IMPACT OF BRAND EQUITY

ON MARKET

SUSTAINABILITY AND

GROWTHCritical Evaluation Of The Premier Inn Brand

ANIKET KOLAPKAR

Dissertation presented to Mr. Karen Kalantari-Nazari

of the UNIVERSITY OF WEST LONDON

In partial fulfilment of the requirements for the degree of

Masters in Business Administration

UNIVERSITY OF WEST LONDON

October 2013

The research looks at the role of brand recognition in market sustainability and future growth. The

report considers the case of Premier Inn, evaluates the consumer perception about the brand and

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recommends key strategies for developing a sustainable competitive advantage.

ACKNOWLEDGEMENT

I would like to thank my supervisor Mr. Karen Kalantari-Nazari

who has supported me throughout my dissertation with his

patience and knowledge whilst allowing me to work in my own

way. I am blessed that I had this opportunity to work under his

guidance. Also, a special thanks to my family who supported

me throughout my studies and all endeavours of my life.

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Table Of Contents

ABSTRACT.............................................................................................................................................. 5

1.0 INTRODUCTION................................................................................................................................ 6

1.1 Purpose of Study............................................................................................................................6

1.2 Proposed Research Questions:..................................................................................................... 6

1.3 Premier Inn: Company Description................................................................................................7

2. LITERATURE REVIEW......................................................................................................................10

2.1 The Hospitality Industry of UK......................................................................................................12

2.2 Brand Management In The Hospitality Industry...........................................................................16

2.3 Consumer Behaviour In Hospitality..............................................................................................16

2.4 The Social Media......................................................................................................................... 17

2.5 Role Of Twitter, Facebook & YouTube Blogs In Brand Management..........................................19

2.5.1 Facebook.............................................................................................................................. 20

2.5.2 Twitter................................................................................................................................... 20

2.5.3 YouTube............................................................................................................................... 21

2.5.4 Corporate Blogs....................................................................................................................21

2.6 Social Media & The Mobile Marketing..........................................................................................22

3. RESEARCH METHODOLOGY..........................................................................................................25

3.1 Qualitative Research....................................................................................................................26

3.2 Quantitative Research..................................................................................................................27

3.3 Data Collection Method................................................................................................................27

3.3.1 Primary Data.........................................................................................................................28

3.3.2 Secondary Data....................................................................................................................28

3.3.3 Population.............................................................................................................................28

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3.3.4 Sampling Technique.............................................................................................................28

3.4 Surveys........................................................................................................................................ 29

3.5 Interviews..................................................................................................................................... 30

3.6 The Research Strategy................................................................................................................ 31

3.4 Data Analysis............................................................................................................................... 34

3.5 Ethical Issues............................................................................................................................... 34

3.6 Data Quality, Validity and Reliability.............................................................................................35

3.7 Limitations of the Research..........................................................................................................35

4. KEY FINDINGS & ANALYSIS........................................................................................................... 37

4.1 Survey.......................................................................................................................................... 37

4.2 Interviews..................................................................................................................................... 50

5. CONCLUSION................................................................................................................................... 52

5.1 Recommendations....................................................................................................................... 54

5.1.1 Build a Branding Strategy.....................................................................................................54

5.2 The Social Media Strategy...........................................................................................................56

5.3 Research Limitations....................................................................................................................58

BIBLIOGRAPHY.................................................................................................................................... 60

APPENDIX............................................................................................................................................. 69

Appendix 1: Porter’s Five Force Analysis: United Kingdom Hotels & Motels.....................................69

Appendix 2: Interviews....................................................................................................................... 70

Interview Excerpts – Ms. Maria Andrew (Sales & Marketing Manager, Premier Inn).....................70

Interview Excerpts – Mr. Ali Khan (Revenue Manager, Premier Inn).............................................72

Appendix 3: The Questionnaire..........................................................................................................75

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ABSTRACT

In fiercely competitive markets, one of the challenges that lie before the organisations is growing in the

future or atleast sustaining its existing market share. Clearly the double dip recession, gloomy outlook

of European economies and sovereign debt crisis had a profound impact on modern day’s businesses.

Most businesses are looking for various internal advantages that can enable these businesses to meet

the challenges of market sustainability and future growth. Amongst various parameters, that can enable

a business to grow in future or atleast sustain its market share, are developing human assets,

improving quality (customer services in services industry), developing brand equity or looking for new

channels of advertising i.e. social media and mobile marketing. Most established businesses are

increasingly investing in brands and social media to keep growing in future and sustain its share of the

market. The question however is, does brand equity meets the challenges of market sustainability and

future growth. To prove this point, one of the established brands in the budgeted hotel chains was

chosen and the image of being ‘affordable’ was tested through surveying various consumers in the

marketplace. The second part however deals with the role social media in meeting the challenges of

market sustainability and future growth.

The research aims at examining and investigating the influences of brand equity in competitive

advantage and performance of Premier Inn Group of hotels based in the United Kingdom. According to

the existing literature, brand equity is the value added for products and services that will help

businesses obtain greater competitive advantage and improved performance, hence sustaining the

market share and growing in future. In this study, different dimensions for antecedent of brand equity

including brand awareness and brand recognition are being considered. The results indicate that the

brand equity has a significant positive relationship with competitive advantage and performance. Market

turbulence as a moderating between competitive advantage and performance do not moderate the

relationships. Thus, theoretical and managerial contributions are provided and limitations of the current

study and suggestions for further research are introduced. The first of the research proved that Premier

Inn has kept its image consistent and hence this fact was reflected in growth of the brand in the

financial markets and revenues. The second part of the research observed that although Premier Inn

realises importance of social media advertising strategy, but the brand has not yet been able to fully

integrate the social media strategy with overall marketing processes. The report concludes with

recommending an appropriate branding and social media strategy that Premier Inn can utilise to a.)

sustain its market share and b.) growing in future.

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1.0 INTRODUCTION

Business oracles believe that brands communicate with the consumers; it reflects the hidden value

associated with the brand. But does brand recognition effectively impacts the market sustainability1 and

its future growth. It would hence be interesting to investigate whether brand communication meets the

challenges of market sustainability and future growth. Furthermore, over the past few years it has been

observed that internet has revolutionised the way people and organisation used to communicate, hence

enabling both consumers and brands to overcome time and distance constraints. With the advent of

online communities, people from around the world connect with each other either through blogs, online

communities, similar interests or even online gaming. Not to mention, but this evolution in technology is

also attributable to the rise of social media. Today’s fiercely competitive industries are governed by the

intensive knowledge and through deploying intangible assets. One of the biggest challenges that

organisations face is recognition of the brand name and communicating with general consumers.

