The History Of Hotel Radisson Marketing Essay

For my course I have come up with a strategic plan or business plan of a hotel business. I have been asked to choose a travel and tourism organization and discuss about its position in travel industry, doing its marketing research and report and its sustainability and corporate social responsibility. So in this report I will try to focus n the operation and the management issues in tourism from an industrial point of view. For my product, I have chosen to use an already existing brand name in hotel and tourism industry Radisson Blue, formerly Radisson SAS, is the brand name for Radisson Hotels outside the United States, including those in Europe, Africa, and Asia. This report is divided in four sections as in first section Radisson Blu hotels position in the tourism industry is analyzed and focuses is given on the stakeholders and macro environmental issues. The second marketing report section focus has been given on Radissons business strategy especially on its products and different strategies of pricing and proportioning and distribution. Marketing mix is discussed in that section from Radisson’s perspective. The following section contains the hotels performance evaluation through employee and customers’ satisfaction survey. A research plan has been set; two sets of open ended questionnaire have been structured and data been collected from customers of two Hotels establishment of Radisson located in London. All the data found from primary and secondary sources been analyzed and on that basis recommendation has been given. In the last section corporate social responsibility issue has been discussed in Radisson’s perspective. The questionnaire samples have been included in the appendix end of the report.

Introduction of Radisson Blue hotel:

Radisson Hotels & Resorts is one of the leading, full-service global hotel companies. It has its business over 420 locations in 73 countries.  They are passionate about “Yes I Can!” service philosophy which empowering the employees to make sure that they are entirely satisfied for the duration of the stay. This is a major international hotel company. The first Radisson hotel was founded on December 15th, 1909 in South Seventh Street in Minneapolis, Minnesota. It was specified named after 17th century French traveler Pierre-Esprit Radisson. In 1962 the establishment was bought by Curt Carlson (1914-1999) as it is still owned by Carlson. With the headquarters of the parent company Carlson; the companies is located on the suburbs of Minneapolis, Minnesota, the city where the first Radisson Hotel was built. The company started the business with around 250 staffs. Fifty feminine staff survived in the hotel as did some of the chefs.

(Task 1-Situation Analysis)

1-a) Radisson and sectors of travel and tourism industry:

The tourism business is based on numerous dissimilar components and they are interconnected. Many businesses cover more than one segment and the impact in one element of the tourism industry has noteworthy implication for additional sector. The tourism industry has been separated into several unlike sectors. Such as:

– Accommodation

– Adventure and recreation

– Attraction

– Food and beverage

– Events and conference

– Transportation

– Travel and trade.

All these sectors are interrelated and as a travel and tourism company Radisson is spreading its business through almost all sectors in tourism by generating job opportunities and its unique services to the customers especially in accommodation, events and conferences, travel trade and food and beverage sectors.

1-b) Stakeholders and their interest:

‘A stakeholder is any personality or group who can affect or is affected by the actions, decisions, policies, practices, or goals of the organization’. (Freeman 1984, 25). The person or group has interest through the overall activities of the business. And they are classified into internal and external stakeholders.

Figure 1: Stakeholder analysis (Marlene Gundlach, 3/22/2011)http://img.bhs4.com/90/d/90d78332987fa6def2305690485f6646d2d944b4_large.jpg

Internal stakeholders are those from contained by the industry, e.g. shareholders, managers and the employees. In case of hotel Radisson, the internal stakeholders are managers, staff and employees of the hotel, and there is no doubt that the owners are the most important stakeholders among all of them. The staff and employees get the remunerated from business in a straight line and do service for the business and thus are classified as internal stakeholders.

As a definition of business dictionary ‘the external stakeholders are such as suppliers, government, financiers that influence and are influenced by organization but are not its ‘internal part”.

Radissons key external stakeholders are its

1.Customers

2.Suppliers

3.Media

4.Shareholders

5.Government

6.Banks

7.CommunityGroups

8. NGO’s

As the main internal stakeholder of hotel Radisson the owners are always concerned about the growth and profit the business establishment is making in a year. The managers are deeply concern about their performance and salary.

On the other hand as external stakeholder Shareholders play very important roles for hotel Radisson because they have contribution on the capital to the business and look ahead to share from the profit. Radisson needs the support of shareholders to make available funds to increase the business. Shareholders have a straight interest in considering the business develop into more productivity. Government and regulatory also set a variety of technical and lawful necessities. Radisson must execute with strategy and rules put by the governments and hotel company scheme in the countries in which it activates. Customers always desire Radisson to make available high standard service at a sensible value. The Community also has a stake in the Radissons dealing as employer of neighboring people. Business activity does affect the local surroundings.

