Assignment on MARKETING STRATEGY OF MALMAISON HOTEL

Introduction:

Malmaison is a hotel brand in the United Kingdom. The group operates 12 hotels and is wholly owned by MWB Group Holdings. The hotel brand was formed in 1994 and is named after the Chateau de Malmaison on the outskirts of Paris. The chain is owned by NWB Group Holdings. Their brand premise is “Hotels that dare to be different”.
The group also owns the Hotel du Vin hotel brand. Malmaison had a turnover of £60.271 million in 2009. There are 12 hotels located in Aberdeen, Belfast, Birmingham, Edinburgh, Glasgow, Leeds, Liverpool, London, Manchester, Newcastle upon Tyne, Oxford and Reading.

Ever since 1994, they have been picking up gongs and accolade from the hospitality industry and most importantly their greatest fans and critics - you their guests. Not one to blow our own trumpet but we thought you'd like to know more about some of the shining trophies they have on their shelves at the moment...

Ø  Malmaison Oxford - Hotel of the Year - Group, Caterer and Hotelkeeper Awards 2007AA Hotel Group of the Year 2006 – 2007

Ø  Malmaison Oxford voted a Hot New Hotel by Conde Nast

Ø  Malmaison Oxford - Winner of the Best Hotel Bar, London and the South presented by the Theme Bar & Restaurant Awards

Ø  Malmaison Leeds - Winner of the Best Drinks & Wine List Award presented by the Leeds Restaurant Awards

Ø  Malmaison Leeds - Winner of the Yorkshire Tourist Board Hotel of the Year 2006

Ø  Malmaison Newcastle - Gold Award Winner for Large Hotel of the Year awarded by The North East England Tourism Awards 2006

Ø  Robert B. Cook - Best Manager - Caterer & Hotel Keeper awards (www.malmaison.com Accessed 24/02/11)

The aim of this report is explain the marketing strategy of Malmaison Hotel within the hotel market. To complete this report a detailed PEST and SWOT analysis of Malmaison Hotel has been carried out, and the current target segments of this hotel have been identified. In this report the author also evaluated the Malmaison’s current marketing mix, and basis of these the author recommended for the further improvement of this hotel.

Literature Review:

“The boundaries within which organizations can operate are frequently set by legislation – from the ingredients they can legally put into their products to the buildings that their employees are allowed to work in.” David Mercer (1996)

Analyzing the political situation, the Labour party is in power and recently they have made some changes to their dossier due to the “Credit Crunch”. The political changes have bought a big impact on Malmaison Hotel   as changes to legislation mean they will have to adapt and make amendments to abide by the changing laws. VAT has been reduced from 17.5 percent to 15 percent from 1st December 2008 until 31^st December 2009, where Malmaison had to review their VAT goods and service charges.  According to Mintel (Impact of the Smoking Ban – UK- December 2007) on 1^st July 2007, the UK became the largest population of people affected by a smoking ban. The smoking ban had both positive and negative impacts on hotels. After 9/11 the government of United Kingdom imposed strict visa policies for the visitors due to terrorist attacks, it also bought a huge impact on hotel industry.

 The changes in economic legislation will affect The Malmaison in the UK as new higher rate of Income Tax of 45 percent will be introduced for incomes above £150,000. This suggests the luxury client market will be affected as they will not have as much disposable income as previously. Another factor which will contribute to this negative outcome is that the personal allowance will be restricted to half its value for those with incomes over £100,000 from April 2010.

The social analysis presents that there is a potential target market of clients which will be older clients due to the ageing population. . According to Mintel (British Lifestyles – March 2007) the UK population is an ageing population,

The third age group is becoming a growing market for all the businesses in the UK. There is a recent increase in the amount of people thinking more about what food they eat and the amount of activities they do. Malmaison have ‘healthy’ options on their menu as well as a fully equipped gym in Hotel.

Technology is becoming a major factor affecting businesses because it is always excelling. The Malmaison is heavily depended on technology , guest are getting the facilities of on line booking, on line reviews, telephone conferencing, twenty four hour internet access, modern gym equipment and other technological advantage.

SWOT Analysis of Malmaison Hotel:

Analysing the SWOT it has been established that internally the Malmaison has many strengths. Malmaison is a recognised brand around the world, known for its boutique decor and its impeccably high standard of service. Malmaison’s reputation around the world is based on a luxurious place to stay where guests can relax and be taken care of in beautiful, stylish environment. Guest is highly satisfied with the Malmaison’s product and service.

The current credit crisis has created some difficult challenge for the Malmaison, as the high costs associated with maintaining the company’s current position may not be effective in leveraging the company’s business. Malmaison’s advertising and promotions activities are very small, they are not very active within the local community, because of this they might lose customers outside of their target group. Malmaison’s staff training plan is very lengthy and expensive, they also got high quality of furniture and decor, the cost of running Malmaison is comparatively higher than other budget hotel.

Malmaison could bring more advertise campaign and offer sales promotion in their marketing plan, by that they will not lose the potential market. Malmaison could target the European market due to the current exchange rate, which is encouraging Europeans to travel over to the UK.