Competition within the mid-market is very strong as a result of independently owned hotels, small group

owned hotels and larger corporately owned hotels all operating within this sector. The larger corporately

owned hotels and to a lesser extent the small group owned hotels generally have a well focused

strategy which encompasses clear strategic direction, clear branding, well developed sales and

marketing functions and economies of scale. Hotels generally accept that a much more profitable

customer (due to factors such as reduced marketing costs and higher revenues that can be derived

from such customers) is the customer that returns to the hotel regularly each time that he/she requires

accommodation in the area in which the hotel is located. In effect a loyal customer is one who, as

(Crittenden, 2011) say, “ recognise a relationship built on trust and commitment between the buyer and

seller”. Loyalty of the existing customer base is one way in which mid market hotel chains can face the

increased competitive environment. However loyalty is not earned easily or quickly and is certainly

difficult to achieve due to the inconsistency in service levels which can result in hotels.

1.1 Premier Inn: Company Description

In the hospitality sector, brand equity plays an important role in determining the market share of a hotel.

Premier Inn is a hotel chain of Whitbread Plc which is engaged in operations of hotels, coffee shops

(Costa) and restaurants. It would hence be important to analyse the hospitality sector that would in

return reflect the nature of intense competition, which would hence outline the importance of branding

strategies.

1 Market sustainability in this context means upholding its present status, and not losing the current market share.Page 6 of 69

7.908.00

8.10

8.608.70

7.40

7.60

7.80

8.00

8.20

8.40

8.60

8.80

2008 2009 2010 2011 2012

Value of U.K. Motels and Hotels (£ billion)

Value of U.K. Motels and Hotels (£ billion)

Exhibit 1: United Kingdom Hotels & Motels Industry Value (Marketline, 2012)

Premier Inn especially competes in the economic provision of hotel rooms and accommodation. This

means that the hotel needs to compete against various other brands to gain their share of the market.

Although there is lack of product differentiation in a budgeted hotel segment but through providing

excellent customer services renowned hotel brands like Premier Inn can expect to gain market share.

Whilst branding is a crucial factor in hospitality industry sector, the contribution of social media in the

today’s modern context of corporate world cannot be undermined. As shown in exhibit 1 above the

value of motels and hotels in the United Kingdom has been on the increase since 2008. This clearly

testifies the fact that the hotel industry, by largely, has been unaffected by the great recession. Most

industry experts and analysts expect that by 2016 the overall value of this industry will reach £12.3

billion by 2016. The industry is predominantly dominated by the big global players who vie intensely to

grab their share of the market. Premier Inn operates in the budgeted hotels and not in the luxury hotels

which further intensifies the level of competition. Within the hotels and motels industry, where switching

costs are rather negligible and competing on price alone is no longer a key to success, brand

recognition and innovation helps to attract first-time customers and also repeat business, hence

sustaining the key markets and also growing them in future. Buyers are generally price sensitive,

except in the premium market. Innovation is also vitally important in attracting customers, as competing

on price alone can be difficult. Suppliers include providers of various goods and services, as well as a

qualified workforce. The quality and availability of supplier services and equipment is essential to the

hotel and motel industry. Hotel operators are reliant upon sophisticated technology and systems,

including technology utilized for property management, procurement and reservation systems. Due to a

high reliance on sophisticated technology and systems and the growing importance of mobile

communication channels, some suppliers may exert strong supplier power. Globalization is an

important key driver within the industry, with emerging and developing industries offering significant

opportunities; however, it also involves employing various business strategies and extra costs. Some of

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these emerging industries, such as in Tunisia and Egypt, which had previously provided strong areas

for growth, have been hit by political disturbances. These events may have upset consumer

confidence. How quickly these industries recover remains to be seen, but the currently volatile nature of

the tourism industry as a whole, will directly affect the hotel and motels industry until confidence in the

global economy is restored (Crittenden, 2011). The importance of cross border expansion is another

method of grow organically and the Premier Inn’s brand equity has a critical role to play in this

expansion. It is hence quintessential for Premier Inn places a huge emphasis on its branding strategies

that would consequently impact its sustainability on the present markets (emerged economies) and

future growth (emerging economies).

Amidst the fiercely competitive hotels and motels industry the Premier Inn as brand carries strong

strengths. Premier Inn is the largest chain of budgeted hotels of 2012 and continues to expand in the

European economies. Premier Inn was awarded the ‘Most Improved Brand of the Year 2012’ by an

industry source specializing in providing market intelligence across sectors. Premier Inn has been

expanding its product offerings to the customers through opening more than 4000 rooms in its 29 hotels

in the FY 2012 and more than 4200 rooms in FY 2013 only in the United Kingdom. This means that

company generates revenue through competing on the volume rather than value. This proposition

reflects that marketing and managing is quintessentially important as the customers must perceive

‘Premier Inn’ as an affordable yet a comfortable place to spend money on. With more and more

customers around the world comes to the United Kingdom as a tourist this mean that demand of hotels

and motels will continue to grow in the near future.

1.2 Purpose of Study

The initial catalyst for this study - “An analysis of customer retention and loyalty in the mid-market hotel

sector of the UK” - was as a result of industry commentators writing about future challenges which will

face the hotel industry in the UK – especially the independent mid-market hotel sector. Deloitte (2012)

has written about the “significant growth in the budget lodge sector” and the “pressure from

international brand operators to gain a foothold in the UK”, both of which, along with the expanding UK

corporate branded hotel sector, will aggressively attack the middle market. Furthermore Marketline

(2012) discussed that the hospitality sector (especially mid market hotel chains) is the most competitive

industry sectors and customer loyalty remains one of the critical success factors (Please refer Appendix

1 for detailed analysis of Porter’s 5 Force Analysis).

Building a brand reputation in a hospitality industry not only enables to engender consumer brand

loyalty but also promotes market sustainability and foster future growth. One of the critical factors that Page 8 of 69

most brand managers concentrate is their brand’s social media strategy. Most brand managers believe

that traditional brand management practices are passé, in fiercely competitive environment social

media is the prime channel to reach and communicate with customers. In simple words, social media is

an electronic form of communication where information can be shared through messages, videos and

pictures. There are various media such as Facebook. Google Plus, LinkedIn, Twitter etc that are used

to share information between friends. This concept is now widely used by the brands to communicate

with consumers. This thesis will focus on the role of brand management in the context of Premier Inn

and also how can Premier Inn utilise social media in promoting its brand.

