Marketing Analysis: A Case of Marriott in China

MARKETING ANALYSIS: A CASE OF MARRIOTT IN CHINA
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Marketing Analysis: A Case of Marriott in China
Businesses have to develop a customer-driven strategy that creates and communicates value to consumers in a competitive business environment. This is paramount for businesses that want to create value for their shareholders. Marketing allows businesses to create, communicate, and exchange value with consumers (Baines et al., 2017, p. 6). They have to create an offering that is perceived as valuable by consumers, who then pay businesses in exchange for that value. However, businesses have to consider the context of their markets. According to Sheth (2020, p. 1), context, especially in international marketing, matters because it affects international brands’ marketing plans and efforts. Analysing the context is instrumental in creating an effective marketing strategy. This paper analyses the marketing efforts and strategies of Marriott International based on the current situation. Specifically, the paper will analyse Marriott’s marketing efforts in China.
Marriott International: An Overview
Marriott International is an American multinational corporation headquartered in Bethesda, Maryland. It was founded in 1927 and started as a root beer stand with nine seats but has since grown into a multinational corporation (Marriott, n.d.-a). Marriott operates in the hotel industry and has various hotels and lodging businesses. It has transformed the global hotel industry since it first opened its first international hotel. The founders believed in enhancing customer experience by providing “good food and good services at a fair price” (Marriott, n.d.-a). This was a marketing strategy that turned Marriott into the global brand that it is today.
Target Customers and Offered Products/Services
Marriott has a global presence and is operational in over 130 countries, and uses its 30 brands and over 7,000 properties to create value for its customers (Marriott, n.d.-a). Its target customers include luxury/ leisure travellers and corporates/business travellers who seek to accommodate their meetings and travel experiences in different parts of the world. These buyers are looking for convenience, comfort, and a home away from home. It has a market share of about 16% in the United States (US) and 4% in the global hotel market (Marriott, 2021-a, p. 10). Increasing its market share is paramount for its success in the international market.
Marriott’s main offering is accommodation through its many hotels and lodging facilities (Marriott, 2021-a). It also has home rental services offered to customers who want longer stays in their travel destination. Marriott also offers travel services to customers who want memorable travel experiences. Because of its strong and well-recognized brand, Marriott offers its customers high status and accessible services that are sometimes customized to meet the customers’ needs.
Marriott’s in China: Current Situation
One of the countries that Marriott operates in is China, which is the subject of this analysis. The Chinese hotel industry is lucrative and has grown significantly over the last decade both in revenue and size. According to Ma (2020), the hotel industry in China generates annual revenue of about 434 billion Chinese Yuan. It also has over 330,000 hotel accommodations and employs more than 1.8 million people. As shown in Figure 1, Marriott enjoys a significant occupancy rate in the Asia Pacific, which has mostly been attributed to the Chinese hotel industry. In fact, as many regions reported a decline in occupancy rate in 2020 due to the COVID-19 pandemic, Asia Pacific had the highest occupancy rate of 39.6%, as shown in Figure 1(Statista, 2021). According to Marriott (2021-a, p. 28), the China business first experienced the effects of COVID-19 in January 2020 before the disease spread to other parts of the world. However, it was also the first place to report improvement because of domestic leisure travel within China in the second quarter of 2020.
Figure 1: Marriott International Occupancy Rate in Different Regions
Source: (Statista, 2021)
Marriott’s expansion into China has seen it open hundreds of hotels in the region. Specifically, it plans on opening its 400th hotel in Greater China (Marriott, 2021-b) as well as its 50th in Shanghai. The company is also focusing on opening more luxury hotels and accommodation facilities to leverage the growing market for luxury accommodation in China (Marriott, 2021-b). To succeed in this growth and expansion, Marriott needs to have a well-established marketing plan. In addition, given that China was the first to be hit by the COVID-19 pandemic, which affected international travel, the brand also needs to put a strong marketing strategy to encourage more international travel to China. Currently, it is relying on domestic travel in the region to boost its sales and revenues (Marriott, 2021-a, p.10). A good marketing strategy will strengthen the brand and its appeal to international customers in China and beyond.
SWOT Analysis
To identify Marriott’s marketing strategy in China for further analysis, a SWOT analysis will be conducted. According to Lestari and Yunita (2020, p. 27), a SWOT analysis reveals the internal and external factors that affect a business and can be a good step towards establishing a marketing strategy. The following SWOT analysis is based on Marriott’s current situation in China.
Strengths
* Strong brand recognition- Marriott is well recognized in the US and other regions (Marriott, 2021, p. 10). This strong brand recognition has strengthened its ability to penetrate markets and open more hotels in China and other countries in the Asia Pacific region.
* Strong Partnership with Chinese Alibaba- Marriott has a strong joint partnership with Alibaba, which has attracted tech-savvy Chinese travellers and enhanced their travel experiences (Marriott, 2018).
* Strong loyalty program- Marriott has one of the strongest loyalty programs. Its loyalty program was made stronger by its partnership with Alibaba (Marriott, 2018). This loyalty program has been instrumental in helping Marriott recover from the pandemic. The company is even planning to work with other digital brands to strengthen its loyalty program beyond China (Parsons, 2021). The loyalty program has enhanced customer loyalty and retention.
Weakness
* Insufficient positioning- Marriott has positioned itself as a family-friendly travel business. It offers over 800 kid-friendly hotels to accommodate family travel (Marriott, n.d.-b). However, it needs to adjust its positioning to accommodate Gen-Z, who want a different travel experience.
Opportunities
* High hotel occupancy rates- Marriott has been experiencing high occupancy levels in China, more than in any other region. According to Reuters (2021), Marriott’s hotel occupancy rates in China are almost at the level they were before the pandemic. This presents the company with an opportunity to expand and meet the demand for hotel accommodation in the country.
* High demand for local leisure travel- The demand for local leisure in China has been on the rise, especially after the country’s initial efforts to recover from the pandemic (Raj, 2021). Marriott can jump on this opportunity and enhance its sales and revenue as it waits for the rest of the world to recover and increase international leisure and business travel.
Threats
* Government policy on travel amid the pandemic- The Chinese government continues to impose lockdowns in various parts as new strains of COVID-19 emerge (Raj, 2021). This will affect domestic and international leisure travel in China and ultimately Marriott’s ability to keep offering its services and products.
* Stiff competition- Marriott continues to face stiff competition from other strong brands such as Hilton and Radisson (Marriott, 2021-a, p.10). These brands have a strong global presence and are well-recognised. Hilton is fighting for the same hotel occupancy as Marriott and has reported that it is also doing well in the region (Raj, 2021). Marriott will need a strong marketing strategy to remain ahead of Hilton and other brands in China and the Asia Pacific region.
Table 1: SWOT Analysis
Strengths

Weakness

* Strong brand recognition
* Strong partnership with Alibaba
* Strong loyalty program

* Insufficient positioning

Opportunities

Threats

* High occupancy rates
* High demand for leisure travel

* Government policy on COVID-19
* Stiff Competition

Market Segmentation, Targeting, and Positioning: An Analysis
In business, marketers often have to identify potential customers through market segmentation and also how to position their brand for increased profitability (Andaleeb, 2016, p. 181). Market segmentation, targeting, and positioning are instrumental in determining how the business will make the most profit by focusing on the most profitable customers since it cannot meet the needs of every single potential client. According to Camilleri (2018, p. 70), market segmentation involves identifying groups of consumers who share similar interests and needs. Once the segments have been identified, the marketer has to identify which segments to ta...