Due to the credit crunch the growing demand of budget hotels are up going, in this point of view Malmaison is struggling to cope the competition with budget hotels. Again because of economic downturn, people are bit reluctant about their holiday.

Target Segments:

Considering the analysis of the SWOT current target segments for Malmaison can be identified.

 Geographically Malmaison hotels are all based in cities across the country; this makes them accessible to most people via public transport. This also means leisure and business travelers are targeted by Malmaison.

According to Buyer Behavior base of segmentation Malmaison is very much concern about the need of their valuable customer. In terms of business travelers, they would be looking for a comfortable hotel with all the amenities they need. Malmaison provides high speed wireless internet connection as well as conference and meeting facilities. Businesses may want to impress overseas clients, in order to do this they could book them into this superior hotel such as Malmaison. According to Mintel (2008), in 2007 47% of hotel stays in the United Kingdom were for Corporate and Conference reasons compared to 20.7% Leisure breaks. Target segments of business travellers, group business and the leisure/tourist markets are quite stable but it can be seen that there are more opportunities in the leisure/tourist markets.  Malmaison offer a relaxing sanctuary for leisure travelers to spend a long weekend, they have gym facilities, restaurant, bar and individually decorated rooms. Malmaison gets busy with the business customer on week days and for week end they look for family and leisure customer. So Malmaison’s another target is the couple who are on leisure trips, according to Malmaison’s website the hotel offers ‘Love Suite Love’ for leisure seeking couple. From £195 per night a couple can enjoy a glorious suite, champagne on ice, chocolate dipped strawberries, aromatic oils and candles, a chilled Mal CD and that all important champagne breakfast in their room. (www.malmaison.com Accessed 24/02/11). Malmaison does a lot of activities on different occasions such as Mother’s day, Father’s day, Valentine ’s Day, Christmas Party, New Year Eve etc.

According to demographics base of segmentation, male and female both business travelers and leisure travelers are targeted by Malmaison. Malmaison are likely to target the following stages of the “Family Life Cycle” according to Murphy and Staples (1979), Bachelor, Newlywed, Full nest III and Empty nest I. Malmaison targets all age group who has a reasonable income and depending on their career success. Malmaison would target Grade A (professional) and Grade B (professional Status) citizens.

Marketing Mix Analysis:

The Marketing Mix is a term used to describe the combination of tactics used by a business to achieve its objectives by marketing its products or services effectively to a particular target customer group. This consists of the product, price, place, promotion, physical evidence, process and people. Analysing the marketing mix of Malmaison Hotel the most relevant to the identified target segments are price, product and people.

Price:

The price is the sum a customer pays for the product. This is determined by a number of factors including market share, competition, product identity and the customer's supposed value of the product. The business may increase or decrease the price of product depending on the economic situation as well as demand. Malmaison Hotel set their pricing strategy on the basis of their internal and external business factors such as marketing objectives, marketing-mix strategy, cost and organization for pricing, nature of the market demand, competition, other environmental factors, such as government, and economy. The success behind Malmaison is, they follow the ‘Premium Price Strategy’ efficiently on their pricing plan.

The price for business customer are varied on different factors such as how much they are willing to pay, what types of rate their competitor are offering, how long they are planning to stay, are they booked any meeting room or banquet ball room in house or not, the price are also set on the websites after looking at the demand factor. The prices of the room are set after some research made by Marketing department so that the hotel will always remain the first choice of guest when they compared the price with other hotels.

Product of Malmaison Hotel:

In the hospitality industry product is a tangible object or an intangible service. The Core Product is the physical venue where the customer’s needs are satisfied by eating, drinking or sleeping. The Actual product includes the perceived quality of the brand, where Malmaison is recognized for a high standard of service and consistency. Malmaison is the luxurious place to stay where guests can relax and be taken care of in beautiful, stylish surroundings.

Malmaison offer the great food and great wine, according to Malmaison website “Divinely tasty cuisine prepared with incredible local ingredients.” (www.malmaison.com Accessed 29/02/11)  The food is sourced from within 30 miles of every hotel. The Wine Voyage of Malmaison which gives guests the opportunity to taste wine from around the world.

Malmaison is a unique place for meeting, conference and private function. All the meeting and conference rooms are fully equipped to fulfill the customers need. “In these times your business needs an edge. All twelve of our hotels have meeting rooms that are perfect for business meetings, presentations, private parties and private dining. And because your event should be pure theatre with absolutely no dramas, you will always have a dedicated meetings coordinator to ensure all runs smoothly.”  (www.malmaison.com Accessed 29/02/11)

 GYMTONIC, LE PETIT SPA, CAFÉ MAL are available for both business and leisure guest, gym are fully equipped with fitness DVDs. Aberdeen, Birmingham, Newcastle  and Manchester Malmaison hotels are offering a fantastic SPA treatment in their LE PETIT SPA.