1.3 Proposed Research Questions:

Research Question 1: Does Premier Inn’s brand recognition meets the challenges of market

sustainability and growth?

Sub Hypothesis 1: Most consumers hold positive opinions about the Premier Inn brand.

Sub Hypothesis 2: Premier Inn is able influence customer loyalty through providing unique services

Q2. Does Premier Inn’s social media strategy suffice to meet the challenges of market

sustainability and growth?

Sub Hypothesis1: Most consumers are aware about Premier Inn’s social media presence and have

subscribed to their social media pages.

In the coming section a brief discussion about the literature relevant to the brand management will be

discussed in detail. It will also be imperative to discuss role of social media in the context of its use in

the hospitality sector.

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2. LITERATURE REVIEW

The investigation of the literature concerning factors which influence retention and loyalty was focused

mainly on academic journals. Specifically, journals which concentrated on the hospitality industry, the

field of service quality and of services marketing were searched.

Product characteristics - Assaf et al (2013), Asmussen et al (2012) and Brown (2002)

Pricing issues – Bowie (2012), Chen (2013), Martin (2012) and Urde (2011)

Relationship marketing – Bharadwaj et al (1993), Brotherton (2004) and Crittenden (2011)

Loyalty strategies –Ostrom and Iacobucci (1988), McDougall et al (1998) and Mittal and Lassar (1998)

Social Media Marketing – Berkowitch (2010), Gensler (2013), Jung et al (2013) and Mowat (2010).

A customer’s experience of a hotel stay will involve both tangible and intangible elements, any one of

which could illicit positive or negative perceptions and could therefore influence the propensity of the

customer to reuse the particular hotel on a future occasion. If existing mid-market hotels are to retain

their existing customer base and ensure loyalty of their current customers, managers must ensure that

customers’ expectations are at least met and if possible exceeded. Therefore in attempting to

determine the factors that would influence a customer’s loyalty to a hotel or a hotel’s retention of its

existing customer base, a wide ranging research analysis will be required into the rich complexity of

factors which influence the decision to re-purchase.

The hotels of the budget lodge sector and the upscale corporate sector are generally highly branded

which confirms the observation by Kunz (2012), that branding has become a core management

practice. But why has branding become a core management practice in the hotel industry. Many

industry insiders believe that hotels are generally offering high levels of service, quality restaurants and

a range of added value offerings which is resulting in a difficulty in being differentiated from the

competition. One way to move ahead in differentiation is brand building where an emotional attachment

beyond the services offered is provided. This has been the driving force behind the brand building of

the budget lodge sector and the upscale hotel sector. The independent hotel is generally unable to

build a brand on their own although through marketing alliances with other independent hotels such

hotels can adopt a branding policy (Kunz, 2012). From a theoretical perspective creating a

differentiated brand is relatively simpler, but the challenge lies in creating a distinctive feeling

associated with the brand. It is this unique feeling associated with the brand that provides a basis for

the longer term relationship with the consumers. Most of the brands die due to lack of exclusiveness

associated with their brand personality i.e. lack of product/service features and lack of customer

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satisfaction. It can hence be said that brand recognition holds a unique importance creating a

sustainable competitive advantage and future growth (Leaver, 2002).

Hence, branding is one of the key factors that hotel chains can use to win over customers and earn

their loyalty. Zougaeli (2012) describes sustainability branding as the process of creating and

maintaining an identity of a specific product, service, or business that reflects the underlying value

associated with the product or service. A brand is only perceived as being sustainable if it can credibly

convey sustainability benefits which are noticeable by and relevant to the consumer. Opposed to the

term green brands which mainly focus on environmentally sound business practices, sustainability

brands additionally acknowledge the social dimension of providing products and services. This entails,

among others, health and safety issues resulting from direct or indirect product use (consumption level)

as well as the conditions under which a particular product is produced (production level). The physical

protection and well-being of people at work (i.e. employees as well as workers within the supply chains)

are important indicators of sustainability brands and sustainability marketing in general which adheres

to the triple bottom line of ecological (environmental), social (equity), and financial (economic)

sustainability (Harris, 2007). The importance of market sustainability and future growth is not only

imperative for the brand but it also outlines that consumers will be ensured about the desired features

of a particular product or service. For instance, brand recognition of Premier Inn will reinforce

customer’s belief of getting a desired level of services, i.e. location, affordable prices, customer

services etc. It is hence that most brands invest heavily on the branding activities, hence ensuring that

their market presence would be sustained in coming years and that the brand will grow in coming future

(Özsomer, 2012).

Yada (2007) asserts that a brand must be able to evoke positive or negative feelings, especially in the

context of sensitive social and ecological issues. The more positive the perceptions and feelings are

towards a brand, the higher will be the likelihood of identification and loyalty amongst consumers. It is

therefore crucial in sustainability marketing to build up strong brands. In doing so, companies face far-

reaching decisions in the areas of brand positioning, sustainability brand name selection, and

sustainability brand development, in order to create and build sustainability brands that consumers

associate with social and environmental added value (Gensler, 2013).

2.1 Product issues

The central issue of the problem facing mid-market hotels is the question of whether their existing

customers will defect down to budget hotels or trade up to upscale (4 star) properties. These are two

categories of hotel with clearly differing product characteristics What physical attributes of an hotel are

important to the customers of mid-market hotels and are mid-market hotels satisfying customer

requirements. The physical (or technical) attributes of an hotel are extensive and complex and include

the visible aspects of the exterior, foyer, restaurant and bar, public areas, bedroom, leisure facilities

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where provided and the functional aspects of services provided by hotel employees (e.g. quality of

service delivery) within these areas. Technical aspects also include cleanliness, quality of furnishings

and fittings, size of rooms, aesthetics, quality of bathrooms, bedroom facilities, restaurant & bar design

and style whereas Functional aspects also include hotel reputation, style of services offered and

empathy.

