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The Political And Legal Factor Marketing Essay

5049 words (20 pages) Essay in Marketing

5/12/16 Marketing Reference this

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Holiday Inn is a medium to large sized well-known hotel in whole over the world, which has 1,301 hotels globally. The first Holiday Inn hotel opened on 1st august 1952 in a roadside location in Memphis, Tennessee. Mr Kemmons Wilson primarily came up with the business plan after his family excursion in Washington DC where he had poor quality service from roadside motel. Holiday Inn is one of the world largest economy chain hotels forming fraction of the British Intercontinental (IHG). In order of the customer service Holiday Inn endow with two types of service, one is High- Rise full service plaza and another one is Low- Rise full service hotels.

The following information divides by four different tasks. First part is situation analysis. Holiday Inn fits in the accommodation and hospitality sector in travel and tourism industry. Stakeholder and their interests are more important to identify for situation analysis. PESTTLE and current marketing issues also considered in situation analysis. Second part is marketing report of segmentation, targeting and positioning strategy of Holiday Inn. Promotion, distribution and pricing strategy has described in marketing report. The extended marketing mix (process, physical and people) has effectively used in Holiday Inn. Third part is all about market research report for customer service and outlines the stages of research plan. Final part is Holiday inn contribution and responsibilities in environment and social sector.

Chapter: 1.0 Situation analysis.

1.1 Organisation structure: Holiday Inn is part of the IHG brand and they have worldwide business in whole over the world. They have hotel from 3 stars to 5 stars hotel. Holiday Inn has two types of business in the market one is holiday inn resort and another one is holiday inn express. Holiday Inn services are booking services, reception services, room’s services, food/beverage services and other services like laundry services. Holiday Inn provides serviced and non serviced accommodation to the guests. Holiday Inn mission statement is “Great Hotels Guest Love”. Quality Excellence and Serve Customers with Quality Products is main objective of Holiday Inn. So by nature and environment of this business, Holiday Inn fits in accommodation and hospitality sector in travel and tourism industry.

1.2 Main stakeholders and their interests

Stakeholder is the person or organisation who direct or indirectly related to the business. Stakeholder can affect business by their interests and activities as well business can affect their stakeholder by their activities. Holiday Inn has internal and external stakeholder in their company.

1.2.1 Internal stakeholders:

Owners and shareholders: Holiday Inn has strong share business in the share market. People find their interests in the Holiday Inn and become stakeholder of the company. As long as company doing well and become profitable business in the market, shareholder will have good eyes and once business going down shareholder will try to leave the company. Holiday Inn is one of the leading hotel industries in the world and they have good position in share market.

Employees: staffs are the main internal stakeholders of Holiday Inn because, company run by their activities and contribution. Every staff has specific duties to perform according company policy and procedure. Holiday Inn has human resource manager where employee can get deal with them. Employee accepts the terms and condition of holiday Inn employee work policy when they recruit to the company. HRM will take regular interview or assessment to check employee’s performance and they will provide sufficient support to get employees motivated, such as promotion, salary increase and further training etc. As long staffs are happy in the company they will provide valuable service and performance for the company and that happiness depends on their facilities like bonuses, sufficient wages, discounts etc from the company.

1.2.2 External stakeholders:

The community: The community is interested in the environmental concern, job availability, and social matters. Holiday Inn always gives them first priority, as they can become a well wisher for the company. They will look for the activities of the company and they will take proper act on that. If company do any pollution they will raise complain which will get pressure group attention. If company do any social event and they participate there they will become part of the company and will recommend others.

Customers: customers can make company last longer if they get expected quality product and services besides, nowadays customers are more aware of the products and services. Holiday Inn always provides quality services as they are now in the top of the customer choice list. Loyal customers expect quality service, offers, coupons etc from the company and Holiday Inn does these things to feel them that they are valuable in the company.

Government: government got interests in corporate tax, which more can get paid by more profitable company. They also look company policy and procedure that they are following government laws and regulations. If they do not abiding the law they will take proper action upon on it.

Pressure group: pressure group is one kind of organisation who can force the organisation to take immediate action such as –

Health and safety.

Food hygiene.

Environmental issues.

HRM issues.

If pressure group finds any issues, which, need to change, they will protest it and will give them certain time to recover it.








