THEORETICAL ASPECTS OF MARKETING STRATEGIES

TABLE OF CONTENTS

INTRODUCTION 2

1. THEORETICAL ASPECTS OF MARKETING STRATEGIES 4

1.1. The essence and importance of the marketing strategy for the company development 4

1.2. Types of marketing strategies 5

1.3. Development stages of the marketing strategy 7

2. THE ANALYSIS OF MERCURE HOTEL BUSINESS ENVIRONMENT 11

2.1. Companys’ profile 11

2.2. Factors affecting the company’s internal environment 12

2.3. Factors affecting the company’s external environment 13

3. THE ANALYSIS OF MERCURE HOTEL MARKETING STRATEGY 17

3.1. Hotel pricing policy 17

3.2. Distribution Analysis at Mercure Riga Center 18

3.3. Sales promotion at hotel Mercure Riga Centre 19

CONCLUSION AND PROPOSALS 22

BIBLIOGRAPHY 25

INTRODUCTION

Living in the 21st century, the timing and technological advancement have unequaledly utilized our attitude towards ourselves, the environment, global competition, speedy changing technological environment and the political situation. Earlier unknown companies appear on the market, and other well-known, disappear, simply because they make mistakes and do not respond to changes in the environment at all times.

Strategic management in the business activities becomes increasingly important, with the increase in external environment factor changes and increasing competition. Consequently, it is important for young companies to develop understanding about methods of strategic analysis and their use, as well as to develop the necessary skills for the development and successful use of strategies. The experience of recent years shows that one of the causes of failure and misconduct of managerial activity is that all their previous experience and knowledge gained are not related to business education. Competition require different approaches and knowledge in a wide range of areas. If we consider that in Latvia, about 15 years of strategic thinking, as a top-level managerial way of thinking and action is fundamentally new science where foreign scientists’ opinions and researches should be used, while taking into account the peculiarities of the development of the economy of Latvia and its problems in recent years.

Currently, the two main features of modern markets are the market volume, the growing gap between clients and their requirements for individual approach and attitude and communication technologies, distribution and production existence that allows them to deal with segmentation strategies. In some cases, this leads to “micro segmentation” or “one to one marketing” in which each client is perceived as a separate segment.

The present research is actual because of: the growing role of the marketing strategy in the company’s activity; secondly, author work experience in the company under study; competitive conditions, which require an ever-new approach and up-to-date knowledge in various fields; the direction of strategic management as a top-level manager’s way of thinking and action science and practice in Latvia.

The scope of the study is the Mercure Hotel. The aim of the study paper is to study and analyze the nature and role of the marketing strategy in the company’s activity, to develop proposals for the development of a new marketing strategy.

 To accomplish the goal, the following tasks are required:

  1. Analyze the theoretical aspects of marketing strategies;
  2. Analyze the company’s current marketing strategy;
  3. Develop proposals for implementing an improvements in marketing strategy;

The author of the study paper has used the theoretical literature (in Latvian, Russian and English), publications of specialists in the press (newspapers Dienas Bizness, Diena), information from Internet portals, unpublished materials from the company, private interviews with company representatives.

THEORETICAL ASPECTS OF MARKETING STRATEGIES

The essence and importance of the marketing strategy for the company development

Marketing is related to identifying and satisfying human and social needs. One of the shortest marketing definitions is: “Profit-driven, meeting needs.” (Kotler, 1999)

Nowadays, it’s not so much that you have a good product. It is important, producy to be properly targeted on the market. The marketing strategy includes:

  • targeting;
  • creation and positioning of a unique sales offer;
  • optimal type of targeting and sales place selection. (Walker, 2006)

In order to reach the target customers, with good products is not enough, there must also be a unified strategy. The creation of an effective strategy requires thorough market research, planning, analysis, expertise and knowledge.

Successful marketing strategy planning requires information about potential target markets and their potential response to the company’s marketing mix as well as competitors and other company-controlled values. Without good marketing information, the leader is guided by intuition or guesswork that leads to failure in our rapidly changing competitive environment and economic situation (Hunt and Lambe, 2001).

A targeted marketing strategy that includes resource planning and distribution, the use of different forms and methods at different stages of the development and life cycle stages of the new product, as well as the marketing strategy for the organizational forms of the market, must be developed to ensure the target market for goods and services (Kotler, 2003).

Marketing strategy should be guided by the planning of each business unit, it consists of decisions on marketing, the position of the goods on the market, marketing, why, and a certain level of marketing costs (Kotler, 2003).

To achieve a specific goal, the firm uses the way to achieve it-a strategy.