Assaf et al (2013), Asmussen et al (2012) and Brown (2002) have all measured the attributes of hotels

and their relative importance to hotel customers and compared these to the attributes which hotel

management were providing. All these studies showed that management believed their customers were

demanding a greater specification of technical hotel product than the customers were themselves

requiring. Additionally, it was found that management was placing greater importance on the technical

elements of hotels rather then the functional elements. There will of course be a base level of technical

aspects that must be attained to satisfy any hotel customer. Budget hotels and upscale hotels owned

by larger groups are invariably heavily branded and trade under well known and highly promoted brand

names e.g. Travel Inn, Travelodge, Holiday Inn Express, Thistle and Marriot. These brand names have

been established as a result of their well researched technical attributes and their consistency of

product delivery. Consistency of product is important to meet or exceed customer expectations and if

the independent mid-market hotel is to be competitive against the group hotels then consistency of

product quality must be achieved.

2.2 Pricing issues

As previously stated, the price charged by hotels invariably increases as the official star rating of the

hotel increases i.e. a 2 star budget lodge will charge a much lower room rate than a mid-market 3 star

hotel which will in turn charge a lower room rate than a 4 star corporate hotel. Are some customers

willing to pay a higher price for the extra technical and functional attributes of an upscale hotel and

some in turn willing to accept the limited technical and functional attributes of a budget hotel in return

for paying a much lower price? When these two statements are considered, the immediate question

that arises is one of whether mid-market hotels are adopting a suitable pricing strategy in today’s

marketplace to be seen as competitive.

The intangibility of a hotel room and other hotel services makes the area of pricing very difficult Bowie

(2012). The dilemma of the chosen pricing strategy can be illustrated as follows. Pricing of hotel

services may be cost-orientated, the advantage of which is that a profit will be achieved. However, the

disadvantage is that a price, which is too high for some customer segments, may be set. Competition-

orientated pricing may result in a competitive price in the marketplace being set that may or may not

cover costs. Demand-orientated pricing applied rigidly across all customer segments simultaneously is

difficult to manage and implement and may also not cover costs. However, another demand-orientated

pricing policy is differential pricing (charging different prices to different customer segments) and this

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has been shown by Chen (2013) to be appropriate for service firms, including hotels. In their study of

differential pricing for services Martin (2012) concluded that differential pricing was an appropriate

strategy when “the target market can be divided into narrow segments” and past demand by segment

can be estimated. This is relatively simple for hotels to achieve, as it is common practice for hotels to

segment, as a minimum, their customers into business customers, Conference customers, Individual

leisure customers and Group leisure customers for example. Past demand can be estimated from

historical room occupancy data (Urde, 2011).

2.3 Relationship marketing and Loyalty Strategies

Bhardwaj et al (1993) defines the promotional mix as Personal Selling, Advertising, Sales Promotion,

Direct Marketing, Publicity, Sponsorship, Exhibitions, Corporate Identity, Packaging, Point-of-Sale and

Word of Mouth. It is beyond the scope of this research to fully investigate the effectiveness of all areas

of hotels’ promotional mix strategies in securing customer retention and loyalty. However there are

recurring themes of the promotional mix within the literature of hotel customer retention and loyalty that

do merit further discussion and investigation, these being loyalty strategies, relationship marketing and

branding.

Any investigation into customer retention and loyalty must consider the issue of Loyalty cards, which

are as prevalent in hotels as any other retail or service situation. “Companies can boost their profits by

100% through retaining 5% more customers” Ostrom and Iacobucci (1988). This is a powerful financial

incentive to achieve success with any loyalty card scheme whose objectives are to reward the

customer, generate customer information, maximise the share of customer and manipulate the

customer’s buying behaviour McDougall et al (1998). Additional benefits of loyalty card schemes can be

complex as studies by Mittal and Lassar (1998) concluded that if customers stay longer and buy more

it encourages employees to remain loyal which increases their productivity and job satisfaction and

therefore increases service quality and customer satisfaction. However, cautionary considerations for

loyalty card schemes in attaining customer loyalty include instances where the customer is loyal to the

reward as opposed to the product (McDougall et al, 1998). In this situation no sustainable loyalty is

achieved, even when the customer is satisfied, because whenever a competing supplier offers a more

attractive reward scheme the customer will switch to attain the greater rewards.

Loyalty cards schemes fall within the realm of Relationship Marketing (or one-to-one marketing) which

is defined by Brotherton (2004) as being at the opposite end of a “marketing continuum” from one off

transactional exchanges, the other end being on going regular exchanges between the buyer and

seller. However relationship marketing involving loyalty schemes can, according to Crittenden (2011),

be often no more than short term tactical sales promotions.

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2.4 The Hospitality Industry of UK

The UK hotels & motels industry has been fluctuating in recent years. Analyst and business insiders

expect solid growth from 2016. The UK hotels & motels industry had total revenues of £10 billion in

2011, representing a compound annual growth rate (CAGR) of 2.4% between 2007 and 2011. In

comparison, the French and German industries grew with CAGRs of 1% and 1.8% respectively, over

the same period, to reach respective values of £17.5 billion and £18 billion in 2011. The number of

hotels & motels increased with a CAGR of 0.4% between 2007 and 2011, to reach a total of 40.5

thousand in 2011. The industry's volume is expected to rise to 42 thousand hotels & motels by the end

of 2016, representing a CAGR of 0.8% for the 2011-2016 period. The leisure segment was the

industry's most lucrative in 2011, with total revenues of £ 6.5 billion, equivalent to 65.7% of the

industry's overall value. The business segment contributed revenues of £ 3.4 billion in 2011, equating to

34.3% of the industry's aggregate value. The performance of the industry is forecast to accelerate, with

an anticipated CAGR of 5.8% for the five-year period 2011 - 2016, which is expected to drive the

industry to a value of £ 13.2 billion by the end of 2016 (Marketline, 2012).

UK’s hospitality industry is dominated by large international players, who compete intensely for a share

of the market. Within the hotels and motels industry, where switching costs are rather negligible and

competing on price alone is no longer a key to success, brand recognition and innovation helps to

attract first-time customers and also repeat business. Suppliers include providers of various goods and

services, as well as a qualified workforce. Due to a high reliance on sophisticated technology and

systems and the growing importance of mobile communication channels, some suppliers may exert

strong supplier power. Globalization is an important key river within the industry, with emerging and

developing industries offering significant opportunities; however, it also involves employing various

business strategies and extra costs (Whitbread, 2013).

Within the hotels & motels industry, which is both mature and very competitive, brand recognition is

important to attract consumers. A strong brand image helps to attract first-time customers and also to

repeat business, as switching costs are negligible in this industry. Differentiation between brands

becomes important, as one particular brand becomes synonymous with quality, price or a specific

target age group (Leask, 2013). Buyers are generally price sensitive, except in the premium market.

