Introduction
Marketing Management is a business aspect that entails the marketing department of an organization researching and giving proposals on how best an organization can change its business techniques to best suit the changing environmental conditions. The roles of a marketing manager or consultant vary depending on the size of an organization and general industry characteristics.
To create an effective marketing strategy, marketing managers or consultants should understand clearly the market environment within which they operate.
A marketing environment consists of factors or elements such as customers, competitors, suppliers, government policies or controls among other micro and macro-economic factors that affect a business. Given the fact that all those aspects, which form the marketing environment, are always constantly changing, marketing consultants are compelled to be up to date.
It is only when a marketing manager is armed with current information that he or she can come up with new strategies and ideas to ensure his or her organization remains competitive. Based on this understanding, this paper provides an analysis of Singapore’s Manor House Country Club Hotel.
Manor House Country Club Hotel
Manor House Country Club Hotel (MCCH), which is the case study in this paper, is located in Singapore; is an island of almost 650 square kilometers. Manor Country Club House is on a 1.2 ha piece of land and given its strategic geographical location on the Island, it attracts many customers. It is situated near Theme Park and a Museum, which increases its economic prospects. In order to understand factors affecting its profitability, a marketing consultant has to look in both the microenvironment and the macro-environment in which it operates.
Microenvironment of MCCH
The microenvironment of a business consists of factors such as organizational culture, organizational resources, organizational structure, customers, competitors, suppliers and the immediate public that surround the organization.
It is reported that the hotel industry has witnessed an increase in sit-down meal customers i.e. a growth rate of 16% was registered since 2003. Based on this trend, an increase in customers should be expected if variety of sit-down meals from diverse parts of the world are introduced.
Additionally, the management should consider introducing a boutique at MCCH to attract customers. Information from hotels in other middle-east countries, like Qatar, shows that tourists prefer services of boutique while on holiday. Therefore, the new CEO of MCCH should consider investing in a boutique to provide more value for tourists who lodge at the hotel.
The new CEO will be preparing to fail if he does not address himself to competitors’ characteristics. It has to be noted that in the Singapore market, there is lack of differentiation i.e. all the hotels do the same things save for different prices and the different locations of these hotels. The only things that distinguish MCCH from competitors are price and location. Differentiation through the introduction of more quality and diverse services is thus very important in delivering a competitive advantage.
It is recommendable that MCCH focuses of tailored cultural experiences in order to attract and delight customers more than competition. Many visiting tourists must necessarily find it exciting when they are exposed to different Singaporean cultures while staying in MCCH.
Macro-environment of MCCH
A business’ macro-environment consists of factors that affect an organization but the organization has no direct control over the same.
Macro-economic factors that affect business operations include demographic, economical, environmental, legal technological, cultural, and political forces. Macro-environmental factors keeps on changing over the years. Therefore, it is important for marketers to keep scanning the business environment to respond to change in time.
In the year 1990, the total population in Singapore was 2.705 million. The latest population projection indicates that Singapore’s total population is 3 million. This means that for a period of ten years the population has increased by a paltry 300,000 people.
It therefore follows that Singapore has a very low population growth rate and majority of the total population are ageing people. Such statistics should inform all decisions made by the marketing department at MCCH. For instance, the marketing strategy has to target largely people who are ageing and couples.
The marketing manager at MCCH has to come up with policies that best suit the kind of people targeted, as given by population statistics. Away from the aging segment, the luxury bedrooms that were made available at MCCH in the year 2002 and the bar inside MCCH that was licensed to sell alcoholic drinks will on the other hand attract all the young couples and singles to MCCH.
Just as changes keep on occurring in the Singaporean, the relative demand by tourists for products also keeps changing. Psychographic trends are measured y studying specific characteristics of a certain population, and they include attitudes, motives, values, and interests of a certain population. According to a research by Kau et al, 65% Singaporeans said that family was the most important thing for them.
65% is great majority thus need to bear in mind that Singaporeans value their families when planning any marketing venture. The government also seems to agree with these facts since a family day is usually organized by the government every year where families get together to share various activities.
MCCH through its new CEO should therefore look out for these family days and organize family day promotions. MCCH can also organize special treats on specific weekends monthly for families to just come together and spend some time at the facility. Religion and education also matter a great deal of most Singaporeans. MCCH through its CEO should desist from inclining towards any kind of religion be it Buddhism or Christianity since it can lead Singaporeans from one religion completely ignore MCCH.
Another critical macro-environmental factor that may affect MCCH’s performance is government control through bureaucracy. This is evident through bans on smoking and licensing laws that affect the hotel industry.
Finally, it is worth noting the contribution of technology in improving operations at the hotel. Technological changes that improve efficiency e.g. use of credit cards in all hotel transactions and electronic door systems on hotel rooms have been adopted by MCCH.