The company works to succeed. In order to make decisions, it is necessary to reconcile the environmental factors with the possibilities of the company. This can be done by establishing a strategic plan. The Strategic Plan indicates what marketing activities should be undertaken, why they are needed, who is responsible for their implementation, where and how they will be implemented. It also determines the company’s current situation and orientation in the future. The plan is built on the results of marketing information system data, research and observation (Morgan, Clark and Gooner, 2002).

According to the author, developing a marketing strategy and strategic plan for the company is important.

The significance of the strategic plan is that it (Neely, 2002):

  1. gives a scientific orientation in the company’s business and allows to better understand the structure of marketing research, consumer research processes, product and price planning, and product promotion processes;
  2. provide each company’s strategic business unit (SBU) with specific objectives related to the company’s common goals;
  3. obliges the firm to evaluate its strengths and weaknesses from the point of view of its competitors, as well as to assess potential threats from the surrounding environment (abbreviated SWOT) (Hill, Westbrook, 1997);
  4. also it helps to indicate possible alternative actions in case of unexpected changes in the environment;
  5. provide the basis for the allocation of resources according to the objectives of each SBU.

In turn, a properly designed and implemented marketing strategy provides a concrete result – an increase in sales. A marketing strategy is one that unites all of your company’s marketing activities in one whole, and sets out common guidelines for operating and planning marketing activities in accordance with the company’s overall goals (Hooley et al., 2001; Fahy and Smithee, 1999).

Summing up the first section, the author concludes that nowadays it is important to create a successful marketing strategy as it is the main idea of the company, how to satisfy customers’ desires and needs with the appropriate form of product, price and market promotion. To do this, the first precondition is the collection of information and market research to determine the main target market for their product.

In the next section, the author of the paper described various types of marketing strategies.

Types of marketing strategies

There is an opinion that only three marketing strategies for business development are needed:

  1. increase the number of customers;
  2. increase the average transaction volume;
  3. increase the frequency of repeated purchases (Matsuno, Mentzer and Özsomer, 2002).

In view of these three factors, the ability of each marketing strategy to directly influence and improve should be considered.

It is also important to determine the type of strategy for each element of the marketing mix. According to one of the concepts, marketing mix contains four main directions: the product, price, place, and promotion of the product on the market. A marketing mix is the choice of a combination of product, price, promotion and place that allows you to meet the customer needs.

Pricing strategy

Businesses must not only determine the price of individual products, but also have to create a pricing system that covers various products, and all pricing factors, methods and principles must be taken into account. In addition, any company operates under competitive conditions, so it is sometimes necessary to change the base price already set and adapt to the market situation; therefore, it is necessary to plan and implement a specific pricing strategy. The main directions of the strategy are:

  • pricing strategy for new products;
  • the product assortment pricing strategy;
  • market pricing strategy (Dibb et. all, 2013).

Placement Strategy

Distribution is a set of measures implemented by the company, creating and directing the flow of products to the buyer. The distribution begins when the product is ready for delivery or sale and ends when the buyer receives the item. Distribution takes place through intermediaries. The distribution channel is the “path” through which the product moves from producer to consumer. A distribution channel is made up of companies or individual individuals who perform all intermediary functions in the process of moving goods from producer to consumer (Shapiro et.all, 1997).

When choosing a distribution channel, it is necessary to assess whether the company will not become too dependent on intermediaries whether the existing distribution channel members will achieve the marketing goals and the company’s financial goals (Wright, 1999).

Product Strategy

Firstly, the potential and performance of the product should be explored. Secondly, a marketing specialist can create a strategy to meet the needs of the buyer. The product can be transformed, or the product life cycle could be extended by something new in one of the marketing components. Sometimes the best strategy is to completely eliminate the product. (Wright, 1999)

Promotion Strategy

First of all, it’s necessary to find out what is the way to market, what kinds of it is.

The product marketing consists of advertising, sales promotion, direct sales, public relations, direct marketing.

By using various elements of the kit, the company passes on its products to consumers, employees, interest groups and the rest of society (McCarthy, 1964).

All types of marketing communications can be grouped into two groups (Mulhern, 2009):

  • mass marketing communications (advertising, promotion of product sales, public relations);
  • Personal marketing communications (direct marketing and personal service).

Each type of promotion has advantages and disadvantages. Usually, companies combine different types of promotion.

Development stages of the marketing strategy

The development of a marketing strategy begins with research and analysis of the common market situation. In general, there are four categories of market that can be used to make appropriate decisions and further solutions (see Figure 1.1).