Figure 1 – macro environment of business travel and tourism (July 2010) Reference missing

1.3.1 Political and legal factor:

Political and legal factors is include by those are the activity which comes from government and take changes in the hotel industry. Holiday Inn gets affected by political and legal factor such as, Taxation, Legislation, political stability and government duration. Paul (2010) analyse, new legislation can affect the company in various ways. Whenever the government change they can bring new rules, which can be bad or good for the company. “The industry faces a relentless tidal wave of tax and fee proposals from a multitude of sources – federal, state and local  – including hotel occupancy tax proposals that will challenge the industry and our ability to respond,”

1.3.2 Economic factor:

Company’s survive duration depends on the country economic fluctuation. Economic recession bring big hamper for the company. Different country got different exchange rate, which can bring more problems. Economic factors are including by:

Inflation rate.


Exchange rate.

Economic growth.

Interest rate.

1.3.3 Social factor:

People are aware of their status and brands conscious in society and they choose the multinational hotel industry for their holiday. Holiday Inn hotel always expose the country’s culture, which shows the admiration of the country. Holiday Inn is more concerned about their customer’s expectation level and they trained their employee to serve the best. Social factors such as –



Customer expectation.


1.3.4 Technological factor:

Technology is the key features, which brought revolutionary changes in hotel industry. Technological factor include by:


CRM system.

E- Marketing.

E- Commerce.

Research & development.

Holiday Inn always got changed with new innovative technology. They have all the modern technology in their industry to provide quality services to their customers. As an example they need to provide 24/7 Wi-Fi Internet services because of customer demand.

1.3.5 Environmental factor:



Natural disaster.


Environmental factor include by:

Company should look after about country’s environment condition and take appropriate action according it. There is an environment agency in every country that always tracks every company’s activities to balance the environment. They make sure company does not affect that environment if it is they will take legal action for that.

1.4 Marketing Issues

Holiday Inn is one of the largest hospitality industries in the world. They are facing more marketing issues while they are running their worldwide business. Nowadays the main marketing issues are more likely to come up on the top is economic crisis in the western country. Most of the European country is on inflexible crisis and which affect on total hospitality organisation. When the economic crisis is goes on people has fewer jobs, less money to spend and they struggle to survive their regular life. In this condition people do not even think about to visit or stay outside where they need to pay. Along with that economic crisis, there is another marketing issue is competitors company in the market place. So many hospitality industry in the market place and they are providing various offer to attract customers where certain amount of customers are available in the market as reason of economic fluctuation. Terrorist attack and war is another marketing issue which affect the business in many ways, particularly in Middle East the riot and strike going on which affect our businesses as tourists feel risky to visit there. Advertisement is one of the popular and most universal ways to promote company offers and products. New innovation and updated technology is changing the advertisement system. All the companies are publishing their offers and products advertise in internet (website, blogs, Facebook, twitter, etc). Holiday Inn also brought these changes in their company. They put new advertisement of their packages in their own website as well in other intermediary’s websites. Check in-out, online payment, online passbooks, online booking and cancelling are also getting changes with new technology system.

Chapter: 2.0 Marketing Report.

2.1 Segmentation, targeting and positioning (STP)

Segmentation, targeting and positioning is a simple method of understanding customer behaviour and organisation market behaviour that help to satisfy customer expectation as well company profit.

2.1.1 Segmentation:

”Market segmentation recognise that people differ in their tastes, needs, attitudes, lifestyles, family size and composition, etc…….. it is a deliberate policy of maximizing market demand by directing marketing efforts at significant sub-groups of customers or consumers” (Chisnall, 1985: 264). However, another market segmentation can be address, which can be product oriented to customer need based oriented. Two main looms to segmenting the market, one is breakdown and another one is build- up method. In breakdown method where look for the identity groups with the different values and it is most recognised and well established method. In build- up method the main aim is to look for the similarities where no considerati65on for differences. ”The build-up approach seeks to move from the individual level where all customers are different, to a more general level of analysis based on the identification of similarities” (Freytag and Clarke, 2001).

Holiday Inn hotel got their segmentation strategies as like most of the hospitality industry got. According Wind (1978), Segmentation heterogeneity and member homogeneity has been used in holiday Inn from long time.

Segmentation strategies are:

Step- 1

Specify the market.

Step- 2

Establish segmentation criteria.

Step- 3

Generate segmentation variables.

Step- 4

Develop and evaluate market segment profiles.

Step- 5

Evaluate company’s competences to serve selected segments


2.1.2 Targeting:

Target market is specific place or time where company should take appropriate action which has been covered by market segmentation. After segmentation company can serve their products or services towards targeted segment.

Kotler (1984) explained a target method which called together DAMP and Holiday Inn company target their market based on DAMP method, to make segmentation effective all the segments must be:

D – Distinct.

