International Marketing Plan

Contents 1. Introduction ............................................................................................................................ 3

2.1 Situational Analysis ............................................................................................................. 3

2.1 Macro analysis ................................................................................................................. 3

2.2 Micro analysis .................................................................................................................. 4

2.3 Market analysis ................................................................................................................ 4

2.4 SWOT Analysis of boutique luxury hotel ....................................................................... 5

2.5 Competitor analysis ......................................................................................................... 6

2. Summary of organisation’s current international marketing practice.................................... 6

3. Geographical market/opportunity with justification .............................................................. 8

3.1 Supporting rationale for market selection ........................................................................ 9

4. Recommended marketing segmentation, targeting and positioning strategy ...................... 10

5. Identification of a significant issue which will affect the overall strategy .......................... 10

6. Recommended promotional strategy with supporting marketing mix ................................. 11

7. Risk assessment of the implementation of the promotional strategy ................................... 12

References ................................................................................................................................ 13

1. Introduction

This assignment will focus on the international marketing of travel and tourism industry with

particular reference to a single destination i.e. Dubai. It will highlight to understand the

scoping developing the hospitality sector in particular and provide the justifications with

reference to the sectoral analysis and economic climate of the region and the country. The

sector chosen is hospitality and the hotel type chosen is luxury boutique hotel which is

typically categorised by the class of stylish small luxury hotel which is based in a strategic

urban location. The categories of the small luxury hotels normally have a range of rooms

from 10 to 100 and the accommodation being upscale with unique settings (Ander and

Kapoor, 2010). The total numbers of hotels in Dubai which comprise of all star categories are

467 as of 2016, which also comprise of a number of hotel apartments buildings at 205. The

aggregate number of rooms is 75,165 and hotel apartments are 24,847 that show the extent of

last two decades of intensive activity (Dubai Infographics 2016).

2.1 Situational Analysis

2.1 Macro analysis

PEST:

This a broader classification of the environmental indicators and for the chosen destination is

Dubai the construction hub for the last several decades is gradually shifting towards tourism

Political: The government is stable and has initiated reforms to chart a growth in order to

create business hubs in middle east to attract investment in corporate world and drive

environmental sustainability as oil producing nations. So, there is evidence of rooms and new

hotels coming up as the main driver of economic growth came from infrastructure spending

by the government and the private players in order to boost tourism sector.

Economic: The current economy in Oct 2016 showed an increase in inflation at 2.67%. The

housing, water, electricity, gas and fuel increased YoY 2015-16 by 0.19% that affected the

cost of living. The prices of the hotel and the restaurants have also increased by 0.10% adding

to the total aggregate cost factor (2015-16 MiddleEast hotel RevPAR forecast, 2016).

Social: Dubai has been hosting the largest gateway business conferences (99), exhibitions

(60) and has had over 1,031,339 visitors alone, with delegates totalling for conferences

totalling to 51,186 (Dubai Infographics 2016).The has mixed population with expats and

locals, forming the major segmentation to expand the hospitality market.

Technology: The use of IT has enabled governance, while telecommunication infrastructure

and penetration has been at par with the rest of the world. The technology in engineering is

mostly transferred and three is over dependency factor.

2.2 Micro analysis

The hotel in the luxury segment in Dubai has branched out to boutique with well known

names like Armani Hotel Dubai, and traditional palatial residence transformed into

downtown Burj Khalifa. This creates distinctness amongst the hotel in terms of offerings

though location may not be very upmarket with prices ranging from AED 170-1500 per

night. It has all which luxury five star hotels offer but there is increased amount of

discreetness into stay away from prying eyes. All are IT enabled booking, CRM enabled,

featuring in travel portals with room availability and dynamic pricing.

2.3 Market analysis

There are many factors that need to be considered for Dubai and especially boutique hotel as

completion of a new hotel will not affect the market immediately. There are, however, events

like FIFA in Doha, Qatar a neighbouring nation which is fuelling the hype of future need for

huge volumes. There has been a supply and demand mismatch in the 2016 hospitality sector.

It is approximately 2% decrease in occupancy rate in Dubai at 77.9%. There is a 10.3%

decrease in the ADR (average daily rate) of the rooms which stands at AED 67.58 while there

are 12% decrease in revenue (RevPAR) per available room at AED598.09 (Dubaihotstats,

2016). The Dubai economy is based on the annual conferences meets, exhibitions which have

dropped drastically due to the end of the year and indicators of the New Year tourists for the

December (Dubai hotel report, 2016).

