Introduction
With 3,645 hotels and more than 470,000 rooms in 92 countries that are spread across all continents, Accor Group of Hotel is one on the largest chain of hotels in the world. As at June 2014, the company had an estimated €8.2 billion market capitalisation. It had revenue of €5536 million as at 2013.
Accor Group is a market leader in Europe and a major player in the world. The hotel group is ranked among the world’s top ten largest hotels in the world. With over 45 years and its presence worldwide, the hotel has a well-deserved position (Accor Group 2014).
The company has a portfolio of hotel brands that cover all market segments from economy to luxury. The portfolio ensures a wide coverage of as many consumers as possible. Its five-star brands of hotels include the Sofitel brand, while its four-star brands include the Novetel brand. Its three-star and two-star hotel brands are the Ibis and Hotel F1 respectively.
Despite its presence in nearly all continents, the company’s profits have lagged behind other competitors’ earnings. The situation has been attributed to many factors, among them being its expansion model through leases. The new planned measures of dividing the company into two divisions, namely HotelServices and HotelInvest, will go a long way in improving profits and better returns to investors.
It will also position the group to be more competitive. As the company moves ahead, it will have to put more resources to market its brand and cement it in its existing market locations to boost its profitability while at the same time playing an important role in enabling future successes in its expansion plans. This paper will discuss important aspects of market auditing and planning to position the company to be more competitive in its market segment.
Importance of Market Planning and Auditing at Accor Group of Hotels
The hotel industry is a highly essential business. It is important in providing accommodation for people on transit, holidays, and conferences among others. It also supports other essential sectors of the world economy such as tourism, transport, and agriculture (Middleton & Clarke 2012).
With the increasing globalisation and movement of people between countries, as well as within their respective nations, the hotel industry will continue to grow and provide essential services to the society. However, the industry is highly competitive. Hotels are competing to offer similar or differentiated services to consumers (Tollin & Carù 2008).
While goods in the form of food are sold in the hotel industry, the focus of the paper is the marketing of services such as accommodation and related luxuries such as security, experience, comfort, entertainment, and dinner experiences. Marketing auditing is a major aspect of any organisation’s marketing planning process since it seeks to position itself to be more competitive and profitable in the industry (McDonald & Wilson 2011).
It allows an organisation to look into its macro and microenvironments and effectively identity the trends in the industry, its strengths and weakness, opportunities, and threats, which allow it to have competitive advantage over its rivals. Further, it allows the organisation to come up with a corporate strategy with goals that it is sure of achieving based on its strengths and opportunities that are identified in the auditing process.
As Accor Group of Hotels moves ahead with its plan of dividing its hotel management approaches into two segments, it is important to have a marketing audit, which will guide its marketing plans and strategies towards more profitability. Further, due to the high competition in the industry, marketing audit is a very good tool for ensuring that the company can identify the trends and best practices in the industry.
It also stands a chance to identify its strengths and opportunities that it can maximise to its advantage. Consequently, marketing audit is an important and relevant tool that Accor Group of Hotels must use to guide its market planning process and development of the corporate strategies.
Specific Business Tools for Marketing Auditing and Planning at Accor
Accor can utilise various marketing audit tools to evaluate its marketing assets and/or review its marketing strategies, objectives, policies, and the means it seeks to use to achieve these goals and objectives. In the changing business environment, it is important to not only do auditing before the planning process, but also during the implementation process and the evaluation of the company’s future possible marketing actions (Taghian & Shaw 2008).
The marketing audit allows an organisation to understand its external and internal environment, as well as its strategy development (Violeta 2012). To carry out marketing audit, various business tools are used to cover both external and internal business environment.
At Accor Group of Hotels, a SWOT analysis can help the organisation to establish the key areas that it can emphasise while reducing its weak areas in its marketing strategies in an effort to boost its competitiveness through its restructuring plan.
For example, this tool can be used to identify the viability of its marketing plans that are focused on expanding its business in locations such as North America and Africa where it has less presence. It can help the company to ensure that its marketing strategies are aligned with the prevailing market conditions in the specific markets.
Another tool that Accor Group can use for marketing audit is the PEST analysis, which analyses the political, environmental, social, and technological conditions of the various markets where it exists. For instance, the company can use this tool to identify the conditions in the market and the viability of expanding its luxury hotels in specific market locations that the company may consider now or in the future.
Macro-environment for Accor Group in Asia
Macro environmental elements are the factors that happen in an organisation’s external environment that it cannot control, yet they are important in guiding its decision-making processes (Chabra 2012). They relate to the political, economic, social, and technological matters that must be considered at all times in an organisation’s strategic planning process.
Looking at Accor’s Asia market, the organisation must consider various important macro-environment factors as shown below:
From the above table, political stability is a major factor that must be considered by Accor Group. The hotel industry is highly dependent on tourism and travel sectors, which only flourish where there is political stability. Therefore, it is important for the company to strive to ensure that its expansion plans consider the political climate of the respective countries.
For example, major uprisings in the Middle East from groups such as Al-Qaida and the ISIS are a real threat to the tourism industry and in extension the hotel industry. Therefore, it is important for Accor Group to consider these factors in its expansion plans for its Asian market.
Micro-environment for Accor Group in Asia
The microenvironment refers to the immediate business factors in a business’ area of operations. They can influence its performance and its decision-making capabilities. These factors are unique to the business. They include customers, suppliers, producers, distribution channels, and the public among others (McDonald & Wilson 2011).
Porter’s five-force model is an important tool for analysing Accor Group’s microenvironment. The model considers supplier powers, threats of new entrants, customer powers, substitutes, and competitive rivalry. In the case of Accor Group, the threat of new entrants is not very high since the company targets different consumer segments to ensure that is has a competitive advantage over others, especially the new and emerging players.