All the segments should have differences with each other.


It has to be easily accessible, so that promotional programme or distributer can go through easily.

M- Measurable

Company can measure or identify any segment easily.

P- Profitability

Is that the segmentation is good fortune for the company?

For target market there are 4 approaches where Holiday Inn use differentiated and focused marketing approaches.

Target marketing approaches. (Fieldwork)

Holiday Inn use differentiated and focused marketing where they find many segments and they attract and focus each segment different way. Holiday Inn Company makes their offer and packages in specific way where they are targeting only them. As an example Holiday Inn are running a offer which is called kids stay and eat free with their parents. In this offer they targeted parents where kids are unable to stay without their parents.

2.1.3 Positioning:

According by Kotler (1997), ”Positioning is the act of designing the company’s offering and image so that they occupy a meaningful and distinct competitive position in the target customer’ minds”. As Ries and Trout (1972) described positioning is vitally essential as it is ”not what you do to a product, it is what you do to the mind of a prospect”. After segmenting and determining the target market, company look for the space where they will make their brand position that means why customer should buy your products or services. Positioning concerns with two basic elements. First one is internal as your physical attributes and capability in your brand offer and the second one is products awareness and responses in marketplace with the competitive brands.

2.1.4 Four segmentations criteria

To segment any market there is four main criteria, which is very important for the market segmentation.







Family size.

Income level.








Zip/post codes.






Purchase rate.

Consumption rate.

Media usage.

Technology usage.

Holiday Inn Company segments their market through above four segments. They segment their market according to the customer age and gender. As an example they do kids free offer according by the kid’s age and even they have offer for the family by family member size. Geographically they segment their market according by country or nations side as like in London 2012 Olympic season holiday Inn opened a new branch near the Olympic stadium for the visitors and tourists of the Olympic game as they know the purpose of the travel. They always look for the customer lifestyle and price concern as they offering new offer so that customers need and want meet their expectation. They segment the market according the purchase and consumption power of customers.

2.2 Product and services:

Medic and Middleton (1973) described product ”as far as the tourists is concerned, the product covers the complete experience from the time he leaves home to the time he returns to it”. Holiday Inn is one of the IHG industries. Holiday Inn has two different style hotel industries in their own they are Holiday Inn Resort and another one is Holiday Inn Express. Ultimately both part got same products and services with some differences. Products availability and reliable service is depending on the size and category of the company. Bigger hotel got many facilities than smaller hotel. They have all the updated technology, product and facilities to give quality service to their customers. Maximum Holiday Inn resort got pool, Spa, sauna room, first aid centre, and 24 hours security guard and boutique facilities. In bungalow they have air-condition, tea-coffee maker, hairdryer, telephone, Wi-Fi and exterior wooden balcony. Every Holiday Inn got their own restaurant where they provide bread and breakfast, lunch and dinner. Restaurant has Bar and party facilities. As tourists come from abroad Holiday Inn got currency exchange service in the reception desk. Tourists can also withdraw money by using free cash machine in the hotel. As external facilities in the reception desk, customers can get flight conformation, booking services, taxi- cab booking, and babysitting service. There is some additional services where customer needs to pay like car parking, laundry, and safe-deposit box. Every single room got DVD and satellite facilities for customer entertainment. All are Holiday Inn Resort and express are smoke free property. CCTV are providing to control and record for the every single activities.

2.3 Pricing strategies:

Price is value of a product which has set by the company in order to make profit and recover their cost, where customer are oblige to pay to buy the product. Pricing strategy is 3 types. There is three pricing strategy which is been using to pricing products or services.

Cost- based pricing: price is determined by product or service and where company add price in order to cover their cost and make profit. In that sense company pricing strategy is bit risky as they do not allow customer-buying power. Company can make profit or loss in cost-based pricing strategy.

Customer based pricing: the company determines their price or firm that customer is able to pay. Customer purchasing ability is more concern in this strategy. Company might make less profit because some consideration for customer but can make more profit if they sales volume is high.

Competitor based pricing: pricing strategy is by a company where competitor plays a vital role. Company always look for the competitor pricing skim as they price their product.

Holiday Inn do customer based pricing and competitor based pricing strategy. Along with that holiday Inn does psychological pricing system, as an example winter offer: room from £49.99 in holiday Inn. When customers see the price is £50.00 instead of £49.99, they will assume the price is bit higher but the difference is only 1 penny. In competitor based pricing strategy holiday Inn always look their competitor activities upon on the pricing strategy. Holiday Inn pricing position is depending on the demand and supply. Holiday Inn CMO Tom Seddon (August 27, 2009) said we always see how other company shifting their business and making customer attractive to their products. We also pricing our product according demand and supply and we also react on the real time.