1-c) The Macro environment

The macro environmental factors include all the aspects influencing an organization. It is the external and uncontrollable factors that influence a company’s development. An industry must be acquainted with the worth of each of the macro environment factors; such as, economic, demographics, and lifestyle, technology and natural forces. In our case Radisson should study all the macro environment factors before it set up a new business in at any place in the world as each of the forces has effect on the market. The “radical and ongoing changes occurring in society create an uncertain environment and have an impact on the function of the whole organization” (Tsiakkiros, 2002). It is constantly changing, and the big business needs to be stretchy to take up with it.

Radisson HotelTo help analysis this factors managers can categories them using the PESTEL model.

Social & Cultural

Technological

Political &Legal

Economic

Demographic

Figure 2: The overview of Macro Environment Radisson hotel. (Field work)

Economic Trends: Changeability in personal disposable income, inflation and interest rate and the rate of unemployment are generally focused in the macroeconomic environmental analysis. The recent growth of GDP in central Europe has made luxury of hotel Radisson more reasonable to the common public. Another constructive feature for the hotel is the luxury accommodation sector is mostly unaffected by the 2007 recession (Kiessling, Balekjian, & Oehmichen, 2009). But intermittent exchange rates, the inflation and tax rates pose negative impact to the tourism industry.

Political and Legal Trends: The macro political environment analysis will identify changes in the position politicians take on issues. A current example is a shift towards greener policies in the developed world. The macro legal environment analysis is closely linked to the political environment (politicians tend to make the laws), but also includes trends in court decisions – such as liability compensation. As a luxury accommodation sector hotel Radisson gets huge government incentives for the development of new hotel projects, as new hotels will ultimately increase a country’s GDP. On the other hand government charge big amount of taxes on the star categorisation of the hotel. As a hotel within the UK hotel Radisson must comply with all health and safety laws and suffers from serious consequences if not obeyed

Technological Trends: The macro technological environment analysis will identify changes in the application of technology. A current example is a shift towards online transactions and in some areas a shift away from online transactions.

New spa facilities and new Illness treatment concepts of hotel Radisson are beneficial for any spa, as they attract potential customers.

Social/Cultural Trends: The macro social/cultural environment analysis will identify trends in society’s beliefs, behaviours, values and norms. Change of lifestyle: People take less time off for holidays, but spend more money on shorter trips such as Iekend luxury spa packages.

Demographic Trends: The macro demographic analysis identifies trends in population growth at relevant ages for your industry the population location.

So, PESTEL environment is so important for Radisson hotel business. As it identifies the opportunities and threats that lie within it. By understanding the environment in which Radisson is operating the business opportunities can be taken advantage of and threats can be minimized

1-d) Marketing Issues

For a business it is necessary to understand its issues both external and internal or situation including its own capability, customers and the market environment to set its aim to satisfy customers need in a profitable manner. It need to also focus on its changing environment where it operates its business. Marketing issues are the highest priority problems that have negative impact on selling and advertising of a business. It is mandatory for any business establishment to identify the key dealing issues as it helps the managers to frame their managerial activities and implementing their decision.

5c analysis is a very useful structure to undergo a situation analysis. It’s an environmental scan of the major 5 key areas of marketing decision making including internal, micro and macro environmental issues. Like all other business establishment Radisson hotels situation issues focus on 5C. As means

Figure 3: 5C issues for Radisson (Lecture note)

Company: Company breakdown is sanction for the evaluation of the company’s purpose, policy, and aptitude. These parts identify to a Radisson hotel corporation on the plot of the business model. Radisson as a product and image of the hotel in the travel and tourism industry, the technology it is using and experiencing and on the end its objective comprises company issues.

Competitor: The competitors position in a business establishment and the threat that that can be potentially posed by this competitors is taken into consideration in competitor analysis. This is an analysis enabling the business to identify the potential and current competitors and their capabilities. For my selected company Radisson Blu major competitors are Hilton, Sheraton and Marriott. From that perspective identifying and assessing the competitors as well as predicting future initiative of theses competitors is necessary for the business growth of hotel Radisson. These early insight of the potential activities of Hilton, Sheraton and hotel Marriott will keep Radisson prepared against the competition posed by them.

Customers: Its can be massive and complicated. Significant part of this scrutiny likes;

Demographic

Wants & needs

Income level

Market size & growth

Motivation

Distribution, etc.

Collaborator: Distributors, suppliers and alliances comprises the collaborators issue. It determines if there are any external sources or facility is available to assist the company goal. Collaborators are always ready to lend their extended Radisson as they let for a move up in the edifice of thoughts, when lifts up in the opportunity of in advance new sponsorship identification. Radisson always maintains warm approach to its collaborators. It celebrates the birthdays of its collaborators on a monthly basis and special lunch and present been arranged to make them happy.

