Hotel
regularly post ads or videos on sites such as You Tube and Face book. Guests
irrespective of their nationalities their primarily selection criteria for hotels is pleasant
rooms, safety and gracious employees. Apparently their secondary selection criteria may
differ due to the cultural influence. (Bowie, 2004) explains “Americans were more
interested in non-smoking rooms and family restaurants, whilst Koreans preferred
convenient location and in-room mini bars.” Guests from all over the world may have
some similarity but their cultural, behavior and values are different. It is important for
the marketers to understand such differences and homogenize their products and market
Identify and explain the rationale for developing different market segment in
The rationale behind segmentation is a good basic starting point. Righty said by (Cathy,
2002) “Segmentation gives a way to understand a market place that is diverse and
5. challenging. Segmentation ties the operation and all its marketing activities to consumer
of some recognizable group or groups of consumers who can expect to respond in a
similar way to a marketing appeal.” The hotel must recognize the right segment after
that design customer driven marketing strategies that build right relationships with right
The three major steps in target marketing are:
Segmentation: Dividing the market into groups of consumers with similar needs,
wants, backgrounds, incomes, buying habits, and so on.
Targeting: Analyze each segments quality and then choose one or more market
Positioning: This is the process of shaping how guests perceive the products and
services offered by a particular hotel in relation to similar products and services offered
Based on your observation and experience, what type of market segment should
Mandarin Oriental Hotel Singapore focus in order to enhance its position in the
region? Justify your rationale
In my observation, Mandarin Oriental Hotel caters to predominantly business travelers
with a high proportion of leisure guests. Segmentation improves profits by increasing
customer satisfaction and bringing on repeat sales.
Some of the segments, which Mandarin Oriental Hotel Singapore caters to:
1. Corporate market segment: They contribute to 60-70 % of the guests in the
The reason so as to focus on corporate market segment is:
They are not price sensitive; are likely to stay for one or more nights.
The guests under this segment are regular guests of the hotel.
The guests are less seasonal as they are not dependent upon weather and holiday
Furthermore, they utilize the hotel for banqueting, conference, and meeting facilities.
Guests attending meetings and conferences in the hotel require overnight
accommodation and this becomes major source of revenue for hotel.
This Segment contributes the largest share of revenue.
Challenges in corporate market segment
6. Corporate market segment will be affected by economic crises that would have a
straight impact on the volume of business. It is crucial for the hotel not to fully
depend on corporate market segment keep venturing out for other segments such as
leisure segment, which can help the hotel to generate revenue.
2. Leisure traveler segment: Mandarin Oriental’s operational and marketing focus
remains an attraction for affluent leisure travelers. Leisure guest’s can be FIT
(free Independent Traveler), GIT (Group Inclusive Travelers), overnight stop
over guests, guests on family holidays, honeymoon couples, incentive
travelers and many others. Hotel has to maintain good relationship with
intermediaries like travel agents and tour operators in order to attract leisure
The reason for the hotel to include Leisure travelers segment:
During weekends and festivals when there is less business travelers at that time
hotel can attract more leisure travelers.
Leisure segment can bridge the gap of sluggish periods of business travelers. “The
enhanced leisure facilities during global economic crises led to the increase
of Mandarin Oriental’s REVPAR (Revenue per available room) by46% in
2009.”(Mandarin Oriental website ,2010)
Leisure travelers can be an essential form of income generation for the hotel.
Challenges in Leisure Traveler market are:
Leisure customers are pricing sensitive compared to the corporate guests.
Leisure guests are not willing spend more money and rely more on discounts.
Leisure guests may not be the regular guests of the hotel.
There is Loss in profit margin, due to the commission paid to the travel agents.
Mandarin Oriental Hotel Singapore is focused on delivering own style of luxury,
comprising the essential elements of tradition, quality and innovation. Hotel should take
advantage of emerging markets, especially with business class and leisure markets. The
total dependency on foreign tourists can be risky; as there are wide fluctuations in
international tourism. Domestic tourism needs to be given equal importance and
measures should be taken to promote it. Meantime Mandarin Oriental needs to develop
effective strategies and consumer relationship program and create new products to keep
its competitive advantage and expand into new markets.
Cathy H.C. HSU & Tom Powers, (2002) Marketing Hospitality, John Wiley
&Sons,Inc,New York. Page no. 67
Bob Dickinson &Andy Vladimir,(2004) The complete 21st Century Travel & Hospitality
Marketing Handbook Pearson Custom Publishing Page No. 208 and 219.
David bowie and francis buttle, (2004) Hospitality Marketing An Introduction Elsevier,
page number 249 , 56, 206.
Nwokorie Date accessed 27th Feb. 2011.
http://188.8.131.52/listco/sg/mandarin/interim/2010/presentation.pdf (2010) Mandarin
Oriental Hotel Singapore Date accessed 5th Feb. 20011.
Philip Kotler,John T.Brown &James C.Makens ( 2010) Marketing For Hospitality and
Tourism, Pearson Page number 41.
http://app.mti.gov.sg/data/article/21262/doc/Box_8.4__AES2009.pdf (2009) Francis
tan and Tee koo hui, date accessed on 27th Feb. 2011.
http://www.mandarinoriental.com/Images/mo_ar2008.pdf (2008) Mandarin Oriental
Hotel Website Date accessed on 2nd Feb. 2011.
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