Figure 1.1. Market Categories (Homburg et. all, 2009)

In developing a marketing strategy, one must also look at the company’s sphere of activity – the characteristics of the company’s industry and its development, the level of competition, production, market segments in which the company is or is planning to be.

The marketing strategy can be guided by the following plan (Fifield, 2008):

  1. Determining the company’s marketing mission in relation to the overall mission of the company.
  2. Defining marketing goals. It is important to express these goals in numerical or percentage terms in order to control their implementation.
  3. Definition of financial targets. These goals are often linked to an increase in profits and sales.
  4. Determining the target market. The precise identification of target markets is already half the progress, so the target market needs to be set very carefully, taking into account all the characteristics of the consumer and possible actions in a particular market.
  5. Determining the position of the product or service market.
  6. The strategy pyramid (see Figure 1.2)

The strategy sets goals to be achieved. Tactics determines how to do this, while the program is the set of actions to be performed. Consequently, a well-designed plan is a very important part of the strategy.

  1. Defining marketing communications using marketing mix elements – product, price, place, promotion.
  2. Marketing research on the development of the industry, changes in consumer behavior so that the company is ready for all changes in the market.

In turn, the development of a new product marketing strategy contains four main sections (Fifield, 2008):

  1. The first describes the size and structure of the target market, the buyer action model and possible product positioning;
  2. in the second, approximately planned sales volume, market share and expected profit indicators for the period up to 3 years are calculated;
  3. the third one defines the target price, product distribution channels, marketing costs and structure for 1 year;
  4. The fourth describes the planning of the elements of the marketing complex (price, distribution, promotion on the market) for a long-term period.

The concept of a new product design and marketing strategy must be judged from the point of view of business attractiveness; in other words, it is necessary to determine whether the planned sales volume of the new product, costs and profit are consistent with the company’s objectives.

Figure 1.2. The Strategy Pyramid (Fifield, 2008)

In the analysis of this sub-chapter, the author concludes that it is important to explore the market before developing a marketing strategy, because only when making this, can take a further decision in developing the strategy. It is also important to follow the development stages of the marketing strategy, it begins with the definition of a company’s marketing mission and ends with a marketing research on the development of the industry so that the company is ready for various changes in the existing market. Developing a general marketing strategy is different from developing a single product marketing strategy.

According to the author, it is very important to adapt the marketing strategy for each product lifecycle, so the next section describes the marketing strategies in the individual product lifecycle phases.

THE ANALYSIS OF MERCURE HOTEL BUSINESS ENVIRONMENT

Companys’ profile

The French hotel chain Accor, which opened around 4,100 hotels worldwide, opened its first four-star hotel in Riga on May 1, 2014 – the Mercure Riga Center Hotel. Actual address is 101 Elizabetes Street, Riga. The Accor hotel chain in Riga also attracted two other hotels – the three-star hotel Ibis Riga Center, Marijas iela 5 and the five-star hotel Pullman Riga Old Town, Jekaba iela 24. Mercure Riga Center is located in a beautiful 19th-century Art Nouveau building, Riga in the center, 400 meters from the Old Town and next to Riga Railway Station. It offers 143 air-conditioned accommodations with free Wi-Fi, flat-screen HD TV, safe, hair dryer, minibar, free toiletries, tea and coffee making facilities, breakfast included in the room rate, a spa complex, fitness club, casino, 6 different size banquet and conference rooms, car parking in the hotel yard. Room service is available 24 hours a day. Mercure Hotels are standardized and offer customers the same or similar quality standards in each location, thus gaining regular customers who can choose Mercure services and be sure of the expected quality by going to specific cities around the world (Mercure Hotels, 2017).

The hotel’s goal is to offer high-quality hospitality services, and to balance the standard with Mercure’s world-renowned hotels. Enjoying guest satisfaction is the ultimate goal of the hotel. Service prices are based on quality and are in balance with competitors’ offers. The hotel is proud to be the internationally renowned Mercure brand and is well known worldwide.

According to 2016 year data, the Accor network of hotels has 240,000 employees (Accor, 2016). In particular, the Mercure Riga Center Hotel employs around 100 employees in various hospitality areas such as maids, cleaners, waiters, cooks, bartenders, casino staff, receptionists, security guards, plumbers, electricians, IT specialists, accountants, bidders, janitors, heads of all departments , and others. The functional organization management structure is chosen as the most appropriate type of organization (see Figure 2.1.), which states that despite the fact that the Director General is a key specialist who takes the most important decisions related to the hotel’s activities – marketing strategies, new markets, market positioning of the hotel, etc. However, reports, orders and tasks for lower units are managed through functional managers, functional managers are responsible for the performance of the lower units, and managers are the ones who subsequently pass on the report to the general manager of the hotel (Mercure Riga Center, 2017).

