Marketing analisys is a fundamental tool in creating successful business. Understanding the market and where the firm is positioned really helps to identify various factors that can affect company and its own clients to be able to determine the feasibility of the product, distinguish task or possible advancement (Morgan, N. , Pritchard, A. 2004). Therefore companies tend to adapt their strategies on business to the marketing environment.
This statement is the examination of promotional strategy of the property described in the event review: Golden Arch Hotel: McDonalds Excursion in the Hotel Industry» from different perspectives. It talks about the types of additional 3Ps of the Marketing Mixture model, determines PEST and SWOT research, indicates the value that is created by this specific firm and evaluates the placing concept of the firm. All discussed ideas are backed with instances from the case study, and some other theoretical information. Such are critically analysed and shown according to different ways of analyses.
2. Findings, Results and Analysis
2. 1. Question 1
Explain the additional 3 Ps of the 7 Ps model and illustrate with examples from the research study. Analyze and describe how each one of those characteristics is important in the success of the Golden Arch Hotels.
(compiled by Jae Woo Martin Jeong)
Generally speaking, 7Ps marketing mix tools have grown to be increasingly more important because the traditional marketing tools 4Ps weren't enough to provide a frame work for thinking of marketing and planning online marketing strategy especially for service establishments (Wilson and Gilligan 2005, p. 6). The excess 3Ps consisting of People, Process and Physical Data will be distinctively discussed bellow with the examples from the case study and a simple graph of these will be shown on Appendix 1.
The first aspect of the extended marketing combine is "People". This implies people who are immediately and indirectly involved with providing customer satisfaction (Blythe 2009, p. 16).
Golden Arch Hotel was operating its hotels under "the motivational job rotation basic principle" in line with the McDonald's restaurant philosophy, which aspires to use the consistent service standards for all the tasks. This is not and then bring customers' satisfaction but also to produce synergy effect through the peak times by assigning employees to different positions and duties (Michel 2005, p. 3~4).
The second dimension is the "Process", which is about how the merchandise or service is sent to clients to please them (Wilson and Gilligan 2005, p. 534).
Golden Arch Hotel was giving high concern on sanitation of the rooms by adopting McDonald's service criteria (Michel 2005, p. 3), which is one of the most crucial factors for the guests' satisfaction. Another recognized process of Golden Arch Hotel was the hotel's a day operated McDonald's restaurant (Michel 2005, pp. 3). a day food and beverage service was very strange to find in Switzerland, however, it allowed both in-house and drive-through guests to have the meal anytime of your day.
The last sizing is Physical Proof, which means the tangible proof of something, such as: the surroundings of the merchandise and services, ambient elements and everything that can be communicated how service has been shipped (Jeong, 2004).
In the situation of Golden Arch Hotel, it appeared to concentrate more on the visitor rooms than any other hotel with facilities for guests' comfort. Its efforts were demonstrated by implementing in-room high-tech facilities such as electronic key, access to the internet and other computer facilities and investing massive amount money to support oversized beds.
Furthermore, it was also offering conference rooms that might be flexibly transformed according to the volumes and the needs of the clients.
In the research study about the Golden Arch Hotel, the key and undeniable role of additional 3Ps in the marketing mixture tools are mentioned rather clear through Golden Arch Hotel's competitive advantages towards its rivals. That is due to precise and affordable use of marketing combination tools of the hotel management.
2. 2. Question 3
The SWOT evaluation pays to in creating a technique that helps an enterprise distinguish itself from its competition. Why do the McDonalds decide to enter into the hotel industry? What were the business's advantages that they hoped to transfer into this new endeavor? Were they able to do that? Why or you will want to?
(Written by Diogo Pessoa e Costa)
McDonald's Corporation made a decision to enter into the hotel industry in the early 2000. This is part of an diversification strategy, which is proven way of creating new growth and also to stay away from complete market saturation. Another important reason was that the chairman of McDonald's Switzerland, Urs Hammer, came from an hotelier qualifications and his knowledge and experience in the business was valued in overtaking such a project. He firmly thought that the showing of knowledge between different restaurants would permit the emergence of new products.
A SWOT Evaluation is a proper planning method used to evaluate the strengths, weaknesses, opportunities and risks involved in a project or a business enterprise. It involves figuring out the inner and exterior factors that are favorable and unfavorable to achieve specific goals and aims.
McDonald's hoped to copy several of their advantages into this home based business.
These advantages included the fact that they provided "fast and friendly" service. The hotel team would therefore contain a permanent employee pool that can implement the regular service standards for each and every task in order to better provide the guests. High focus was presented with to the inside design and structure of the hotel as well as room sanitation and comfort.
