Online Video Case 13.1 MARRIOTT: Marketing Research Leads to Expanded Offerings With roots that go..

Online Video Case 13.1

MARRIOTT: Marketing Research Leads to Expanded Offerings

With roots that go back to before the Great Depression,
Marriott International (www.marriott.com) has come a long way from its founding
by husband and wife John and Alice Marriott. As of 2014, Marriott International
has grown to be a leading lodging company with more than 3,700 properties in
seventy-four countries and territories worldwide. This sustained vast expansion
over the last several decades is due in large part to marketing research.
Marriott began pioneering segmentation in the hospitality industry

Online Video Case 13.1

MARRIOTT: Marketing Research Leads to Expanded Offerings

With roots that go back to before the Great Depression,
Marriott International (www.marriott.com) has come a long way from its founding
by husband and wife John and Alice Marriott. As of 2014, Marriott International
has grown to be a leading lodging company with more than 3,700 properties in
seventy-four countries and territories worldwide. This sustained vast expansion
over the last several decades is due in large part to marketing research.
Marriott began pioneering segmentation in the hospitality industry by expanding
its product offering in the 1980s, both upward and downward in quality from its
flagship Marriott brand. Through focus groups and survey research, Marriott
found that it could have many types of hotels serving different market
segments, and that these market segments, although all providing the same basic
needs, would not compete with each other. Certain brands under the Marriott
umbrella serve the business traveler. Courtyard by Marriott, with pricing and
scaled-back service levels compared to the larger Marriott hotels, is targeted
toward the price-sensitive frequent business traveler. Courtyard hotelssaid to
be designed for business travelers by business travelersoffer high-speed
Internet access, ample workspace within the rooms, and other amenities that are
appealing to the business traveler. Fairfield Inns are priced still more
modestly to appeal to travelers who are even more price sensitive. Other brands
under the Marriott flag, such as the Ramada line, serve a more family-style
vacation market, with a focus toward comfort and affordability.

However, differentiation is not based on service and pricing
alone. Marketing research has revealed other attributes that are important. For
example, a family or a basic business traveler on a budget might be looking for
a convenient location in addition to affordability. Hence, Marriott places
Fairfield Inns along interstates and highways because these targeted groups
travel by car. Convenient location becomes another attribute that adds value
and enhances perception of the Marriott brand name.

When Marriott began its Fairfield Inn and Suites brand, it
started simply as Fairfield Inn. Then, with marketing research (focus groups
and surveys), Marriott found that its Fairfield Inn customers desired a
luxury-class room within the value hotel of the Fairfield line. Responding to
this, Marriott changed the name to Fairfield Inn and Suites and added high-class
rooms that contain amenities such as spas.

Analysis of internal secondary data identified a substantial
number of travelers who stayed in Marriott hotels for more than a few nights.
Focus groups and surveys revealed that these extendedstay travelers have
different needs. They might need meeting space to conduct business, a
kitchenette to dine in occasionally, or a suite space so that they do not get
tired of seeing the same four walls around their beds when they come home in
the evening after yet another day on the road. For these travelers, Marriott
opened the Residence Inn line (a hotel line designed for an extended stay).
Through subsequent marketing research Marriott found that this segment had room
to expand to a more value-priced line as well. Again, responding to this
research, Marriott introduced Towne Place Suites (a value-priced extended-stay
hotel line). Some of the guests at the Residence Inn or Towne Place Suites
spend up to six months to a year at the same hotel.

At the high end, Marriott offers fuller service and higher
prices with its Hotel Resorts & Suites and its Renaissance upscale business
properties. According to Marriotts research estimating potential demand, the
size of this high-end segment is substantial. With all of these hotel lines,
Marriott continues its commitment to quality that began with John and Alice
Marriott. Knowing from research that all hotel residents desire quality,
Marriott strives to provide this in all facets of the hotel service. One way in
which Marriott demonstrates this is by empowering its customer service
representatives to address customer problems.

Although each of the various Marriott brands has worked hard
to carve out a niche for itself, they all share the Marriott brand identitythe
key ingredient to their success. According to Gordon Lambourne, vice president
of marketing and public relations, the Marriott brand identity is all about
commitment to service excellence: a strong focus on employees that work in the
hotels, taking care of these associates so that they can really focus on their
jobs and provide a level of service that customers demand and expect today that
is consistent throughout the global Marriott brand. Each of Marriotts hotels
has a different personality with a distinct design and service level that make
the guests feel like they are in London or Munich or Paris, but all these
hotels have a common thread running through them that identifies them as
Marriott hotels.

The numerous Marriott brands, rather than creating
competition for each other, actually help cultivate and sustain business.
According to Gordon Lambourne, each brand does an excellent job of appealing to
its particular segment, because each has its loyal following, and each markets
itself independently and as part of a group that is a portfolio of brands.
However, there is some crossover, but Marriott views it as a great opportunity
to serve customers whose needs may change. So a customer looking for an
extended stay might prefer the Residence Inn, but choose a full-service hotel
such as the Renaissance for a shorter trip. So whatever the customer prefers at
any time, whatever that need might be, Marriott is well positioned to capture
that customer and that piece of business.