Figure 2.1. The organizational structure of Mercure Riga Center hotel (is based on a model prepared by the hotel management)

Factors affecting the company’s internal environment

Each company is limited by various factors – legislation, social events, economic situation in the country, rivals pressure, employees, etc. aspects of hotels, all of which affect these factors more than just businesses, because the number of hotels in cities, especially in Riga, is high; therefore, customers have a wide choice, so it is important to evaluate both the direct and indirect effects of external and internal environmental factors, so that action scenarios can be foreseen in different situations (Mercure Riga Center internal data, 2017).

The company’s internal environment consists of the cultural, social, and economic factors in which specific business decisions are made. The company’s internal environment is mainly made up of its employees, which is mostly one of the hotel’s biggest problems. Given that the main function of the hotel is the reception and accommodation of guests, the quality of hotel rooms and the degree of purity that hotel rooms need to provide is very important. Different hotels in Riga offer various organized and various paid work. Employees, just like customers, are entitled to choose the most suitable place for their work based on hotel offers. Loyal and reliable employees are hard to find. The hotel strives to adapt to the needs of its employees, both socially and culturally, as hotel employees are members of different nationalities and different races, hence the management of the hotel trying to adapt, within the norms, for employee needs, such as holidays for a specific holiday. However, despite the level of adaptability, it is still relatively difficult to keep employees in the company. Also, cohesion is starting to happen sooner or later, because the skills of employees to work is very different from the work of the will, which means that employees are aware of hotel standards, but for various reasons, the standards are not met (Mercure Riga Center internal data, 2017).

Consequently, the hotel manager of each unit is responsible for the performance of their direct subordinate duties, the top management of the hotel does not interfere with the work of the employees, but passes the key information to the managers, who in turn pass it on to the employees. But the transfer of such information from senior management is also relatively rare. For problems and guest complaints, information managers receive directly from customers, namely, an application has been developed in which the guest is entitled to evaluate hotel standards on a scale scale from 1 to 10, as well as to add comments. The disadvantage is that the guest mostly gives his opinion before leaving, and if there were any problems during the stay, the job managers find out only after the departure of the guests, which doubts again, or the guest will choose the same hotel on the next visit. Due to the fact that senior management does not organize any kind of work meetings for their employees, employees often perceive their direct managers’ instructions as a fiction to make extra work, so many instructions are not taken into account, which indicates obvious deficiencies in the organization of the hotel’s work (Mercure Riga Center internal data, 2017).

Factors affecting the company’s external environment

In terms of the hotel’s external environment, it can be concluded that the strongest threats to the hotel are exerted from the outside, as there are so many influential factors that are very difficult to bypass. External environmental conditions include competitors, consumers, suppliers, seasonality, demographic environment, mandatory state inspections. The Mercure Riga Center Hotel affects all of the above-mentioned external environment conditions, but the most important is the competition, consumers, suppliers, and seasonality as well (Mercure Riga Center internal data, 2017).

When looking at the hotel business in particular, the pressure of competitors is the most powerful brakes, as in Riga at the end of 2016, according to the Central Statistical Database, 316 hotels and similar accommodations, such as motels, hotels, resorts, etc., were registered, excluding campsites, guest houses, recreational vehicles, as well as taking into account that there is still a large number of places outside Riga (CSB, 2016). Each competitor’s hotel is different in terms of size and privileges, as well as offers different offers, prices and amenities that are binding not only to the guests but also to the employees, therefore, every hotel offered by the minor, the lack of any management policy, the operating procedures, both employees and the staff to choose the most convenient and suitable option for themselves. In Riga, it is easy to see how close each hotel is to each other. Most of the hotels have internationally recognized brands, so guests, often going to Riga, often choose well-known places to stay in other cities of the world, waiting for certain standards. The Mercure Hotel is also an international brand, with guests choosing this hotel to meet world-renowned and familiar standards.