The two to three-year new brand name gestation period helps to spread brand name, and built

a customer base. The Dubai market in terms of hospitality will be gaining this year after a

brief fall in 2015, and forecasts of 6.6% in RevPAR. The RevPAR is operations metrics, that

is an indicator of hotel’s average daily room revenue divided by the occupancy rate in terms

of room count and a number of days in that stay period.

Figure 1: RevPAR in Middle East cities

The statistics of Dubai as a city in terms of occupancy has been forecasted to increase 83.3%

with an ARR of 297.8 (USD millions), RevPAR for 248 (USD millions), TRevPAR 413.6

(USD millions), Payroll 21.9 % and GOPPAR (gross operating profit per available room) at

191.7 (USD millions) (Dubaihotstats, 2016).

2.4 SWOT Analysis of boutique luxury hotel

Strength: The boutique luxury differentiates from the rest by offering a value proposition.

The bouquet hotel is cosy, efficient offering the exemplary operations at a price which is

difficult to resist. It banks on experience that is dependent on employee delivery skills.

Weakness: The difficulty is number of rooms being less, does not provide scope for profit

margins. Thus competing with bigger luxury brand names is tougher. The hotel is also not

strategically located which is issue for many guests.

Opportunities: Understanding the power of social web2.0, using to connect can yield more

businesses based on relationship approach rather than luxury branding to beat competition.

Threats: Innovation through differentiation now generic in boutique hotel so the ability to

stand out from the competition is tougher every day for the hotel.

2.5 Competitor analysis

The market size is expanding and the growth seems to be unabated as capital requirements,

profitability and future events of the hotels are bright in Dubai. The entry barriers are the

huge cost, finding the most capable construction firms to be able to translate the concept at a

strategic location and the post establishment challenges are capacity utilisation. There were

44 in 1990s and now over 460 in Burj Al Arab has showed how the first move advantage by

the biggest luxury hotel brand names have established their operations.

The competitors are Holiday Inn, Ritz Carlton, JW Marriott, Westin, ParkInn, Claridges,

Hilton, Oberoi, to name a few. However, bargaining power of the supplier and the customers

are more to align backend operations to make SLH functional. The SLH in its bouquet niche

category is trying to offer a substitute of home away from home to differentiate the luxury

hospitality sector class as well.

The competitors (Palace downton Dubai, Armani hotel Dubai, The Address, Vida downtown,

XVA Art hotel, Per Aquum Desert Palm, Melia Dubai, Hues Boutique hotel, MediaOne

Hotel, Fortune Boutique hotel) are too many and have huge room capacity which is

complemented by the global spread and brand name (Laplume et al. 2008). There will be

automatic referrals and bookings from abroad and the ability to differentiate the stay from

others is the key to success. The bigger hotel chains have bigger financial capability in

customer acquisition through agents, paying more cuts and better range of amenities like cars,

food, health and entertainment options.

2. Summary of organisation’s current international marketing practice

Organisation of choice: SLH (SMALL LUXURY HOTELS)

Website: www.slh.com

Strategic Purpose: The boutique hotel believes that smaller is better and the service quality

to render the luxury touch, unique pristine location creates a lasting impression. The concept

hotel is an out of the trend concept that has successfully helped since 1989 to set footprint in

more than 80 countries, with over 520 luxury locations.

Awards: The hotel brand SLH has won ‘World travel awards 2014 & 2015’, along with

World’s leading luxury hotel brand website in 2014, British travel awards in this year (2016)

speaks the manner in which SLH has carved a niche in this luxury boutique hospitality

segment.

Marketing Strategy:

It currently has divided the planet into Europe, Asia, Americas, Caribbean, Middle East,

Indian Ocean, Africa, Australia. The product being infrastructure needs careful selection in

downtown, decorate as per SLH standards, rendering Dubai cultural chicness in it.

Place: This unique geographical segmentation is mostly related to the global regions, and

further segmenting of smaller regions is strategic and location-based approach (Zoot and

Amit, 2008). The financial accounting happens continent wise, which is again segmented

further for localised advertising and positioning of the place/location.

Price: Offer the midrange AED 500-900 offer dynamic pricing and offers club membership

(special member, Loved member, Honoured member) to all who have checked in at least

once, and free upgrades to heighten their expectation level to be delighted.

The promotion happens online using blogs and the social media platform (Facebook, twitter,

Youtube, Instagram, pinterest (Aaker, 2010). The approach is rich in media that enables SLH

to showcase the hotel experiences through the guests engaged in activities in the surrounding

locations marketing. It clearly lays down terms & conditions on website, FAQs, encourages

travel agents to register and generate leads, offering lowest rate guaranteed to the prospective

guests. It has dedicated backend, email and phone support to handle queries.