2.4 Promotion strategy:

Promotion strategy is a way to support marketing by using different communication media including advertising, personal selling, direct marketing, public relation, and sales promotion.

Elements of promotional mix are

Source: Promotional-mix. (Lecture notes).

Holiday Inn promotes their products or services in many ways. Basically they use advertising and sales promotion strategy to promote their products as well they also use other promotion strategy.

2.4.1 Advertising:

Kotler and Armstrong (1999) identify, Advertising is ”any paid form of non-personal presentation and promotion of ideas, goods and services through mass media such as newspapers, magazines, television or radio by an identified sponsor”. So, advertising is such a way to promote products or services by using mass media like newspaper, TV, radio and magazine etc. Advertising is above the line promotion method.

Holiday Inn publishes their new promotional offers in order to get customer attentions and also inform them about the offers. Nowadays online advertising system also been using in advertising method. As an example Facebook, twitter, etc. Even customer can find all the discounts or promo codes in online such as in Along with they put their promotion offers in their website so whenever customer gets to the website they will find all the offer information. Holiday Inn advertisement media is broad and all been using effectively for advertising products and offers.

Holiday Inn Advertising Media (field work)

2.4.2 Sales promotion:

Sales promotion is one kind of marketing technique where company make sales for product over a certain time and where they promote their sales volume. To increase sales target Holiday Inn make lots of promotional offers and they publish it through advertising media such as TV, magazine, online, etc. For sales promotion they give offer and attract customer to buy it. They put their offers in, magazine, newspaper and TV so that customer can get inform about it. As an example Holiday Inn publish their recent promotional offer in and the offer is: up to 20% off with 21 advances booking at holiday Inn. Other promotional offers of Holiday Inn are:

Free deal: kids eat and stay free.

Big deal: first night free at holiday Inn.

Big deal: great saving with loyalty club membership at holiday Inn.

2.5 Distribution strategy:

Distribution strategy is the process of delivering your products from your company to customers. Distribution can happen in two ways either direct or indirect.

OTHM notes 2011.

Holiday Inn Company uses both are the distribution strategy. They make easy access for their products in the market so that customer can get it easily. They give their products or services to the intermediaries like tour operator who can sales their products or services to customer. As an example Thomson is a tour operator they bundle air ticket, accommodation cost and transport costs etc. together and they make packages for the customer where Thomson can sale holiday Inn products in the accommodation sector for making a suitable package. This indirect distribution method can be profitable for the company if they have control over the product and how well they dealing with the tour operator. Holiday Inn got their own office and website where customer can buy their products directly. In this direct distribution customer can get more facilities than other distribution. Holliday Inn makes blogs and advertises on website or different social networks where customer can get their products by using hotel website. They use both are the distribution strategy so that they distribute their products more. In today’s world market has ample of competitor for a similar product and they want to get their customer in anyway. Holiday Inn has chosen both strategies so they give customer more choice to get their products or services.

2.6 Extended marketing mix

Marketing mix is a conceptual frame work which highlights the principles, decision marketing managers make in configuring their offerings to suite customer needs. Marketing mix idea has first given by Borden in 1965. Marketing mix has main four elements they are product, price, place and promotion. But there are 3 extended marketing mixes which is added by many authors for the time being of marketing research and they are people, process and physical evidence.

2.6.1 People:

People are all related with staffs. Holiday Inn has got proper trained and skilled staffs in their company. Holiday Inn cares about their employee with exceptional benefits. They have Holiday Inn 401(k) plan for the eligible and successful employee. Under 401(k) plan staffs have benefits such as retirements plan, pension plans. Employees also receive staff discounts and bonuses on performance. In other benefits plans they have health and wellness benefits and insurance coverage plans like life insurance. They pay such a competitive salary to their employee form entry level to high level. Every succeed employee receives medical care such like dental and vision care plans. According to 401(k) plans eligible employee also receives educational programme along with paid holiday vacation, flexible working schedule and discounts on holiday Inn services. Holiday Inn provides proper induction and training for the employee to give best performance for the company. Every employee receives review and feedback after regular interval. HR sector maintain all the issues of staffs side to give a nice working environment for employee.