The company also used their good relationship using their suppliers and local communities as a marketing strong indicate repair their image after several discoveries of unsanitary practices in McDonald's restaurants.
Several weaknesses were found into this new excursion.
First of all, one of McDonald's biggest problems had to do with their positioning assertion. A four-star hotel in Switzerland means luxury therefore it didn't match McDonald's brand image in any way. Also, most analysts were not very convinced that this growth fit well with the corporation's overall strategy. This is just a test and there is no real opportunity of penetrating other important markets.
By examining comments from customers, you can plainly identify the hotel's main weaknesses. Really the only food available was McDonald's and because the hotel was relatively isolated, you'd almost no likelihood of eating someplace else. Also, the staff did not prove to be so friendly and some guests sensed the hotel was strange and did not like the atmosphere created by the look. Finally, the brand "Golden Arch" had not been chosen carefully since the two words do not translate well in to the German terms.
By identifying the various opportunities, you understand that the hotel has a great potential for success but however, it isn't being used to the best of its capacity.
Since the Golden Arch was an international airport hotel, it might negotiate agreements with airlines or adjoining large companies to be able to preserve market show for layovers.
Due to its proximity with the Zјabundant Messe and the Autobahn, the hotel could set up an efficient online marketing strategy that could also attract Repeated Individual travelers coming from all around the world.
The threats involving such a project come from the hard competition encircling hotels in Zјrich. McDonald's had to compete with well-established hotel chains such as M¶venpick, Hilton, and the Accor Group. Many of this hotels possessed a fine eating, had larger meeting rooms, and were situated either closer to the airport or even to major business centers.
Within 3 years, the 7500 hotels rooms in Zјrich were to be supplemented by around 3000 more rooms. The danger was that the marketplace was reaching over-capacity and this could have negative outcomes for the Golden Arch and the encompassing hotels, both in terms of occupancy and ADR.
Another menace was the actual fact that the Swiss Human resources were blow drying. Nobody sought the do the simple and dirty careers (except for foreigners) and it was almost impossible to find chefs or front office personnel. This conditions favored labor piracy.
2. 3. Question 4
According to theory, what is value and exactly how could it be created by way of a hospitality organization? How exactly does the Golden Arch Company try to create value for its customers? Did they succeed? Illustrate with illustrations from the research study.
(Written by Malgorzata Szal) (referrals?)
Hospitality companies' strategies nowadays are consistently expanding through new tendencies and styles that are instituted by people internationally. They make an effort to create new and ground breaking marketing strategy to provide their brand a substantial meaning. In this particular industry, client's satisfaction is the most important target, therefore companies invest in their benefits and ideals in order to keep their pledges by delivering successfully. Because of this process, people have the ability to distinguish one brand from one another and the decide which company supplies the most to them.
Every potential visitor possesses different beliefs, which are determined by factors such as culture, practices, birthplace and family position. Hotels throughout the world try to attract and satisfy the largest part of the market goal by researching, understanding and examining their needs and therefore provide them with what they really want. Due to that, value is mainly created through packages, which means products are mixed and sold together with service provided. Usually they include accommodation, food and entertainment. Such mixture increases significantly the worthiness of the service products.
"Once we understand the essential laws of the physical and public world, we can examine, plan and control them" (Smart, 1992)
Golden Arch Company before getting criteria of four actors hotels had examined all customers' needs. Because they decided to entice businessmen their design was centered on this kind of guests. They provide many benefits to create value for his or her client which are shown in physical facts part of Appendix 1.
Bith hotels of Golden Arch company can be seen easily. People vacationing by car may use the underground auto parking or above floor car parking and eat in their McDonald's restaurant, available a day which is abnormal in Switzerland. The hotel's designers tried out as well to boost friends' satisfaction by creating a distinctive design of the building and to give an impression of much larger rooms by positioning the toilet behind a wine glass door, which unfortunately raised complaints and the doorways needed to be replaced.
All the managers and employees were motivated to succeed plus they supplied. Their occupancy rate is not high however the hotel started to make profit from the first month of its procedure. Unfortunately, the rate of returning guests is suprisingly low. People are not satisfied of the complete idea of a four star hotel run by McDonald Company. Daniel Deutscher, the owner of DEKA Treuhand was very surprised when he heard of this investment. It really is hard to believe and picture the McDonald's hotel to attain four stars. You will find expectations that are hard to hide. Some friends' grievances were about the service quality in the front desk saying it is very poor (Michel 2005, p. 7) and about the bad beautification of the lobby, pub or even the bedroom influencing the atmosphere (Michel 2005, p. 6)
Golden Arch Company tried out to combine its' popular junk food brand image of McDonald's with four-star luxury hotel brand. According to the statistics shown in exhibits in the event study, this notion has not been a success as forecasted.