The Mercure Riga Center directly affected by the Radisson Blu Hotels. Four Radisson Blu hotels are active in the center of Riga: Radisson Blu Hotel Latvija, located at 55 Elizabetes Street, Riga; Radisson Blu Hotel Elizabeth at 73 Elizabetes Street, Riga; Radisson Blu Hotel Rīdzene, Reimersa street 1, Riga, as well as in Pardaugava Radisson Blu Hotel Daugava, Kuģu iela 34,

The author chooses Radisson Blu Hotel as an example, since the author previously has work experience in two of these hotels. The internal organization of the Radisson Blu Hotel is much more thoughtful with the supervision and management of more advanced departments. Quality standards are also much higher. Internal communication is much more advanced than at Mercure Riga Center. Differences in remuneration systems prevent Mercure Riga Center from retaining its employees, as the Mercure hotel offers an hourly pay rate of 40 working hours a week, while Radisson Blu’s remuneration is offered as a piece of work, which means that employees receive remuneration for daytime cleaning. number of hotel rooms (Radisson Blu, 2017). This kind of remuneration is much higher than the remuneration for the number of hours worked. Both types of remuneration have both advantages and disadvantages. Such stuff greatly affects the hotel’s professional level, which is so much appreciated by both customers and employees, and such undeveloped nuances rage many other hotel problems. It should be noted that seasonal adjustment of employee remuneration system will allow Mercure Riga Center to more effectively control the quality of work of employees.

Indirectly, the Mercure Riga Center is affected by neighboring hotels with less than four stars and hotels with the same number of stars as the Mercure hotel. The Mercure hotel has many customers, which use hotel services for only one or two nights, so the nearby small hotels are much more profitable for customers of this kind because they are much cheaper overnight. As an example, the author would like to mention the Hanza Hotel, Elijas iela 7, Riga, a 3-star hotel, located 8 minutes from the Mercure Riga Center, which has also been the author’s work place, where the price ranges from 35.00 euros to 50.00 euros per night . The hotel rooms are just as tidy and most of the size are as large as the Mercure hotel, so many of the customers prefer this type of hotel, because they are simply cheaper (Booking.com, 2017).

One of the most important factors influencing hotel activity is consumers, or guests in this case. Consumers can find information on the hotel website at http://www.mercureriga.lv/lv/, where room reservation options, prices, offers and other factors related to hotel offers are available. In its turn, http://www.mercure.com/gb/europe/index.shtml provides information on all Mercure brand hotels, such as location, prices, range of offers, etc. Information is also available at worldwide hotel conferences where the hotel promotes its achievements and looks for potential investors, partners and new customers. If the guest of Riga has noticed the Mercure hotel, there is also an opportunity to find out the information you need at the hotel reception 24 hours a day, 7 days a week.

The hotel’s performance is very strongly affected by seasonality. Due to the fact that there is no definite mountain in Latvia, where to ski or do other winter activities, the winter months are related to tourism as silent months. The hotels are mostly half empty. Guests use hotel services related to business travel, or travel, and friends’ visits. Uncommon to view Riga city. In the winter months, the hotel’s room rates are considerably lower to be able to attract guests, because, as has been said before, Mercure has many other hotels nearby. In the quiet winter months, the hotel usually closes its floors and carries out general cleaning of hotel rooms, in particular, the hotel is lit up and prepared for the new, active season. In the winter months, as much as possible, it is trying to save financial means in order to avoid getting into debt, so the hotel’s floors are cleaned and closed. In the quiet season, fewer employees are employed in all departments of the hotel, both in cleaning, in the kitchen, in casinos, and more. (Mercure Riga Center internal data, 2017)

The hotel has close cooperation with suppliers, more precisely, the suppliers are the ones that ensure the feasibility of hotel services. Every item available at Mercure is ordered from specific suppliers. For example, the hotel’s kitchen has its own specific food suppliers. In particular, for ordering hotel cleaners, goods are ordered through the Mercure brand office in the center of Riga, which supplies standardized brand products with the entire Mercure brand to them. Chemists, detergents, garbage bags, napkins, and toilet paper cleaners are ordered by the head of the local suppliers, as these are the products that are used most quickly and the hotel needs to be delivered as soon as possible. Bed linen, towels and bathrobes are also sent to the company every evening, which is then washed, ironed, rinsed and sent back to the hotel each morning. Each operation is carried out through waybills signed by both parties, both the customer and the supplier, and such security measures should provide a hotel with impeccable quality of delivery.