Innovation is also vitally important in attracting customers, as competing on price alone can be difficult.

In the premium segment, companies can attract customers by better security and more facilities, such

as spas, gyms and integrating hotels into golf complexes. Larger companies have implemented loyalty

schemes, by offering a points system or air miles to regular customers, which reduces buyer power. As

customers are numerous and mostly small in size, their buyer power is reduced, since the impact of

losing one customer is not a significant threat to business (Jayawardena, 2013). However, as many of

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the countries with a heavy reliance on the tourism industry have discovered, the reduction in the

number of holiday makers and overall travellers’ number means that buyer power has increased, as

consumers have more options available, often at a lower price point (Assaf, 2013).

2.5 Brand Management In The Hospitality Industry

The value of a brand is based on the awareness of the brand, its quality perception, and overall

customer satisfaction. Satisfied customers tend to buy more, be less price conscious, and to generate

positive word-of-mouth, thus contributing to bottom-line profit. Due to increased attention of customer

focus brand managers use satisfaction as a measure of operational success of their overall branding

strategies (Balmer, 2012). Consumers often base their hotel-stay decisions on their perception of a

specific hotel’s brand name. The United Kingdom now has over 30 leading hotel brands competing for

business, more than in any other product category. These noted brands include, Ramada, Holiday Inn,

Travelodge etc many of which are extensions of existing brand names. A brand-extension strategy

allows firms to penetrate a variety of market segments with differentiated products that carry a single,

well-established brand name. Hotel firms see several advantages to brand extensions, including

quicker acceptance of new products by consumers, economies of scale in marketing support

expenditures, lower risk associated with introduction of new products, and retention of guests (Bowie,

2012). The value of a brand chiefly resides in the minds of customers and is based primarily on

customers’ brand awareness, their perceptions of its quality, and their brand loyalty. After customers

become loyal to a brand, the brand owner can capitalize on the brand’s value through price premiums,

decreased price elasticity, increased market share, and more rapid brand expansion. Finally,

companies with successful brands benefit in the financial marketplace by improving shareholders’

value. The recognized goal of hotel branding is to provide added value to both guests and hotel

companies by building brand loyalty. It was reported that 85 percent of business travellers and 76

percent of leisure travellers preferred branded hotels over independent properties. One reason for this

finding is that hotel guests rely on brand names to reduce the risks associated with staying at an

otherwise unknown property (Martin, 2012).

2.6 Consumer Behaviour in Hospitality

In the age of social media and given the prevalence of ‘information search behaviour’, it is noteworthy

that already in this early model the preparation, satisfaction and evaluation are emphasised. In general,

consumer researchers suggest that the experiential aspects of consumption play important role in

consumer choice behaviour (Li, 2012). The Internet is intrinsically global in nature, as it is globally

accessible and crosses national boundaries to allow consumers around the world to participate equally.

Since the 1990s, there have been many online consumer research studies; however the scope of these

published studies is rather broad. With some overlapping areas the research can be categorised into

three streams, the early emphasis being on web-site attributes and quality of e-tailer, following with the

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research on attitudinal antecedents and more recently the experience and emotional factors within the

online purchasing context (Chen, 2013).

2.7 The Social Media

Most marketing managers use social media as an integral component of their branding strategies which

also results in brand recognition, hence leading to future growth of the brand through attracting more

customers. By definition social media can be defined as the combination of internet tools that enables a

user to generate exchange and modify contents continuously (Jung, 2013). In second quarter of 2013,

total Facebook users stood at 1.15 billion. In context of total number people using Facebook, it is said

that if all people want to form a country, that country will be third most populous country after China and

India. Whilst Facebook marked itself with an exponential rise in the number of consumers, Twitter in

2011 witnessed 182% increase in its mobile phone users. It can hence be inferred from the discussion

so far that social media is here to stay and it would be suitable for companies to integrate social media

in their overall market strategy. Social media plays a vital role in not only brand management but also in

other avenues of business activities (Burson-Marsteller, 2010).

0%

20%

40%

60%

80%

100%

Worldwide United States

Europe Asia Pacific

% Of Companies Using Social Media As A Marketing Tool

% Of Companies Using Social Media As A Marketing Tool

Exhibit 3: Percentage of Companies using social media (Burson-Marsteller, 2010)

Exhibit 3 above clearly outlines percentage of companies using social media a tool of strategic brand

management. It is evident from the research that western companies i.e. in Europe and the USA,

employs social media as an active source of marketing. Also it has been observed that about 90% of

the marketers use social media as an integral part of their strategic marketing and 65% of the

marketers have used it for the first time (Berkowitch, 2010). The major advantage of social media

website is that it provides an option for the consumers to comment and provide their invaluable

feedback about a specific product or services. This feedback can be related to the user experiences

and customer services as perceived by the consumers. This feedback would serve as basis for the

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product/service improvement in the coming future. Social media websites are user friendly and

immensely popular and hence this is no surprise that more and more hotels and travel businesses are

increasingly using social media to attract more and more customers.

According to Pappu (2005), the concept of social media is not limited to but mainly embraces following

key concepts:

Monitor brand reputation

Increase sales

Increase brand awareness of services

Educate and inform customers

Improve customer service

Providing visibility and awareness about the brand is the biggest advantages of the social media

channels which are quintessential parameters of converting potential customers into loyal customers.

There are number of examples around the market that clearly outlines the power of social media. For

example in early 2010, Sony claimed that it achieved £1 million sales only through its twitter account.

Another example of that of world’s third largest PC maker Dell which achieved $6.5 million worth sales

of PC’s, laptops and other computing accessories in the same year. The difference between traditional

media and social media comes from the fact that the former method of communication only apprises

customers while the later involves and stimulates the consumers. The level of customer support

increases with the engagement in the social media. Deloitte (2012) in its research report ’Hospitality

2015’ claims that the new technologies i.e. social media and mobile marketing will have a major role to

play over the coming next few years as the worlwide number of social media users and smartphone

users are expected to increase by 50%. Compeared to other industries, the hospitality sector was bit

slow in intergrating use of social media.

According to Mowat (2010) the adoption of social media channels can bring a vast avenues of growth

for marketers. The website gained popularity in early 2000’s and presently every business has a

dedicated website, on the other hand social networking media is a relatively new concept. The Nielson

Company researched and found out that almost 56% prefer to read reviews by previous customers

before they book their favorite holiday. On the other hand due to the ease of using technology most

consumers post their reviews predominanty through the social networking websites (The Neilson

Company, 2010).