SWOT Analysis
SWOT is an acronym for the words Strengths, Weaknesses, Opportunities and strengths. To understand an organization, an analyst has to look within its internal environment to identify strengths and weaknesses therein and within its external environment to identify opportunities and threats. Based on the information given a SWOT analysis on MCCH is as shown below.
Strengths
- Well managed
- Market leader in profitability
- Prime physical location i.e. proximity to famous tourist sites
- 11 years of continued investment
- Increased capacity due to buying of adjacent property and increasing luxury bedrooms in 2002
- Extended and modernized function suite
- Busy and successful bistro
- New Spacious Foyer
- Beauty salon that offers latest beauty treats
- Well trained staff in communication skills and customer care.
Opportunities
- Increased consumer spending on sit down meals
- Increasing adoption to new cuisines from different parts of the world
- Eating out major part of lifestyle of young and middle aged couples
- Growing demand for healthier eating
- Growth in domestic tourism
- Increased inbound tourism in the country
- Increased family travel.
Weaknesses
- Decline in corporate client bookings
- Retirement of one of the major partners
- Lack of enthusiasm from other partners towards new ideas.
Threats
- Highly competitive hotel industry
- Lack of product differentiation
- Increased government control
- Persistent war prices
- Highly demanding customers; i.e. affluent customers who wish to have an authentic experience.
Ansoff’s Matrix
Ansoff’s matrix indicates that growth of a company depends on whether the organization markets old products in existing markets, develops new product or services, develops markets or diversifies i.e. goes into other businesses that are not similar to current business.
MCCH should foster its growth through market penetration. This can be made possible through anchoring on the opportunities in the business environment. For instance, there is growth or increase in both foreign and domestic tourism. Therefore, through proper market communication suited for different market niches, MCCH can tap into the market potential.
Slow and sure bus tours should be made available for the ageing couples while live concerts and all night music at the licensed bars could be introduced to bring in young couples and singles. This strategy will help MCCH maintain develop and increase its market share.
MCCH can also expand in the next 2 years through market development. Market development involves coming up with strategies that help an organization to enter new markets. For MCCH, there are new market frontiers due to increased foreign and local tourism.
More importantly is the change in tastes and preferences by locals leading to adoption of eating delicacies from other parts of the world. Market development will also require proper market communication but on a much greater scale unlike when focus is on market penetration. For instance, MCCH should use channels like the internet, 24-hour television channels like CNN and BBC to ensure the message is spread everywhere.
The third strategy that MCCH can adopt as per Ansoff’s matrix is product development. Product development is the creation of new services and products. The tastes of customers are changing. In tandem, MCCH should bring in new products in tandem with changing customer needs. For instance, family tours are becoming more popular thus, introduction of family fun days, additional educational services and live concerts in the bars and restaurants can be the way to go for MCCH.
Diversification is also an important strategy and it helps bring some differentiation in an industry that is direly in need of difference. Introduction of complimentary or supplementary businesses or even very different business could help cushion MCCH against any changes in the market.
Porters Five Forces Model
There are five forces, which a business owner has to understand to guide an organization to greater heights. The first force that the management at MCCH has to consider and evaluate is supplier power. The new chief executive officer of MCCH has to understand how powerful the organization’s suppliers are.
This is usually calculated in terms of the number of suppliers the organization has; the number of individuals in the industry that supply a commodity needed by an organization. If the suppliers are few, they are more powerful and can alter prices as they wish.
Although, information is not provided on the suppliers of MCCH, the new CEO has to work closely with suppliers to gain economies of scale, have competitively priced supplies or enjoy better performance due to just in time delivery of supplies.
The second force to contend with is buyer power. Buyer power refers to capacity of buyers to influence prices. Buyer power increases with increase in competition among suppliers. It has to be noted that consumers especially the affluent are becoming even more quality conscious.
This means that going into the future, customers are likely to enjoy more power over what hotels offer and how they offer it. MCCH has to in readiness for the same becoming a leader through better anticipating of customer preferences and designing appropriate responses.
The third force that managers have to take into account as per Porter’s grid is threat of new entrants. Exit and entrance barriers determine threat of new entrants.
If it is easy for another firm to enter an industry, the threat of new entrants is high. Given the continuing growth of the Singaporean tourism market, and with projections of 17 million tourists annually, by the year 2015, the threat of new entries prevails.
However, given the high cost involved in setting up an international hotel, the likelihood of many other international hotels being set up is limited. Therefore, the head of MCCH should expand to attract the many tourist expected in Singapore in future.
Competitor rivalry in the hotel industry in Singapore is very high. However, MCCH is leading the pack and there are more opportunities that can be tapped into. Through diversification and developing of new products, differentiation can be introduced by MCCH thus setting itself apart for a successful future.
The final force, as per Porter’s model is threat of substitutes. In the case study, there is no indicator whatsoever of substitute offerings. Therefore, there is no threat of substitutes. However, through improving on its offering and tapping into emerging opportunities, MCCH should be able to grow in leaps regardless of whether substitute offerings arise or not.
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