Introduction As the Chinese Hospitality industry continues to grow, Marriot Hotel has seen an

opportunity to generate revenue. With the largest population in the world, it’s growing middle classes presents new demand hotel accommodations. With only 22 hotels currently in operation, in China, Marriott Hotel hopes to gain a larger market share through opening more hotels and satisfy the increasing demand. The purpose of this Marketing Plan is to explain to Professor Wongsuwan the strategy necessary to expand Marriott hotels operations in China.

Situational Analysis

1. Company and Country Background Analysis

Marriot International Inc. is a leading hospitality company with 4,000+ different locations and properties in 78 countries. Marriot International Inc. currently has 19 hotel brands including Courtyard Marriot, Edition, and the Ritz Carlton. They are a high-end hotel company that targets a wide range of customers such as the upper class, corporates, and families, even honeymooners. Since 1927 Marriott has been upholding a culture, which puts people first. Marriot maintains their culture through staying true to their mission and values which expresses their belief of putting people first, pursuing excellence, embracing change, acting with integrity and serving our world. Marriot is a technically innovative company, which strives to improve customer experiences through making booking easier. Marriott’s brand name is very strong. They are a large player in the global hospitality industry, making them a well know company worldwide. Marriott is known for their excellent customer service as they were ranked one of the most loved companies in 2013. Marriott is also expanding their brands into new and existing markets. For example they will be opening three new Edition hotels in China by 2017. Marriott is experiencing issues with their employee turnover rate. In the past the voluntary turnover rate has been high.

2. Industry Analysis:China hospitality industry has been identified as a growth engine for the Chinese

economy. Currently the hospitality industry in China has been labeled as a “$44 billion business with 2.5 million hotel rooms”. With a growing middle class, the Chinese are beginning to to use their leisure time for travel. Currently comprised of 13 million households the upper middle class is expected to grow to 55 million households in 10 years. The Chinese hospitality industry currently offers 4 rooms per 1,000 capita, which is low, compared to the United States, which offers 20 rooms per 1000 capita. The demand for hotel rooms is continuously increasing making the Chinese market an attractive industry to carry out business. Over the next 10 years the Chinese hospitality industry is expected to grow to a $100 billion industry with 6.3 millions hotel rooms. Growth will

About Marriott:

● Marriott International, Inc. is a leading hospitality company with more than 3,900 properties, 18 brands, and associates at our headquarters, managed and franchised properties around the world. Founded by J. Willard and Alice Marriott and guided by Marriott family leadership for more than 80 years, the company is headquartered in Bethesda, Maryland, USA, and reported revenues of nearly $13 billion in fiscal year 2013.

Mission and Values:○ Our core values make us who we are. As we change and grow, the beliefs that

are most important to us stay the same—putting people first, pursuing excellence, embracing change, acting with integrity and serving our world. Being part of Marriott International means being part of a proud history and a thriving culture.

○ We put people First- “Take care of associates and they will take care of customers”

○ We Pursue Excellence- Our dedication to the customer shows in everything we do

■ Marriott’s reputation for superior customer service dates back to J. Willard Marriott’s original goal for his business: “good food and good service at a fair price.” We take pride in the details—every day, in every destination worldwide.

○ We Embrace Change- Innovation has always been part of the Marriott story○ We Act with Integrity- How we do business is an important as the business we do

■ We hold ourselves to uncompromising ethical and legal standards. This extends to our day-to-day business conduct, our employee policies, our supply chain policies, our environmental programs and practices, and our commitment to human rights and social responsibility.

○ We Serve Our World- Our “spirit to serve” make our company stronger.■ Marriott Focuses on 5 global issues: poverty alleviation, the environment,

and community workforce development, the wellbeing of children, and global diversity and inclusion.

Culture:● Since 1927 Marriott has been known for a culture that puts people first.

Marriott Brands (Product Line): ● 19 hotel brands

Marriott location: ● 4,000+ destinations in 78 countries

○ US, China, Brazil, Germany, Spain, Russia, United Arab Emirates Marriott Distribution Channels

● In an effort to support hotel operations and profitability Marriott leverages electronic distribution channels to distribute room inventory to a broad cross-section of customers

Marriott Target Consumers:● Upper Class, Honeymooners, Corporates, families

Marriott Strengths:● Global Market, Strong Online Growth, Owns lots of real estate, Excellent Customer

Service, Partnerships with other hotels, Hotel Business Leader, Strong Brand Name for Marriott, Technical innovations to improve customer experiences and Constant upgrade of business process, In 2013 ranked as one of the most loved companies (Statista).

Marriott Weaknesses● Staff turnover, Standard and Poor rating of BBB-, Declining Profit Margins

In June of 2014 Marriott is 6th in the number of hotel properties it owns worldwide with 4,025 (http://www.statista.com/statistics/197869/us-hotel-companies-by-number-of-properties-worldwide/) Marriott has 22,000 rooms in Asia Pacific

There are 81 Marriott Brand hotels in China currently.