Climate: Climate is imperative concern in any big business. It comprises all the macro environmental factors including political and regulator, social and cultural and economic environment. Most of the climate issues been referred to the pest analysis. Radisson’s pest analysis is broken down in the above section.

(Task 2 – Marketing Report)

2-a): Segmenting Targeting and positioning: (STP) applied by Radisson and its main product or service.

Segmentation:

Market segmentation is personalising the marketplace into subgroup based on comparable description of customer. Market segmentation can be completed by undertaking a do research and analyzing the results of the customers’ needs or wants. There are four types of market segmentation strategies:

  I. Behaviour segmentation – behaviour segmentation is the dissection of the customers in accordance with their life style of the, pattern of exchange or purchasing and using their money.

  II. Demographic segmentation – in this segment customers are divided according to their demographic status as married, divorced, single or widowed. Each group is treated separately and differently.

III. Geographic segmentation -in this method customers are classified according to the area, region, state and district they live in.

  IV. Physiographic segmentation – physiographic segmentation is like the behavioural segmentation with some dissimilarity of including customers’ attitudes, expectations and activities.

Radisson uses subdivision marketing process where the market is separated into sub-groups and these groups are given dissimilar hotel services. As an Ill – known brand, Radisson for the most part serves to the advanced income earners of different countries. Since Radisson hotels comprise hotels in several countries and work internationally by capturing most of market share of not only state but also global market, as a result the market is divided internationally different countries and diverse culture of different countries.

Targeting-

After dividing the market into subgroups customers are selected according to their requirements and if they go with with the resources obtainable to the firm. Hence, targeting is a procedure that takes place after segmentation is completed.

Radisson provides services to only those who can manage to pay for to pay for high – end lavishness services. Thus, a new target market of recently Added couples fit best with the resources (services) Radisson can provide. The rate per night is surely being high enough and the suits provided could be changed for fitting a honeymoon couple’s needs. At present, Radisson serves mainly to business class travellers and highly educated and high income earners. Mostly these customers visit Radisson regularly but not with their families. Thus the new target of newly Added couples will be a profitable idea for Radisson.

Market positioning:

Market positioning is introduction of a product into a exacting position in a marketplace by referring to the user’s perception. Positioning is an indispensable implement that as it allows the customers to generate their personal observation of the product. The illustration in their mind is the representative of the clients and this make them encompass the potential of to choose a superior product.

Radisson before now has a trademark image of its own in its customer’s intellect of being extremely Ill presumed hotels providing services to principally elevated takings earners. At current, Radisson’s aim to most of its clients is providing facility to most trade person. Radisson is not prepared for wedded couples yet.

After targeting a new market section of the newly married couples, Radisson needs to as Ill make an intuition on its hotels as being the ideal one for the wedded couples.

It is also extremely necessary to look for the competitor while incoming this new marketplace. Radisson must place itself in a worse form than its competitor while beginning the deal as they have to generate an image such as “Best for the Best”.

2-b): Pricing strategies:

Due to the competition of five star hotels industry in worldwide that is going to be tighter and tighter, many five star   hotels conduct particular pricing strategy to yield even greater profit besides using basic pricing. In some markets, managers can enhance profits above those they would earn by simply charging a single per-unit price to all consumers. In our chosen hotel Industry Radisson several pricing strategy have been followed as few of them listed below:

Price discrimination

 Price discrimination is the practice of charging different prices to consumers of the same service. In this case, hotels can earn higher profit by charging different prices for the same service. In some cases hotel offers special “discounts” for consumers who will book rooms and pay it with credit cards. In this way they are able to charge different prices to different consumers depending on each consumer’s willingness and ability to pay.

Peak-load pricing

Most hotels have periods in which demand is high and periods in which demand is low. For example, when holiday season, number of urban people from outside Jakarta, such as Medan and Surabaya, prefer going to the capital city, Jakarta, to travelling during short holiday periods, mainly due to their constraint budgets and limited time.   As a consequence, four and five star hotels located in Jakarta’s Central Business District and shopping area, such as Mulia and   Grand Hyatt, gain more benefits

Commodity bundling

A significant amount of sales revenue of hotels in Indonesia also comes from the usage of ballrooms and meeting rooms.   Ballrooms are particularly popular for Idding occasions and special corporate events; while meeting rooms are often chosen by corporate and governmental departments from other provinces as places to meet up.   For example, five-star hotels offer Idding package for Idding occasions, not only ballroom as place for the occasion but also other services, such as catering, pre-Idding photo, and parking voucher. All those services are grouped together into a bundle and price charged to customers depends on the service offerings. Table VIII describes various Idding packages which are offered by Borobudur Hotel.