Positioning: The brand SLH has positioned to the internet savvy millennial and driving the

first hand experiences of customer to be showcased through testimonies, picture stories to

form positive cues from prospective people.

Physical evidence:The hotel has been selective about the location and personalisation at the

highest level that is cleverly being integrated through web and apps driven reservation system

(Anderson and Vincze, 2008).

People: The world class service and out of the world experience is testimonies is adding

value to the primary source of information about its brand, services and meeting customer

expectation sets. The media relations are strong while CSR using partnerships and charities

forms a subtle angle to reach concerned consumers.

Process: It is, therefore, using IT to penetrate global markets, multiplying the dissemination

of information in the social media platform, operations (internet, intranet) in fraction of

seconds.

3. Geographical market/opportunity with justification

Dubai is the core of the Middle Eastern business and leisure activity. Though SLH has

presence in three cities, Lebanon, Beirut and Riyadh the absence in the city of hotels is a

weak strategy. Though the penetration level is high with three cities which dot the Middle

East, the Dubai factor has been in the plan and not executed due the SLH not finding the right

location, price as per investment. The market entry strategies are simple as FDI (foreign

direct investment) with or without the local business partner is possible provided SLH sets up

a subsidiary in the nation, which is tax free in earnings (Baker, 2007).

This is critical as higher investment in Dubai for a select location (downtown) will lead to

slower realisation of ROI (return on investment) for SLG over a period of time. The

opportunity still looms large though most of the prime locations and landscaping has been

occupied by biggest luxury hotel brands in Dubai. There are a select group within the super

rich target segment who would prefer small luxury boutique hotels and differentiation of

luxury bouquet based identity in Dubai (Rook, and Fisher, 2007). The SLH can cross sell the

existing database of customers to push the occupancy level and also offer corporate

conferences, exhibitions as a package in Dubai or drive through Dubai based travel and tour

agents for occupancy achievement targets. So the market is huge and tapping the retail, the

corporate, the expats segment, the JV (joint venture) firms are key thrust areas which need a

dedicated marketing dossier from the hotel to reach new target market (Reid, 2009).

3.1 Supporting rationale for market selection

The market for boutique hotels in Dubai is a narrow one as the awareness of luxury boutique

hotel concept is prevalent in UK, US, EU markets (Shih, 2006). The bigger better luxury top

hotel brands in Dubai has been successful in first mover advantage and is seemingly very

competitive with sprawling infrastructure. The infrastructure is complemented with range of

world class services that supports opulence. It is a great barrier as bouquet is more

personalised luxury at personal scale, separating the bigger crowds of rich category people

(Henry, 2006).

To align the existing off beat location of SLH and make a mark in the Dubai market, meet the

RevPAR rates (underprice 10-15% lower) is an option. It has low cost of operations being

smaller in structure, a number of rooms which makes it ideal to pitch for Dubai and yet carve

a niche in the luxury hotel market. There is relatively easier market entry process that could

have been exploited by SLH as all of Dubai is tax free against the foreign investments made,

earned that country.

The issue is about luxury market hospitality perception and the customer readiness to accept

the boutique concept in a superfluous luxury hotel brand market needs awareness and

education complemented by engagement. The maturity curve of luxury segment has peaked

and most of the hotel constructions maturing into full functional hotels therefore widened the

outlook and perspective. Thus, boutique luxury can be a self-actualisation element for

customer motivation in choosing the hotel in Dubai and SLH is bound to score on that.

The rationale for entry is therefore balanced on the notion of creating sub-strategies in the

luxury hospitality segment where the success depends on the cross selling the existing

database and local agent based push for room occupancy at lower than prevailing rates. This

is a value added proposition for many rich customers who seek novelty and is motivated

enough through self-actualisation for stay in a different luxury hotel that is small,

personalised and separates it.

4. Recommended marketing segmentation, targeting and positioning

strategy

STP is a strategic approach applied in the marketing model: where segmentation is the buyers

are divided into groups, targeting is a group of customers that has well defined target market.

The positioning is the final process which the firm is able to assess vis a viz competition from

the market.

SLG need to create sub-segments in the luxury hospitality customer base with its unique

value driven approach driven through Web2.0, to differentiate its bouquet offerings. The

strategy is to attract the existing customers in the Dubai market using the differentiation

approach the offerings through the positioning route (Henry, 2006). Currently, the frugal

operations that are far more smaller in scale, runs on a no frill operations budget compared to

the bigger brands. The promotions and the customers eWOM (electronic word of mouth) a

blogging link embedded in its official website should engage customers. This compulsory

post stay experience blogs for different locations and including Dubai will gradually be rated

to create impressions for readers via transparency route (Santos, 2010).