22 Marriott Hotel’s in China

In 2012 China became the #1 exporter of tourists, accounting for 70 million overseas trips (Marriott.com)

“Among the company’s high-end brands, Marriott expects to have more Ritz-Carlton properties in China than in the U.S. within five to 10 years, Sorenson said. The hotelier also is expanding its Bulgari luxury brand. It has two such hotels, in Milan and Bali, Indonesia, and will announce a third, in London, in the next few weeks, he said. “Luxury will be a powerful long-term growth engine for us because of the wealth” building in such countries as China, Sorenson said.”

http://www.bloomberg.com/news/articles/2012-03-30/marriott-may-sell-edition-hotels-to-fund-brand-expansion

In the year 2016, execute a strong entry for Marriott’s new Edition Brand in Sanya China. This location will outperform London, and New York City locations focusing on entry into the boutique hotel segment. We expect to earn 10% ROI for first year. In 2017, Edition hotels in Shanghai and Wuhan China will further the Edition Brand Image and increase earn a 15% ROI by 2018. Open 5 Franchises by the fiscal year end 2020 Issue: Edition is not an established Marriott brand name in China creating a market entrance barrier

2. Industry Analysis

PRC government policy initiatives, rapid economic growth, and recent events, such as the 2008 Beijing Olympics and the 2010 Shanghai Expo, have helped China’s

tourism industry expand rapidly in recent years. Despite adding many new employees in this fast-paced sector, foreign hospitality and tourism companies in China continue to face a shortage of skilled workers.

At the same time, few educational institutions in China focus on hospitality and tourism, and those that do lack programs that sufficiently prepare hospitality workers to provide services that integrate international standards and best practices. Education experts note that today’s graduates will need a skill set that integrates contemporary knowledge and best practices to succeed in a rapidly changing work environment—and the tourism industry is no exception.

For example, China had roughly 10,200 hotel enterprises nationwide in 2006, but the country boasted more than 15,000 such enterprises in 2010, according to the PRC National Bureau of Statistics (see China Data). From 2006 to 2010, business revenue from hotel services expanded from ¥155.2 billion ($24.4 billion) to ¥279.8 billion ($44 billion).

Over the next few years, the hospitality and tourism industry will become one of China’s largest employers. The World Travel and Tourism Council estimates that the travel industry in China contributed roughly ¥1.1 trillion ($173 billion) in 2011, or 2.5 percent of China’s GDP. The industry’s direct contribution to employment in China is forecasted to expand from roughly 23.1 million jobs in 2011 to 26.6 million jobs by 2021. Moreover, the hospitality and tourism industry in China has the potential to create rewarding, higher-paying jobs with opportunities for upward mobility. Like many other sectors in China, the tourism and hospitality industry also struggles with employee turnover.

China’s tourism education system would benefit greatly from collaboration between the public and private sectors. The public sector should implement a standard tourism and hospitality curriculum, as well as hire qualified teachers. The private sector can facilitate the development of teacher training programs and teaching guides that outline critical skills. Private sector involvement in curriculum development can help prepare students for situations they will encounter on the job, as well as introduce the concept of guest services and international Standards and best practices.

Swot Analysis

Positive Negative

InternalStrengths

- Brand name

- CRF Institute- China’s top employers 2013

- Human Capital Management Magazine- China Talent Management Award

Weaknesses

- Inefficient local managers

- Employee turnover

- Inefficient market research leading to

ExternalOpportunities

- Anticipated market growth

-

Threats

- Potential economic slowdown

- Political unrest

- Internet Censorship

● Opportunities

The World Tourism Organization estimates China will be the number one tourist destination by 2020.

● Threats○ Major threats: The sustainability of China’s economic growth is risky

because the government owned banks has been giving out risky loans to start-ups. If these investments do not make a favorable return, the economy will tank like the United State’s economy in the late 2000’s.

○ Potential threats: The Chinese government has been criticized for being imperialistic with neighboring country borders and abusing international water territory. The hostility neighboring countries hold against the superpower coupled with North Korea’s mobilization of nuclear weapons presents a threat to China’s national security, possibly deterring tourism.

○ Minor threats: The government has a lock on many Internet

websites and that could deter future customers from enjoying their stay without connection to their most frequented websites.