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2.8 Role Of Twitter, Facebook & YouTube Blogs In Brand Management

Burson-Marsteller (2010) compiled a report and state that there are some international companies that

acknowledge the value of engaging in social media. Within the cluster of social media platforms, Twitter

is the preferred media tool among Fortune Global 100 companies, with two-thirds (65%) having a

presence on the social network. With at least one half are reaching audience through Facebook (54%)

and YouTube (50%). Most of the well known brands maintain their blogs profile and these organisations

realise hidden value in such a sustained engagement. It is indeed clear that if in present times an

organisation fails to engage its brand with the customers then it is clearly missing upon which can be a

huge opportunity in digital marketing. To gain more and stay abreast in today’s fiercely competitive

markets, hotels needs to make their brands visible, engage with customers and participate in online

discussion forums. These discussion can be through RSS feed, podcasts, hotel forums and videos on

the YouTube about the customer services and quality of the meals provided by the hotels.

2.8.1 Facebook

Facebook has gained immense popularity in the past few years and marketers believe that having an

active presence at Facebook can help to stay visible compared to peers. Facebook is one of the most

famous media which reaches more than 500 million consumers worldwide. Customers visit various

other social media websites and hence it is imperative for big brands to maintain a close eye about their

presence (Manchanda, 2010). Depending upon the marketing strategy a brand can either have a single

Facebook page or depending upon the geographical location can have different Facebook pages.

2.8.2 Twitter

Twitter amongst all social media platforms is the most effective medium of conversation. Twitter in the

hospitality industry would allow a constant communications with the customers for example resolving

customer complaints online or it can be leaving a feedback to consumers i.e. either thanking them or

telling them valuable they are for the business. Many big names including Hyatt Hotels, Ramada, J W

Marriott and many others opened their twitter accounts (Smith, 2012).

Most marketers believe that secrets of effective use of Twitter a brand must closely observe following

points:

Track the conversion rate measure ROI

Build Social Equity

Determine Your Goals

Conduct Some Research

Identifying a Twitter Profile

Clearly, a Twitter presence harness credibility of a company and makes it standout when compared

with the other competitors. But brand managers must be meticulous about the contents shared on the

social media platform which must reflect the true brand proposition (Penumaka, 2013).

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2.8.3 YouTube

The advent of technology has brought myriad of opportunities to maximise the sales potential. YouTube

is collection of videos which are viewed by over 400 million people each year. These people are

consumer seeking new information about a particular product or a service (Smith, 2012). A hotel brand

such as Premier Inn can use YouTube to upload videos of the rooms, meals, dining hall, nearby

location and overall aura of the hotel that would attract more and more customers. Most brands have a

unique way of social media strategy as they strive to associate their social media channel with a viral

effect. A viral effect is a result of innovative marketing campaigns that makes a product instantly

popular among the customers (Asmussen, 2012)

Premier Inn must strategise its presence on the social media channels like YouTube. It can offer

discounts, free drinks or a complimentary service during check in process if someone uploads their

video or provide their positive feedback about the Premier Inn’s services. This would be a small

investment but would yield big results for Premier Inn such as positive image about the brand.

2.8.4 Corporate Blogs

Blog is defined a short colloquial version of weblogs that a company or an individual users to

communicate with customers.

0%

10%

20%

30%

40%

50%

60%

% Of Companies Using Corporate Blogs As A Marketing Tool

% Of Companies Using Corporate Blogs As A Marketing Tool

Exhibit 4: Percentage of Companies Using Corporate Blogs (Burson-Marsteller, 2010)

Blogs give a personal touch that makes a huge impact upon the consumers. The use of corporate

blogging enables companies to strengthening relationships with their customers. As evident from the

exhibit above that small companies drive the success of corporate blogs. Corporate blogs are not only

cheaper but also effective too (Van Noort, 2012).

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2.9 Social Media & The Mobile Marketing

The increasing popularity and recent technological developments in the smart phone industry has also

complemented the landscape of strategic marketing. Mobile marketing allows business to outreach the

targeted business more precisely than ever before. Both Apple and Android platforms offers over

250,000 applications (also known as apps) to its consumers (Rohm, 2012). Most of these applications

(or atleast the prominent social networking websites) offers check in facility which can track one’s

location. This location track can be an effective tool that can be used by the marketers to reach various

others potential customers. The preset trend in the field of marketing is usage of this data in market

research, loyalty programmes and other activities to build and sustain a longer term relationship with

the consumers. For a global company such as Premier Inn the challenge lies in reaching and

communicating with consumers based in emerging economies. Compared to developed economies, in

the emerging economies the total usage of mobile phones and computers are far minimal. However,

most researchers claim that by 2020, mobile phone would be largely the primary mode of internet

especially in the emerging economies (Smutkupt, 2012). This is a realistic extrapolation that with the

evolving mobile revolution, the compactable devices are future of technology that provides answers to

various corporate problems. On daily basis numbers of people are churning out huge data regarding

their favourite brand, their preferences and their buying behaviour. This data can serve as a basis of

analysing the market and the upcoming trends in the market. While data through social networking

apps (Facebook, Twitter and Whtsapp) remains one of the emerging themes of the market research

another revolution can be in the form of gaming. Gaming is increasingly used as one of the marketing

channels by the big brands, where most companies enable its consumers to compete with each other

through online games (Persaud, 2012).

Undoubtedly, technology has imparted managers with the luxuries that were not even in existence in

the past. While most of the businesses have embraced or are in process of embracing idea of social

networking in their marketing strategy. Hotels – big or small, luxury or economic, global or local and

independent or chain are trying to gain a competitive edge through keeping themselves abreast with

the new age consumer (Wagstaff, 2010).

The customers are getting more resourceful and would do their research online for their travel needs

before making a decision. A lot of time is invested and when online initiatives are carried strategically,

they are able to see the fruits of their labour. Hotels that experience healthy returns on their investment

should continue to increase their intensity on the time spent in order to build the business for their

online market. While others who have not venture into the online era for their business, must be aware

that their customers may not necessary make a booking online, but would utilize online resources when

making a decision (Bharadwaj, 1993).

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Although there are many advantages of social media but there also various disadvantages associated

with the use of social media. The very first disadvantage of using social media content is that marketers

have to ensure that they share only that content which is relevant to consumers and must reflect the

overall strategic intent of the organisation. Most brands are at the peril of committing this mistake of

sharing irrelevant information that does not adds value either to the consumer or to the brand.