True, sometimes there are situations where supplier work affects the performance of the hotel, for example, there are situations where suppliers do not add a specific product to the order due to negligence or send another product instead of the desired product. It is true that such situations are rarities, and more often there are damage to the product during transportation, which, of course, causes damage to the hotel, because, despite the fact that the product is insured and it is possible to recover money for damaged goods or to change the product, but it is time-consuming process, and the work of the hotel is ongoing and the unit managers count on a specific time to receive the goods. Cleaning products such as toilet paper, napkins, soap, tea, etc. are used daily if any of these items are missing in the hotel, which means that there are hotel rooms that can not be offered to customers, resulting in loss of income . Due to the fact that the hotel’s staff tries to use the goods as efficiently as possible, there is no inventory in the hotel, so each supplier’s delivery options are very important. (Mercure Riga Center internal data, 2017)

Understandably, Mercure Riga Center Hotel is also influenced by price changes from suppliers, for example, if the price of goods produced by the Mercure brand is raised, the hotel still needs to be purchased, as already mentioned before, with Mercure The brands are standardized and all Mercure hotels look the same. Consequently, in order to ensure the universal Mercure standards, these items must be in each hotel room. Also, local suppliers often change prices and quality. (Mercure Riga Center internal data, 2017)

THE ANALYSIS OF MERCURE HOTEL MARKETING STRATEGY

Hotel pricing policy

Price is the only element of the marketing mix through which the company makes a profit, and taking into account the fact that each business is based on profit, therefore, this element is also very important in Hotel Mercure Riga Centre, so that the company earns profits rather than losses throughout the year.

At the Mercure Riga Centre Hotel, in the price setting for each service, the company evaluates the various factors affecting whether the price is in line with the quality of the service, whether the consumer price seems acceptable and appropriate, and to follow the prices of direct competitors’ services and the average price in the industry in order not to lose competitiveness.

Taking into account that the tourism business in Latvia is markedly seasonal, therefore the company’s price targets vary greatly depending on the time of the season. During the season, the hotel services have the highest demand, the hotel services are offered even at the highest permissible prices, taking into account competitors and quality of services. This tactic is also used outside of the season for world events or celebrations. The season is considered to be from June to September. During the interurban season, which runs from April to May and from September to November, the hotel, at this time the hotel’s occupancy is gradually diminishing, the company is trying to attract new consumers, apply low discounts or offer lower priced packages with marketing communications. During the off-season, the company uses the strategy of retaining the market, because at that time the hotels have the least burden, the competition is increasing, and therefore the hotel offers great deals and discounts, the company also uses various collective shopping portals to offer services at a discount.

Hotel “Mercure Riga Centre” prices for one night in the summer season in 2017 (Booking.com, 2017):

  • Standard for one person – EUR 55
  • Standard double – EUR 65
  • Standard Triple Room – EUR 85
  • Business (Semi-lux) – EUR 120
  • Luxurious apartment – EUR 220

Compare prices with your nearest competitor Radisson Blu Hotel Latvija most popular room prices for summer season in 2017 (Booking.com, 2017):

  • Standard for one person – EUR 51
  • Standard double – EUR 68
  • Luxurious apartment – EUR 238

Comparing the prices of rooms for the summer season in the hotel “Mercure Riga Centre” and the closest competitor to the hotel Radisson Blu Hotel Latvija, it can be concluded that prices are very similar. Considering that the location of these two hotels is 3km away and the range of services is very similar, Radisson Blu Hotel Latvija can be considered a direct competitor for the Hotel Mercure Riga Centre. It is very likely that consumers will choose the price of services directly from the choice of these two competing hotels, therefore Hotel Mercure Riga Centre should also follow the price changes of competitors.

Distribution Analysis at Mercure Riga Center

A variety of products are needed for the provision of hotel services everyday. The company provides these products with inbound logistics, the hotel cooperates with distribution channel staff – suppliers, ordering various hotel products. The company makes product calculations to avoid product defects and to know when to order products in order not to disturb or interfere with the hotel’s operations. Mercure Riga Center has entered into agreements with different suppliers when a product is needed, the head of a particular department orders the required supply company, the supplier fulfills its obligations and delivers the order to the hotel, payment is based on the payment schedule for the post-payment. Suppliers order goods for hotel restaurant and hotel management.

It is important for a tourism company to have its services available to consumers continuously, so that Mercure Riga Center can reach its potential customers using either a direct distribution channel or an indirect or composite distribution channel, which also includes intermediaries. Hotels use the following direct distribution methods:

  • Phone booking;
  • Reservation via email;
  • Reservation at the hotel;
  • Hotel reservation system on the website.

Customers can book their preferred hotel services through reception by phone, email or on-site reception 24/7, which allows them to buy or book hotel services at any time. However, nowadays, the largest number of tourists choose to buy accommodation, or book online. Therefore, in January of this year, Mercure Riga Center created a new website where an advanced reservation system was created, so that customers can quickly and simply book their desired services directly on the hotel’s website. However, the company needs to work on streamlining processes because of various system problems there have been situations when the reservation system on the website does not work and it risks losing potential customers. From the indirect distribution methods, Mercure Riga Center uses the following methods –

  • Online Travel Agents or DRS Systems – Agoda, Booking, HotelsCombined, BalticHotelsonline;
  • Online Travel Portals – TripAdvisor, Hotels.com;
  • Social Networks – facebook.com;
  • Travel agencies, tour operators.