However, considerable threats of entrants are evident with reference to other existing and reputable companies that can set base and compete effectively with Accor Group in the areas where it dominates. For instance, the Intercontinental Hotel Group is a major competitor. It also has a wide coverage as Accor Group.
Secondly, the threat of substitute is very high in the industry due to the high number of hotels in the sector. However, the company has remedied this situation by establishing hotels that target various levels of consumers from five-star to two-star hotels. The plan ensures that the company is competitive in terms of pricing. The company should also guarantee quality services and reduced operation costs to improve its profit margins.
The third important factor is customer bargaining authority. The hotel industry serves a wide array of customers. Hence, it experiences a moderate to low pressure with reference to customer powers in the sector. Further, customers are driven by many factors such as quality services, pricing, and security.
Hence, no customer can monopolise the industry. There is also an increasing brand loyalty for Accor Group, which erodes customer bargaining power. Fourthly, supplier bargaining command can play an important role in Accor Group’s microenvironment.
However, with its presence in numerous countries, and consequently a high number of suppliers, it is difficult for suppliers to leverage a significant power over Accor Group of Hotels. Lastly, rivalry in the industry is very high. Accor Group of Hotels must consider this factor the most important. The process of attracting customers with various offers and services is competitive.
In addition, other players are increasingly adopting cost-effective strategies to increase their profit margins. For instance, automating management systems and the adoption of technologies are the new frontier for competition in Accor Group’s luxury market segment.
Market Research and Market Intelligence
Timely and informed research is an important ingredient for successful decision-making in any given industry. For instance, looking at the hotel industry, especially in the mid-market segment in Asia where Accor Group has interest in, it is worth carrying out an informed decision-making process that is guided by market research.
In the Asian market, the region has been experiencing phenomenal economic growths that are fuelled by the emergence of economic powerhouses such as China and the oil-rich Middle East Asian nations (Kurkarni 2014). These encouraging conditions have attracted many hotels that are keen on increasing expenditure on luxury and transport.
For instance, major hotel players such as Intercontinental, Starwood, and Mantra have focused almost 80% of their expansion plans on this area of the world. Further, with more than 250 million visitors coming to China each year, the hotel industry will continue to surge even higher. Further, hotel occupancy has consistently been higher than 82% since 2012. This finding is an encouraging trend, which hotels must recognise and maximise.
Another important fact is that the luxury segment of 35% dominates the Asian market while the mid-market segment constitutes only 24%. Hence, by focusing on this segment, Accor Group will serve an obviously underserved and overlooked market segment.
By carrying out market research and intelligence, the company will be in a better position to understand market trends and competition levels. Hence, it will identify the target customers, especially in the middle class for its mid-market segment hotels.
Segmentation and Specific Segmentation Variables
Segmentation is an important factor for any business. It allows an organisation to identify and divide its target customers into various groups that have specific characteristics (Rusten & Bryson 2010). These characteristics or variables may include age, sex, and income among others.
For example, the luxury segment of Accor Group mostly targets high-income individuals, especially people in executive positions or corporate clients. These clients can be found in major cities of the world. Such clients are mostly in the age working bracket of 30 to 55 years. By segmenting the market, Accor Group is in a better position to design its marketing strategies that best suit this group of customers.
Market Positioning
Positioning involves the efforts that an organisation exerts towards creating a specific brand image. For instance, through its various brands, the company has positioned itself as a flexible company that can satisfy the expectations of other businesses while at the same time offering the highest luxury levels to all its customers (Tollin & Carù 2008).
The company’s luxury segment has positioned itself as an excellent segment that offers outstanding and memorable experiences to its customers, regardless of the location where they receive the services. In other words, the organisation seeks consistency of services across its outlets in the world.
Understanding Buyer Behaviour
The customer is always the king. This claim cannot be far from the truth, especially in the hotel industry. For instance, Accor Group must always understand the prevailing customer preferences and trends and implement them as soon as they arise. Consequently, market research should be an ongoing process to guarantee innovation and creativity, and hence organisational competitiveness.
Conclusion
Marketing is an elaborate subject that covers diverse areas that are critical in an organisation’s strategic planning. As discussed herein, Accor Group of hotels must undertake marketing audit that involves identification of its powers, flaws, success chances, and threats that will guide its marketing planning.
It is also an important process of understanding competition. The company needs to identify and appeal to its customers through segmentation and positioning of its brand.
References
Accor Group 2014, Key Figures. Web.
Chabra, T 2012, Marketing management, University Press, New York, NY.
Kurkarni, A 2014, Hotel views 2014: Asia Pacific. Web.
McDonald, M & Wilson, H 2011, Marketing Plans: How to prepare them, how to use them, John Wiley & Sons, New York, NY.
Middleton, V & Clarke, J 2012, Marketing in travel and tourism, Routledge, New York, NY.
Rusten, G & Bryson, J 2010, Industrial design, competition and globalisation, Palgrave Macmillan, Basingstoke, UK.
Taghian, M & Shaw, R 2008, ‘The marketing audit and organisational performance: an empirical profiling’, The Journal of Marketing Theory and Practice, vol. 16 no. 4, pp. 341-350.
Tollin, K & Carù, A 2008, Strategic market creation: A New Perspective on, John Wiley and Sons, Cambridge, UK.
Violeta, R 2012, ‘The role of market analysis in developing efficient marketing audit’, International Journal of Academic Research in Economics and Management Sciences, vol. 1 no. 5, pp. 222-229.