Objectives and Issues

OBJECTIVES AND ISSUES

Objective: Decrease the voluntary turnover rate, retaining and creating a seasoned staff to better serve our customers and outperform our competitors (http://archive.fortune.com/magazines/fortune/best-companies/2013/snapshots/64.html)Issue: Some seasoned staff might become complacent and less productive

Objective: Increase web traffic in China to our companies website by 10% by the fiscal year end of 2016 and increase 5% every year after until 2020 (http://www.alexa.com/siteinfo/marriott.com) Issue: Chinese government censorship

Objective: Increase the number of hotel rooms in China by 20% concentrating on regions Marriott is not currently presentIssue: Increase in quantity might decrease quality

International Marketing Strategy

Positioning- (what is Marriott’s competitive advantage) At the economy level, Marriott competes with companies such as Hilton Hotels. Both companies share the same customers. Consumers choose between Marriott and Hilton based on price, location, and amenities. Our strategy is to target cities in China where we are not currently operating. Through conducting secondary research we will attempt to identify growing cities where we could build a new hotel. This will allow us to penetrate the industry in that specific area early. Our hotels will have a central location in the city of operation. Our hotels are focused on improving customer’s stay through offering an environment where they can “work, play, mix, mingle, connect, and relax”. Each hotel will come with a strong and reliable Wi-Fi network. Our hotels will feature facilities that cater to the needs of both Western and Asian clients. We will achieve this through adding various features such as a spa, swimming pools, work out facility, conference rooms, and restaurant/bar. We recognize transportation in an unfamiliar city can be tough, so our hotels will offer a shuttle service for our customers to use as they please. These amenities will give us a competitive advantage over our competitors.

Marketing Research:1. Research industry, market characteristics and trends to determine the

market share potential, diversification, 2. Distribution Research to further understands the effectiveness of online

booking.3. Promotional Research to ensure we are using the best form of

communication with our clients,

Marketing Organization Focusing on our products image depending on it’s geographic location. For example, the design of our buildings will be different in Shanghai compared to Beijing. Shanghai’s building would be designed to complement the surrounding building with a modern design and exterior illuminated with LED lights.

Product Strategy

● We offer high quality hotels for upper class travellers ● Our customers are upper class, corporate employees, and couples on

honeymoons. They are interested in high-end lodging in China’s growing cities

● We distribute our services and promotions through Marriott.com● Our hotel rooms are priced depending on demand and square footage and

are considered high-end lodging accommodations

Using the diffusion process, Marriott International is introducing its Marriott brand into the Chinese market while the brand is in the growth stage. This established brand has momentum entering into the new market. In this situation, China is considered a “lag country” because it is adopting the Marriott brand later in the brand life cycle and therefore will adopt the product at a faster rate.

Tactic to ensure success- China’s hospitality industry is predicted to increase exponentially in the upcoming years. In order to ensure success we need to be prepared for the upcoming increase in demand. Through getting ahead of the curve and constructing facilities we will have already established a name for ourselves in China’s market as the country becomes increasingly mobile.

Price Strategy:● We will price our rooms based on the size, applications, and time of the year. ● Our price range will be determined by demand. ● To keep up our image as a luxury hotel brand, the pricing will be set to

attract those with a higher amount of disposable income.

Through pricing research we will determine a

Tactic to ensure success-

Distribution Strategy:● Increase web traffic to our online booking page. ● Inform customer’s awareness of our online booking page.● Going directly to our customer instead of paying commissions to third party

promoters.● Enhance customer service by providing better information through

multimedia

Through continuous innovations, we have

Seventy Percent of Chinese travelers use online travel sites to plan vacations. Popular travel sites for this market include Qunar.com and Lvmama.com.

Strategies:1. Increase revenues by extending the company’s reach to broader, global

market2. Going directly to the customer instead of paying commissions to third party

promoters3. Enhance customer service by more and better information through

multimediahttp://cqx.sagepub.com/content/39/4/42.short

Marketing Communications Strategy

http://www.chinabusinessreview.com/the-hospitality-talent-gap/

Hospitality Industry: ● China’s hotel industry experiencing meteoric growth resulting in a

$44 billion business with 2.5 million hotel rooms.● China has 4 rooms per capita- low compared to 10 room 1000 per

capita in UK and 20 in US● Over next 10 years hospitality will become a $100 billion industry with

6.3 million rooms and 8 rooms per 1,000 capital

Controls● Goal- Awareness of our new Hotel locations, to ensure high return on

investment.Measure of Performance- Use click count and internet data research to ensure 55% of customers are aware of new Hotel locations.

● Goal- Increase employee satisfaction, to lower voluntary turnoverMeasure of Performance- Issue employee surveys every three months to gather feed on how we can improve the average workday.

● Goal- Successful promotional deals during traditional slow quartersMeasure of Performance- Outperform our competitors by having a minimum of 45% occupancy rate at all times.

VIII. Conclusion

http://www.atkearney.com/documents/10192/982632/Chinas_Hospitality_Industry.pdf/72ed00fb-1cad-4798-a1a1-1552604bc72e

http://cqx.sagepub.com/content/39/4/42.short

http://www.bloomberg.com/news/articles/2012-03-30/marriott-may-sell-edition-hotels-to-fund-brand-expansion

http://www.editionhotels.com