Secondly, social media appears to be low cost alternative that promises to reach maximum consumers

but it takes investment in terms of time and opportunity costs associated with it (Picazo-Vela, 2012).

Unlike traditional media which is one way, social media has an added advantage as it is a two-way

communication and conversations are exchanged as a result. Traditional marketing tools such as print

advertising, direct mail, and even email blast may be losing their effectiveness since consumers are

going online before making a purchase (Green, 2009). With the internet, consumers source for trusted

sites for hotels recommendations when making travelling arrangements. These tools allow the

consumers to start a conversation and potentially are at the advantage to be converted as the brand

ambassador. Even though the hospitality industry has not gone full trotter on social media adoption,

some international hotel chains already understand the effects and are taking advantage of the

benefits. The organization requirements and direction of the business has to be considered when

considering the implementation of social media. In brand communication, in order for the organization

strategies to be effective, social media needs to be integrated within the strategies before execution

takes place. The study will examine the suitability of social media as a method of marketing for the

Hospitality Industry (Brown, 2002).

This section looked deeply into the basic tenets of brand management, brand awareness (brand

recognition) and role of social media in brand management. It can be established so far that brand

management has a profound impact upon the market sustainability and future growth (Mills, 2012).This

report has so far discovered the critical success factors of branding for budgeted hotels, basis of social

media and the burgeoning trend of mobile marketing. Undoubtedly, brand equity meets the challenges

of sustainability and future growth, this will however be proved through comparing the customer

feedback and sustained increase in profits of Whitbread Plc over the past 10 years. The coming section

will discuss the research methods used to carry out this research.

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3. RESEARCH METHODOLOGY

The literature review resulted in a number of questions being formulated within the key themes of

product, price, promotion and role of social media. These questions can be summarised as follows: -

Product issues

What technical and functional attributes of a hotel are important to the customers of mid-market,

independent hotels?

Pricing issues

Are the customers of mid-market independent hotels accept value for money services

Promotional issues

Does the practise of relationship building encourage the customer to be more loyal to a hotel?

Does branding play any part in customer retention and loyalty?

Role of Social Media

Do customers actively seek better deals through subscribing to the social media websites of their

favourite hotels chains?

Can social media be extended to be a vehicle that encourages hotel chains to attract customers.

From these key themes and questions a hypothesis was developed, which proposed that, the

customers of independent mid-market hotels would remain loyal and would be able to be retained in an

increasingly competitive situation, subject to a number of critical marketing variables being achieved by

the hotel. These being specific customer focused product, pricing, location and booking, promotion and

service quality aspects. To test this hypothesis a study was undertaken to investigate the customers’

perceptions of the midmarket, independent hotel sector who will tend to stay loyal. The main research

method used was a customer survey which is efficient in eliciting data about a larger population.

Data can be collected in two forms, namely, primary and secondary data. The data collection methods

used in this research involves the search for both primary and secondary data. Information gathered by

observing phenomena or surveying respondents. Primary data are originated by the researcher for the

specific purpose of addressing the problem at hand. Also that obtaining primary data can be expensive

and time consuming Malhotra (2005). Since primary data is collected with specific purpose, it is the

most significant. Depth interviews, focus groups, observations and surveys are the major methods of

gathering primary data. In this particular study, surveys and indepth interviews have been used as a

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means for obtaining primary data. Information compiled inside or outside the organization for some

purpose other than the current investigation. According to Malhotra (2005), Secondary data are data

that are collected for some purpose other than the problem at hand. Usually journals, existing reports,

and statistics by public and private authorities are used collect Secondary data. Here, the secondary

data have been collected through case studies and using marketing journals and other existing reports

that were based on the topic. As a general rule stated by Malhotra (2005), “Examination of available

secondary data is a prerequisite to the collection of primary data. Start with secondary data. Proceed to

primary data only when the secondary data sources have been exhausted or yield managerial returns.”

The study hence, involved collection and analysis of primary data in foundation with the secondary

data.

Even before a research is started, the researcher needs to evaluate and select the type of method they

will to be used for collecting the data for the research. The Quantitative research methods and the

Qualitative research methods are two options of approaches available for the researcher. As noted by

Creswell (2003), “The situation today is less quantitative versus qualitative and more how research

practices lie somewhere in continuum between the two (eg Newman & Benz, 1998)”. In most

researches, in some way or the other both form of data collection are used. In this research, since, the

study was conducted to understand the perspective of consumers and their brand image, more stress

was laid on qualitative research rather than quantitative. According to Cassel and Symon (2005),

‘Qualitative methods’ is what people recognize and which is widely used, it is actually very problematic.

They could only talk about the characteristics of qualitative research, without an overarching definition,

because there were such a variety of methods that might claim this title and little consensus over a core

meaning. The simplest definition is to say it involves methods of data collection and analysis that are

non-quantitative (Lofland & Lofland 1984).

This traditional view is that quantitative enquiry examines data which are numbers, while qualitative

enquiry examines data which are narrative (Easterby-Smith et al., 1991). Inherent in this dichotomy is

the view that quantitative enquiry generally adopts a deductive process, while qualitative enquiry

generally adopts an inductive process (Hyde, 2000).

3.1 Qualitative Research

It is believed that qualitative research originated in recent times. However, as noted by Milliken (2001)

and Hamilton (1994), the real roots of qualitative research could be traced back to an eighteenth

century disruption that occurred in the fortunes of quantitative research. Here, in order to explore the

selected topic of the study, qualitative research is selected as the means for research. Positivism and

post-positivism are based on realism and involves comparisons of results and findings with preliminary

propositions. Interpretive research aims at understanding the actual production of meanings and

concepts used by social actors in real settings. Whereas, critical postmodernism is a combination of Page 23 of 69

critical theory and postmodern thought, which assumes that realities are value laden and contain

contradictions (Gephart, 2004).

“A qualitative study is defined as an inquiry process of understanding a social or human problem, based

on building a complex, holistic picture, formed with words, reporting detailed views of informants, and

conducted in a natural setting” (Cresswell, 1994). Another way of defining it is to say it focuses on

"quality", a term referring to the essence or ambience of something. Others would say it involves a

subjective methodology and yourself as the research instrument (Adler & Adler, 1987).

As cited by Golafshani N. 2003 say “enjoying the rewards of both numbers and words” i.e. the

knowledge obtained through detailed interviewing process with focus on compatibility or a qualitative

analysis is different a quantitative analysis. Researchers have argued that that unlike quantitative

research where the tool is the most important in qualitative research the researcher himself poses as a

tool and is the most important part of the research. So it is very important role of the researcher in

qualitative research.