2. 4. Question 5
Explain the concept of Positioning and summarize how The Golden Arch Hotel was situated in this very competitive market. What market segments was the hotel expecting to reach? Does the company be successful? Why or why not?
(Written by Kateryna Krupka)
Positioning is thought as arranging for a product to occupy an obvious, distinctive, and suitable place in accordance with contending products in the mind of consumers» (Kotler, P. , Bowen, J. T. and Makens, J. C. 2010). Based on the same creators, such needs to be designed taking in account customer value variances, and therefore either increasing the benefits of the product, either decreasing a few of its costs.
As it is explained in the case research, it was decided to position the Golden Arch Hotel as a 4-legend property with luxury service and some business facilities. The hotel almost certainly attempted to reach the customers, coming from the airport for a evening stay, as well as prosperous people with a need of advanced comfort, coming for the meetings or meetings. However this were done unsuccessfully due for some factors, analysis of the is provided onwards.
One of the very most significant issues with regards to a hotel property is eating out facilities. In discussed case McDonald's restaurant was the only place for the friends to eat, that will be enough for the people who are staying instantaneously, but appear to be not appropriate for the clients who stay longer. Furthermore, if the targeted customer was likely to stay some times entertainment facilities should have been provided, but this was false.
Another important point is that Golden Arch had some of the additional facilities such as seminar rooms and mattresses that adjust their position, but didn't fulfill a few of the basic needs of its customers. Among these is need of food and refreshments, as it was discussed before. The other is basic safety need that was not fulfilled due to hotels' location close to the top avenue and bit of people around.
However, according to 1 of the quests, the costs for the rooms were of high range. This also indicates that wealthy individuals were aimed to be drawn. Meanwhile guests were complaining about not getting immidiate service, needing to wedding ring the bell for the receptionist to come, as well concerning ask for the chance of experiencing rooms sold at a better rate. Furthermore there was a predicament decribed when the friends were plainly at the positioning of cheaper post 9pm walk-in» rate, and were not told that such posibility is accessible. Furthermore these costomers were advised to buy three rooms for five people at the full price. Obviously such suggestion did not satisfy their targets. This frame of mind towards clients damage reputation of the property and impacts its setting in a poor way. Thus, it could be generalized, that the facts in the merchandise have to coinside with the image drawn by positioning.
Additionaly, inside the rooms there have been many signes indicating that the hotel belongs to McDonalds company, however from outside this is false. Based on the appendixes of the case ctudy, the emblem of the hotel is different, and the name does not have McDonalds» in it, furthermore, it is silently located by the medial side of the street. These should probably be done vice-versa, as the signs and logo design might draw in the guest to the property from outside and seem not to be needed inside of the rooms in such variety.
It it suggested that If the business promises increased value, it must then deliver increased value» (Kotler, P. , Bowen, J. T. and Makens, J. C. 2010). Inability of compliance of this is just about the reason of unsuccessful placement of the Golden Arch brand. The image, mood and service are seem to be transfered from the McDonalds restaurant insted to be developed specifically for the hotel. Nevertheless McDonald's brand statement is Everyday affordability» (MacDonald 2008) and the Golden Arch meant to be luxury, however both of these types of brand do not normally entice the same market. Therefore some issues were not addressed properly, such as satisfying basic needs of the guests, selling accommodation at a cost that corresponds the amount of its facilities and providing appropriate service.
In a competitive marketing environment, located near to Zurich airport terminal and A1 highway, Golden Arch hotels seemed to be successfully at putting into action McDonald's service standard to their hotels, high-tech facilities and unique design features.
These were enforcing the image of the house and helping to sell its services. However poor client satisfaction as well as poor positioning resulted in destruction of the brand image in the intellects of clients.
After the analyses were done, it was accepted that we now have some changes that should have been done by the business in order to improve such situation. Firstly the company must have re-evaluated its' service standards before putting into action to the luxury segment. Subsequently, they must have implemented impactive service audit program. Furthermore they might well have matched the design with the category of hotel and type of customers. Finally, the hotel must have either repositioned itself as a lower-class property, either added some facilities that match 4-legend range, such as, for example, one more restaurant.
(Michel, S. 2005)
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