At present, it offers an automatic upgrade to suite for the registered members joining a club

membership. This is driven by the IT, website and social media that creates a rippling effect

on the social circles. The second approach to increase the Dubai occupancy for the SLH is

through asking the local Dubai travels and tour operators to provide leads for a unique

differentiated luxury experience (Reid, 2009). This is persuasion and direct marketing which

can convert the luxury guests footprints to test the ambience on a complementary pricing.

The above model of social media blogging, Instagram driven pictures will raise queries and

interest level of customers about SLH, while the agents will convert the prospects into leads

for percentage of bookings done per month. Segmentation should be on the existing business

market, targeting done through digital media and third party. Positioning should be done with

focus of differentiation in the luxury super rich customer segment.

5. Identification of a significant issue which will affect the overall strategy

The ability to create inroads in the stronghold of the Dubai luxury hospitality segment and

create a niche luxury bouquet segment will need a strong positioning strategy. This is the first

and the core challenge SLH has to meet headlong in order to start-up the operations. The use

of multiple strategies to substantiate the efforts can be planned over a period of time. The

gestation period of the start-up and realisation of Dubai population, expat population will

require time which can be steadily covered up using social media on a war footing (Kotler et

al. 2009). However, creating awareness will not guarantee the interest or conversion of the

customer. Thus, a sub-strategy in the enquiries and publicity through the sustainability (CSR

corporate social responsibility) efforts can be done (Reid, 2009). The construction industry

and the pollution, waste factor is a big issue in Dubai hence is taking the route of honest

branding using CSR activities/events to position SLH in the customer minds.

6. Recommended promotional strategy with supporting marketing mix

The SLH Dubai can be clubbed with the corporate package for the annual conference for the

whole team, exhibition firms at global level, corporate having JV with local player and

foreign origin as the target market. This is a ploy which SLG can advertise in the global

website to attract the leads from the different continents it serves. It then needs to convert the

enquiries of different continents in the call centre/ email replies offering the new

complementary plan for Dubai creating the engagement of the customers.

The marketing mix which is essential for the SLG Dubai needs a variation in each marketing

‘P’ intensity over time through the following manner;

Promotion: the most important strategy designed to create impacts on digital platform and

also physical through tours and travels agents for the first six months will spread SLG

presence, rates, options of differentiated luxury in a boutique concept.The social media

platform, blogs, pictures on instragram, video blogs of the customer’s cherished moments on

Youtube to be shared creating rich communication glimpses of moments which are for viral

marketing.

Price: Definitely the most tempting option for the value added personalised luxury service

offered by SLG Dubai needs customer to be compelled in order to weigh the options. Price

for weekend stays for leisure is an option to attract local, expats while corporate discounts for

smaller firms, SMEs in Dubai is an apt strategy. The price is related to operations cost factor

so the low cost operations strategy in SLG hotel with IT based promotions are initiated. This

needs to be programmed for call centre, website and agents through training and cheat sheets

to attract the customers for increasing the footfalls.

Place: online emphasis more for first six months while the one to one relationship marketing,

or database CRM marketing for the employees, third party tours and travel agent is the only

way to engage, connect and disseminate the information about SLG Dubai. Social media

campaigns are frugal and high speed penetrators in the online platform bombarding the

hospitality scenario in Middle East. So going online will help to reduce the hotel advertising

expenditure.

Product: the product is the SLG brand which is a bouquet hotel with infrastructure, strategic

location and distinct services which follows with it till the customer stays in the hotel. The

product needs to be differentiated in terms of positioning where the luxury in mass and

luxury in isolation with exclusivity is

People: The SLG employees and key management resources is going to make a huge

difference in the manner in which each of the marketing mix strategies will be executed in

Dubai. Internal marketing, cross selling and one to one marketing for the guests backed by

product training about amenities, rates, USP is key to make a all round impact of

differentiating the brand will equip the call centre staff as well.

Process: The backend critical process for the front end web based booking, and assistance,

along with call centre, walkins at tours and travel counters needs an integrated software in the

intranet that will process all the requests for sales, customer service, buying travel insurance,

onward journey, local sightseeing. The process approach will help SLG to map activity time

based, eliminating work load,

7. Risk assessment of the implementation of the promotional strategy

The political risk being nil, with tax free business environment that bigger risk involved is the

ability of SLG is to get heard and gestation period of six months covering operational

expenses, utility bills, rentals, licenses will be continued as per contract. However, the risk

assessment and marketing audit is necessary. The use of process approach helped to

understand barriers in each activity and helped to redraft the promotion strategy on war

footing which helped to avoid role conflict, surer delivery in terms of operations daily plan.

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