The strategy of the Mercure Riga Center’s expansion depends largely on the latest information technology and the Internet. The company seeks to secure its position in all of the most popular computerized reservation systems, as well as on the most popular online travel portals offering hotel services. This used brokerage service allows you to attract more customers and provide the hotel with higher demand.

Analyzing the distribution system of the hotel, the author concludes that the company actively cooperates with various computerized distribution channels in order to reach as many consumers as possible, but the hotel must seek to attract more foreign tour operators to attract new customers, however, the author believes that Mercure Riga Center needs to look for new distribution channels to attract and interest not only foreign tourists but also local Latvian tourists.

Sales promotion at hotel Mercure Riga Centre

The Mercure Riga Center pays great attention to the company’s promotion activities, in order to successfully complete the sales head of the beginning of each year, together with the marketing specialist and the hotel manager draws up a marketing plan, however, depending on the various factors affecting the marketing plan is regularly corrected.

The hotel has been using the integrated marketing communications package, which consists of advertising, sales promotion, public relations and direct marketing in the Mercure Riga Center.

Currently, the Mercure Riga Center uses promotional media advertisements that are located next to the hotel on the, which points to the hotel and informs about the services it offers, this advertising helps to attract foreign tourists traveling by the road, however, the author believes that the banner should also be located a few kilometers before the hotel, otherwise a part of the potential customer may not be able to see the banner in time.

Widespread use of internet advertising, Google Adwords is currently being used for advertising, which means that hotel services are advertised to consumers searching for hotel-related information. An SEO optimization system is also used to provide hotel services by entering certain word combinations displayed on the first pages of search engines. This is a good way to advertise consumers who are looking for specific services rather than specific businesses.

In the Internet environment, the information published on hotel services in various Latvian websites and catalogs, for example, www.viesunamiem.lv; www.latvia.travel.lv; www.1188.lv; www.konferencem.lv; www.precos.lv; www.visalatvia.lv u.c. As already mentioned, the company also follows up the availability of information on services and booking options in a variety of computerized reservation systems, such as www.booking.com and on-line travel portals such as www.tripadvisor.com, as most foreign tourist information is searched directly on these websites. The company also uses the ad on the social site www.facebook.com, so far the results show that this portal works successfully to post ads about specific events hosted by the company, it helps to attract more new customers.

For promotion, Mercure Riga Center actively advertises its events at exhibitions in Latvia, for example, the hotel services were advertised at the Balttour exhibition, restaurant services at RigaFood, event hosting services at Weddingdayexpo, as well as various tourism exhibitions abroad – Lithuania, Estonia, Poland, Germany. The hotel has a specialized booth with all the essential information about the company. However, the author believes that the exhibition is not an effective way of promoting, for example, Balttour exhibitors mostly visit consumers to choose trips abroad rather than to see Latvian hotels. Also, foreign exhibitions are costly. Therefore, the author believes that the hotel should analyze the usefulness of these exhibitions more closely. The hotel presents its corporate and stand-alone customers Christmas gifts with a variety of souvenirs with hotel’s logo and gift card services. Although the cost of such a move is rather high, it is important, in the author’s opinion, to remind themselves of independent customers and to ensure that they will continue to use the hotel services.

Mercure Riga Center also uses direct marketing communications. The hotel uses the services of www.mailigen.lv, through this program it is possible to send e-mails and SMS messages to customers in the database to inform hotel clients who are registered in the database about special offers, discounts or events organized. The plus is that in this database customers are divided into divisions, such as business customers, restaurant customers, spa clients, event attendees, etc., so the hotel can easily choose which group to send the information more appropriate. This year, in the winter season, the hotel used direct marketing to increase demand for conference rooms. A database was created with the members of various associations of Latvia, to whom e-mails with special offers for rent of conference rooms, members of associations were sent. The next day, the hotel sales specialist phoned the members who did not respond to e-mails. In general, given the low costs of this direct marketing, the hotel’s advantage was quite high as it attracted new customers.