Malmaison is pet friendly hotel; guest pet can stay in the hotel for an extra £10, for this pet get a bed and a feed bowl. “MALMAISON IS ONE OF THE MOST PET FRIENDLY HOTELS IN THE UK. He loves you. You adore him. It’s right and proper you both enjoy Mal life together.” (www.malmaison.com Accessed 29/02/11)

People of Malmaison:

The People element of the marketing mix refers to the how an organizations staff interact with customers and other stakeholders during sales and pre and post sales. Employees play a vital role in any service industry because of the direct interaction with customers.

 Malmaison recruit the right people to suit their business. A lot of time and investment spent to develop their employees. By this they make sure that Malmaison staffs are the best staff of entire hotel industry. Malmaison have a designed develop programs, that will help develop their future leaders and provide a opportunity for people to grow with Malmaison. According to Malmaison website -“We want you to be the best. That's why we provide a whole range of training and development opportunities once you're on board”. (www.malmaison.com Accessed 29/02/11)

Malmaison is being awarded for their career opportunities, relating to the current movement of employee development. Malmaison gained the “Best places to work in Hospitality 2008” (www.malmaison.com Accessed 29/02/11) awarded by the Caterer and Hotelkeeper.

Recommendations for Malmaison Hotel:

Short Term:

Malmaison could introduce the free wi fi access in the entire hotel for 24/7, (the current offer is “Wireless internet is free for up to 30 minutes anywhere in the hotel, or is available for longer periods at the following rates: 8 hours - £7.50, 24 hours - £10” -www.malmaison.com Accessed 29/02/11) by this more business traveler will be encouraged to stay in Malmaison. They also could provide the facility of valet parking and free parking for the in house guest. Malmaison should boost up their public relation and personal selling techniques, sale promotion such as they could send amenities to all in house VIP guest, hotel could provide free breakfast or SPA coupon to regular customer etc. Hotel should introduce new menu with different types of foods (Chinese, Indian and Italian) every one week as this will help customers to have a variety of foods instead of going to other restaurant. Most of the Malmaison Hotels are city center; they are bit far from air port. Malmaison should provide free shuttle service air port to hotel and hotel to air port.                         

Medium Term:

Nowadays people are very health conscious. Considering the health conscious society Malmaison must ensure the restaurants within their hotels offer a menu with an extensive healthy option. All the Malmaison hotels have not got fully equipped Gym and SPA Swimming pool. Malmaison should consider establishing Gym, SPA, Swimming pool to all of their hotels. Some of the Malmaison hotels car park is not specious, some of the car park bit far from hotel, they should refurbish their car park and make it more convenient for their guest. Economical recession is going on all over the world and UK economy is suffering more than other countries, at this moment Malmaison should target medium earning level people.

Long Term:

Malmaison can concentrate to budget market. In future they could introduce some Budget hotel, by this Malmaison would come in to broader market. It will help them to keep the competition with budget hotel brands. Again most of Malmaison hotels are in city center, Malmaison should introduce some of their branch by the air port. Customers always want variety and look for entertainment, so Malmaison could attach Malmaison Holiday Resort, Malmaison Honeymoon Resort, Malmaison Adventure resort, Malmaison Casino etc. The hotel should go under refurbishment in certain years and it needs modernize and up great the guest rooms, lounge and other technological areas.

After analyzed the marketing report of Malmaison hotel, it could be say that Malmaison is currently successful hotel brand within the hotel industry. They could increase their sales and profit to follow above recommendation.

Conclusion:

Malmaison is one of the luxurious and gorgeous hotels among the present market. Sometimes clients complain regarding their brand quality like: most common complaint was that this originally grand and chic hotel is now very tired and in urgent need of an update, several guests felt that it was overpriced for what is actually offered and did not represent good value for money, although the Malmaison brand is synonymous with contemporary chic, some guests felt that the rooms were nothing special and were disappointed in this respect, some guests felt that this hotel did not reflect the Malmaison brand. Though they have some obstacles regarding their service but the company owner or decision maker must take some immediate steps to improve their service and try to maintain their brand reputation.  

References

Kotler, P. Keller, K. (2006) Marketing Management. 12^th Edition. Pearson Prentice Hall, New Jersey. U.S.A. pp. 346

Dibb, S. Simkin, L. M. Pride, W. Ferrell, O.C. (1997) Marketing Concepts and Strategies.  Third European Edition. Houghton Mifflin Company, New York. U.S.A.  pp. 650 Pricewaterhousecoopers (2009) UK hotels forecast. Issue 20, pp.20

Hooley, G. Piercy, N & Nicoulaud, B (2008) Marketing Stratagy and Competitive Positioning 4^th Edition. Pearson Education Limited. Pp. 217

Baker. M (200) Marketing Theory a student text Thomson Learning Pp. 220

Egan. C & Thomas. M (1998) The CIM Handbook of Strategic Marketing. Reed Educational and Professional Publishing Ltd,  Pp. 32

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/BeginnersGuideToTax/DG_4015895 Accessed 24/02/11

http://www.malmaison.com  Accessed 29/02/11

www.statistics.gov.uk Accessed – 22/02/11

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http://academic.mintel.com Accessed 24/02/11

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