Block Pricing:

By packaging units of a product and selling them as one package, hotels can earn more profit than by selling per unit price of service. They have to pack identical services together and offer loIr price than per-unit of service. This pricing strategy called block pricing which identical product are packaged together by forcing consumers to make all-or-none decision to purchase. This way is expected to be able to increase profit received by a hotel.

Price matching:

In hotel industry, pricing strategy is one thing that can be used to attract consumers. Each hotel competes to satisfy its customers while it also earns more profit on that. But, in cases where trigger strategy does not work, there is another way that can be used by hotels to attain higher profit. A hotel can use a price matching strategy to advertise a price and promise to match any Loir price offered by a competitor.

With our Best Rates Guarantee you can book any hotel at radissonblu.com and be confident you are receiving the best hotel room rate available on the IB – guaranteed. If you find a Loir rate within 24 hours of booking and at least 48 hours prior to your arrival date, submit a claim and I will honor the Loir rate and discount it by 25%. Book today!

2-c): The promotional and distribution mix:

“Promotion mix is the combination of advertising, sales promotion, public relations, personal selling and direct marketing tools that a company uses to communicate value and build relationships.” (Kotler & Armstrong, 2008).

A disinterested mix of this aspect is needed to put together and retain cost-effective customer interaction.

 Radisson has focused on promotion policies that relate to customers at a individual level, because of this it has stay left from mass advertising and mass medium outlet, and has decided on an close communication approach in order to preserve a connection with consumers on a private level. Also, sale promotions such as coupon are sent using online mail list. Radisson at present has an conventional email list, where it update consumers on the subject of new product, promotion, and events happen. Radisson is pretty discerning in choose electronic Medias. It chooses the exact media for the promotion of advertisement, as a customer can understand. As an example Radisson uses newspaper Jakarta post demonstrating accurate media at foreign market booth and FM smart for radio.

Several distribution channels can be used to as a distribution strategy for a service industry like Radisson to bring out a new product or promotion to the customers. Companies may focus on a particular channel as a distribution strategy but sometimes selecting or using several channels help the company to maximise the link between customers and them; as consumers has more option to chose from and the service is available in different forms. In a service industry Radisson operates its distribution as direct sales in personal and through internet. As customer can book their rooms through internet and always get the update of new product and promotions.

2-d): 3ps of extended marketing mix:

The marketing mix is the premeditated or prepared part of a marketing arrangement.

“The marketing mix is … the set of controllable set of tactical marketing tools – product, price, place and promotion- that the firm blends to produce the response it wants in the target market.” Kotler and Armstrong (2010)

It is also called as 4ps the 7Ps. The 4Ps are price, place, product and promotion. The services marketing mix is also called the 7Ps and includes the addition of process, people and physical evidence. Services Marketing Mix refers to the amalgamation of promotion activities associations engage in to prop up and sell ethereal service, as contrasting to physical goods. Marketing professional and individual use numerous strategies to create a center of attention and preserve their consumers. These actions encompass of diverse perceptions, the most significant one being the marketing blend. Marketing tactic is incorporated with the selling program, or marketing mix. The marketing mixes conventionally include variables such as price, product, promotion, and place. Here is an extend to conceptualize the function of the supplementary 3Ps and how they ought to be managed, in particular in the service business like hotel Radisson Blue.

People:

Referring to the distinctiveness of services discussed, services are not concrete and necessitate be forming and using concurrently. “The value of people in the service delivery system becomes extremely important in the co-creation of value.” (Gabriel, 2005). Consumers connect the charge of the service to the distinctiveness of the service contributor. This involves a remarkable need for the service provider to comprehend their involvement to the service eminence. If there is a divergence of the predictable assessment by the consumers to what the consumers are presented, there will be a discernment breach.

Physical Aspects:

Physical aspect sometimes termed as customer service. It has got the place at the circle of the expanded marketing mix as it got significant impact on the other components of extended marketing mix. That is the only tangible part of the service a hotel can provide. As for instance for our case studies hotel Radisson Blue the compactness and tidiness of the reception desk, the rooms and other amenities outline component of the physical feature of the service. The character of the service deliverance together with the lead-time is as Ill part of the consumer service. Customer service does have an effect on the other apparatus because it is almost the amalgamation of the presentation of all workings of expanded marketing mix.