The company should continue to seek new distribution channels in Latvia and abroad in order to attract as many consumers as possible in the off-season. Looking at the promotion activities of the Mercure Riga Center, the author believes that the company needs more analysis of the types of promotion that are beneficial and achieve the desired result. The range of guides should be increased directly during the off-season to increase the load. The company now pays great attention to the workforce, it is necessary to introduce the motivation and training system, and also to control the quality of service in the company, the author believes that professional and friendly staff in the hotel business is one of the most important conditions for increasing the number of loyal customers. The Mercure Riga Center needs an uninterrupted process, so it is necessary to eliminate as much as possible all the factors that could disturb it. Looking at the physical evidence of the hotel, the author concludes that the hotel rooms are tastefully and cozy, but you need to think about the personality traits of the staff in order to create a unified image of the company.

CONCLUSION AND PROPOSALS

Looking at the promotion of Mercure Riga Center’s services on the market, the author concludes that the hotel is using a wide range of integrated communications, however, the hotel should more closely evaluate the efficiency and benefits of all types of promotion, so that costs do not exceed the benefits.

The author believes that the most effective way to move the company is through e-marketing, as already mentioned in the work, most consumer hotel services are chosen directly from the Internet. As the most inefficient way of promoting, the author of the work, believes exhibitions, because of the costs are high, but the number of attracted customers is small.

The author believes that, in order to be able to meet the hotel’s customers by means of promotion, it is necessary for the company to develop a map of the objects of the closest view, so that the customers are informed about what can be viewed, and, in addition to the bonus, they may have tours to these attractions.

One of the specific elements of a service marketing complex is – man. For each service provider, it is important that a company is provided with a professional, qualified and dedicated employee. Mercure Riga Center’s quality of service and customer satisfaction depends to a large extent on the company’s staff.

For the hotel, it’s important for her staff to be knowledgeable, kind and responsible. Considering that work is largely due to foreign tourists, language skills are also an important factor for employees.

However, the company sometimes faces problems with the provision of professional staff. It is affected by seasonality, during the season, the company employs more employees, especially in the restaurant, while during the off-season the company is not able to provide all the jobs to the employees, therefore, some employees have to leave. Therefore, employees often change in the company and each employee has to be trained again.

According to the author of the work, the organizational structure of the Mercure Riga Center hotel is designed so that the staff member of each department would know, under the direction of a manager, that it is located, what tasks are to be carried out and what responsibility it has for the work done. As well as on the first day of every week, the company organizes a meeting of heads of departments where heads of departments report on the work done and discuss weekly plans with the company’s managers, and later the head of each unit informs their subordinate staff about future plans.

However, the author believes that the hotel should develop a system of employee motivation, which could increase employee loyalty to the company and reduce the company’s exit. Also, in order to improve the qualifications and professionalism of the existing staff, the company could provide employees with training training, which would also benefit the company, which could help to increase the quality of service provision. The company must work to ensure that each employee feels like an important part of the overall business mechanism.

The author of the paper believes that one of the best ways for a company to assess the quality of services is to use the “secret customers” method. This means that employees are not informed when a secret customer arrives, who receives hotel services and then provides a detailed account of service advantages and disadvantages. The author believes that this is a good way to motivate employees to serve their clients more professionally.

The second element of marketing marketing is the process. The main task of the process at the Mercure Riga Center is to ensure continuous availability and reservation of services around the clock and seven days a week, as well as to receive the necessary information and services that the customer needs.

As we found earlier in our work, it is very important for the company that all reservation systems in the company are continuously operating, therefore, the company must minimize all technical conditions that may interfere with the operation of computerized reservation systems.

Considering that the Mercure Riga Center has had problems when the website reservation system does not work for several hours, it is possible to lose customers, it is necessary to analyze the reasons and to eliminate them, if necessary, to change system maintenance, so that such problems do not occur in the future.

Taking into account that the hotel receives the employee continuously, it provides information, on-site reservation, by phone or by e-mail continuously, this is important in order not to lose customers. However, there are cases when the receptionist has gone out or is doing other work, so it can “lose” the call and most likely the client himself; therefore, the author believes that the hotel Mercure Riga Center should introduce a call screening system to check all missed calls and a call recording system will be displayed transparently to control the quality of the employee’s service.

The process as hotel staff serves customers is also important. The company would need to shorten as much as possible the waiting process in the restaurant, as often due to the wrong number of employees in the season, the process is prolonged and customers are dissatisfied due to long wait.

The guest acceptance process for those who have already booked a hotel room in the company has been designed to the last, so the client does not have to wait. Therefore, it is time for the guests to quit the room and how many new guests can arrive to ensure that the preparation process is not delayed and customers do not have to wait.

The last of the specific elements of the service are physical or material evidence. Considering that physical evidence is the part of the company that a customer can see, it is important that the environment in the company be tidy, tasteful and powerful, so that the client would like to return.

 

BIBLIOGRAPHY

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