2.6.2 Process:

Process is including by booking, check in- out and queuing system. Holiday Inn has such an effective process for their products or services. Customer can make their booking through phone, mail and fax as well by using online services. Holiday Inn website is controlee by automated software where customer can get 24 hours service. For confirmation of booking customer will receives immediate confirm message via their contact details. Customer service is always delivered by trained and friendly employee. Holiday Inn has 24 house reception and customer service so customer can get help and advice any time.

2.6.3 Physical evidence:

Physical evidence is company appearance in the customer eyes. Holiday Inn is very well designed and decorated with quality of their products and services to get customer best attraction. Every room has all the facilities for the customer satisfaction such as TV, Wi-Fi, and telephone etc. All the rooms and services is organised by the customer budget and expectation. Holiday Inn changes their decoration with the season and festive. As an example In Christmas time they will decor their hotels with the Christmas tree and other related equipment. Company building layout is fit with easy access for the customers where customer can get in easily and also disable access available. Holiday Inn provides noise free service with nice and unpolluted environment. Holiday Inn has well lighted rooms and well decorated furniture and furnishing.

Chapter: 3.0. Market research.

Marketing research is the organised information process, which ”has to do with the gathering information, processing, analysis, storage and dissemination of information to facilitate and improve decision making” (Seibert, 1973: 128). Every company they conduct expert market research force to do research in market. Research Information could be qualitative or either quantitative information. There is some are the steps which has been consider to do the market research about the customer satisfaction with the provided service.

At the starting of the market research about customer satisfaction of the provided service from Holiday Inn, researcher should take an aim and vision where he wants to go with research plan and the vision will move to you to get goal. Main aim and vision has to be clear understandable and realistic. Once the aim has set company should identify the customers whom they want to do market research. Different customer has different opinion with their own interests and they might give you wrong information so appropriate identification should happen on that level. Research plan has to be according company accumulated time bound. The research has to be within the conducted time because if researcher takes more time from the conducted time, research information may change because of time period. There are fixed budget for the market research so all the expense and activities should make according by budget. Strategically all activities should make in a row so activities will go constantly step-by-step. There should be specifying all the activities for each strategy so research information can handle easily. To get the feedback about customer satisfaction researcher should make a questionnaire form where customer can put their comment and feedback. Researcher may use different distribute channels to send the form to the identified customers like Email, post etc. Questionnaire form has to be short and understandable for the customer. In appendix 1 there is a questionnaire form for customer satisfaction for the service they received from Holiday Inn. By distributing the questionnaire form to the customer and receiving their feedback, researcher can easily get the customer opinion about the service. They might happy with the product but not with the staffs or they were happy with staffs not with the products. Researcher has to outline and execute every feedback from the questionnaire form and find out the exact decision of the satisfactory level. If they are unhappy with the service, what particular reason for that and take action upon them. That unhappiness may relate with the staffs or processes of the service. Proper market research and research result can give a chance to develop the products or services. ”Imagination, judgement and courage remain important qualities for the successful decision maker. Research is the handmaiden of competent management but never its substitute” (Luck et al, 1970: 8). All the information will base on qualitative and quantitative data. Primary data is when all the data has collected about customer satisfaction by research and measurement. Primary research method can happen in many ways such as:

Surveys – completing questionnaires face-to-face, via telephone or online

Interviews – asking and probing respondents to gain detailed responses. Good for open questions.

Focus Groups – moderating a discussion with users. Useful for capturing key concerns and messages

Ethnography – observing customers using products in their natural environments (e.g. at home)

Product clinics and tests – having users try products and give feedback (e.g., taste tests)

Now, researcher should take appropriate information for the purpose of the research and unrelated information should separate from there. This all data has arranged by some other agencies and the data could be found from:

Government statistics – this is great place to start your research if you’re a small business

Public libraries – another good places to find statistical data and information

Chambers of commerce, trade boards, city hall and local government offices

Phone directories and yellow pages

Online and offline market research sources

Chapter: 4.0 Sustainability and corporate social responsibility:

Sustainability and corporate social responsibilities is one of the significant parts in the Holiday Inn. This activities related to the environmental and social responsibilities which performed by the Holiday Inn. Holiday Inn is very sustainable for the environment as they have plan to reduce emission of CO2 in the environment, reduce energy consumption and water consumption by the end of this 2012. Holiday Inn is part of the IHG hotel brands and IHG hotels made contribution in economics and environments over the year. According by Oxford Economics board IHG has made nearly two million jobs in US, UK and Brazilian and made good contribution in their economics. IHG has believed they can make most differences in environment and community by using their corporate responsibility (CR) strategy. The strategy, which is based on new innov

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