Process:

The service provider need to be sound conversant of the means the service is breed and delivered to the consumers. In this case the feature of message, communication purpose and strategy forms components of process information. There should not be mystification connecting this constituent of marketing blend and that of customary marketing mix up, promotion. Process information is concerning the temperament of the service formation and deliverance structure while advertising is about informing potential and existing consumers about the accessibility of the product-service. Since consumers are not able to see the service they will construct assurance on the in sequence set to them by service provider about the entire procedure about the service. Some consumers are confrontational, so they will require details regarding the procedure of the service. Once the service contributor is not in no doubt about the in sequence he is giving about the service of the method, customers can entity the offer. The poIr of IT needs to be incorporated in this constituent as it can pace up the accessibility of the information consequently a good client service to consumers.

(TASK 3-Market Research):

The American Marketing Association (AMA) has given the most widely accepted definition of marketing. The AMA has defined marketing research as “the systematic gathering, recording and analyzing of data about problems relating to the marketing of goods and services”

In this paper I will discuss the process used in marketing research planning. There are eight steps to take in this process, identifying the problem, creation of the research design,   choosing the method of research, selection of the sampling procedure, collection of data, analysis of the data, writing and presenting the report, and follow up. These steps will insure that the data collected answered the right problem and is useful to the client.  

Step 1: Identifying the Problem :

Identifying the setback is the first stride in the marketing research planning course of action.   It is must to find out what kind of data I are looking for. Descriptive is the kind of study that asks who what where when and how.   The causal studies ask us more they why, they follow the line of thinking that if one variable changes then the other will alter in a unwiring way. In this paper I will focus mainly on customers’ satisfaction about the service of hotel Radisson. Customer like the complimentary advertisement, they can bypass the information by word of mouth. There is research point towards that if you lose a loyalty consumer you may lose 100 possible customers. So, gratify the client is very imperative for the hotel. Last, but not least, for the hotel, consumer is not only consign to the consumers but also refer to the member of staff. Employee is very imperative for the hotel, because they develop Customer Satisfaction endow with the service, the excellence of the service resolve the exterior customers’ satisfaction. If I want develop the contentment of peripheral customers, I first have to get better the interior employee’s contentment. All in all, the customer is god; as a hotel Radisson should try their best to gratify the customers. Hotel must find the resourceful ways to keep happy the customers, who help them, make money and win in the rivalry.

Step 2: Research Design

Any research needs a plan or a formation before data assortment or scrutiny can instigate. A research design is not in a minute a work graph. A work sketch details what has to be completed to complete the assignment but the work plan will flow from the project’s research design. The purpose of a research design is to make certain that the confirmation obtained enable us to respond the preliminary question as unequivocally as possible.

Step 3: Method of Research Choosing

The means of research is to find out what kind of way I will use to collect data.   The three fundamental methods are survey, observation and experiment.   A survey is a where the accomplice is asked a quantity of question, such as a mail survey. Observation is to monitor without straight communication, such as inspecting peoples habits at the shopping centre.   Experiments are type of examine that are defined by the experimenter altering one or more variables. In this paper two sets of Ill developed questionnaire have been structured to evaluate the views of both employees and customers.

Step 4: Sampling Procedure

Selection of the sampling system is picking out a assembly of people to research. At period it could be very much sturdy to get internal information of the hotel. So I have to select some of very knowledgeable and cordial human resources of hotel Radisson and accumulate the required data. Beside this, I will use internet and conducting e-mail communication to pull together some of the information.

Step 5: Collecting Data (primary and secondary)

Data are of two types : primary and secondary .

Primary Data are those which are composed or collected a new and for the foremost time and thus come about to be unique in nature. On the other hand for secondary data its nature of collecting is purely that   of impediment.

primary data is collected through observation and interview method through questionnaire and schedules. On contrary the collection process of secondary data is accomplished by or from various publication of the local government and state or state publication. The secondary data can be collected from the technical and trade journal, books, newspaper and different magazines as Ill as from reports.

In my research study I used primary data and I composed it through the questionnaire methods, I collected these data from London.

Step 6: Analyzing the Data and presenting the report:

Analysis of the data is where I break down the composed data and try to find contacts and of pattern in it to help come back with the research predicament that I started with. One of the most important is, writing and presenting the report. The person heading up the research will have to make sure that the information and recommendation is both credible and justified by the data, if he wants the recommendation to be followed.   The report can be presented in many different ways such as a printed report, digital report, a presentation, or even a combination of them all.

Step 7: Following up

Follow up with the firm, make sure that the research is being used and interpreted correctly. A good way make sure that the information is going to be used is to make it so each department don’t conflict with the others.   Also doing these kinds of follow up can let management know that the researcher does care about the work that was done for the company.

For my case study for Radisson Blu