As Malhotra (2005) noted, Qualitative research is unstructured, exploratory in nature, based on small

samples, and may utilize popular qualitative techniques such as focus groups (group interviews), word

association (asking respondents to indicate their first responses to stimulus words), and in-depth

interviews (one-on-one interviews that probe the respondents’ thoughts in detail) (Malhotra, 2005). The

qualitative research interviews differ in practical features such as length, style of questioning, and

participant numbers (group or individual). Though most of them are face-to-face, it can also be carried

out via internet or on the telephone. In this case however, the researcher has personal contacts with

Premier Inn’s business managers in different departments so most of the interviews were conducted

face to face. For the interview set of questions were designed through referring to the relevant subject.

3.2 Quantitative Research

Quantitative research methods are the orthodox way of researching. In very technical terms,

“Quantitative data is data expressing a certain quantity, amount or range. Usually, there are

measurement units associated with the data, e.g. meters, in the case of the height of a person. It

makes sense to set boundary limits to such data, and it is also meaningful to apply arithmetic

operations to the data”. Quantitative Research methods are important and the traditional form of data

collection and analysis (Norman, 2013). For this research the surveys and online questionnaires were

used as the quantitative method of research. The results of the surveys and online questionnaires were

inputted in the SPSS and the results were analysed through the graphical representation. The results of

the survey gave an insight about the consumer preferences, perceptions of consumers regarding the

Premier Inn Brand and the role of social media in the hospitality industry.

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3.3 Data Collection Method

It was quintessential for this research to match the objectives, findings and key recommendations with

the theory of brand management and social media. East (2007) argues for the accuracy of case studies

that use several sources. For that reason this study is based on different sources of data. The same

industry work experience and personal involvement of the researcher in the marketing position at the

chosen company offers also a source of information. Moreover, this data is complemented with the

survey and case study of an established brand, who are renowned and have experience on social

media marketing in consumer marketing. Eisenhart (2009) argues for that case study can

accommodate a rich variety of data sources, including interviews, archival data, survey data,

ethnographies, and observations. In this research questionnaire will be used as the main mechanism

for collecting the primary data (Naumes, 2006).

3.3.1 Primary Data

Collecting the primary data however, enabled to generate data that was not existent before and can

answer the research questions efficiently and effectively. Since collecting primary data is mainly for a

particular reason hence it is easier to be precise and accurate in achieving the results. Various forms of

primary data can be experiments, observations and communication. Mainly a primary research consists

of two main forms: quantitative and qualitative research. Quantitative research is an empirical research

that uses numbers as form of data through which it answers the research question. Qualitative research

on the other hand mainly requires non numeric data to prove a specific point of research. As stated

earlier the primary data would be collected through survey which is form of quantitative research.

Interviews however would also be a part of primary data which would qualify under qualitative research.

3.3.2 Secondary Data

Compared to the primary data, secondary data is mainly collected from the other sources i.e. other than

collected by the researcher directly. Although sometimes referred to as borrowed research, various

advantages of secondary research are that it not saves researcher’s time but it also aids the research.

In this research the data especially about the social media and branding practices of different brands

would be difficult to obtain directly. It was mainly due to this reason that secondary data is used in this

research that has helped to prove researcher’s perspective. The secondary data would be calculated

through the secondary data would be collected through the interviews and case studies which is a form

of qualitative research.

3.3.3 Population

For the research the population will be the general public who have used facilities of Premier Inn

(through staying, exhibiting or attending a formal event at the hotel) and active users that would be

available in the public domain of popular social media sites through the selected case study

organizations.

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3.3.4 Sampling Technique

Sampling involves following a rigorous procedure when selecting units of analysis from a larger

population. In research, population does not only refer to the people, but can also represent any group

or aggregate of individuals, groups, organisations or social interactions and events (Heaton, 2004).

Mainly two types of sampling techniques have been identified as mentioned below:

Probability Sampling: Noor (2008) has stated that the “basic principle of probability sampling is that a

sample will be representative of its population if all members of that population have an equal chance of

being selected in the sample”. However the fact is that the probability samples very rarely, if ever,

perfectly represents the populations from which they are drawn.

Two types of probability samples are simple random sample and stratified random sample. Simple

random sample is drawn when a sampling frame is available and each unit in the population has an

equal chance of being selected and stratified random sample is drawn when we along with the

representative sample, also wants to include the subgroups in the sample in the same proportion as

they occur in the population (Heaton, 2004).

Non – Probability Sampling: Non-probability sampling considers that every unit in the population does

not have equal and therefore probable chance of being selected as a part of the sample, which means

that the sample will not have the same parameters as that of the population (Heaton, 2004).

This research uses Non-Probability Convenience Sampling technique. In this type of sampling

technique, a sample is drawn from the units of analysis that are conveniently available to the

researcher. As a part of this research, survey was sent online to the family

members, friends and colleagues. This is done due to the limitation of time and budget on the part of

the researcher and also it was convenient for the researcher to approach this set of respondents

(please refer analysis part for sample size and the detailed procedure for collection of data).

Limitations of Research and Non-Probability Sampling Technique

Some of the limitations of this research and hence the non-probability sampling technique is as follows:

a) The sample is not a representation of the target population and therefore has no external validity. In

this research, sample from London has been considered only and hence, it does not represent the

whole of UK.

b) Size of sample is very small (only 100 respondents).

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3.4 Surveys

Most of the business researches are performed through surveys and online questionnaires. Surveys

are defined as “The method of collecting information by asking a set of pre-formulated questions in

predetermined sequence in a structured questionnaire to a sample of individuals drawn so as to be

representative of a defined population” (Hutton, 1990). It is a mandatory requirement that

questionnaires must be ethically in line with the British government regulations. This questionnaire is

fully complied with such regulations as laid by the government.

Questionnaires hold various advantages as compared to the traditional methods of research. Gathering

an indepth understanding of consumers’ perspective about the Premier Inn and usage of social media.

An online questionnaire is not only the quickest but also the reliable source of information. A face to

face interview in such a scenario would consume time and lot of resources. Online questionnaires on

the other hand are cost effective and simpler to analyse. The online survey website provided with an

option to tabulate the results of the survey through a website. With this research it was necessary to

consider opinions of different consumers, since each person holds different views; hence interviewing

few people or a group of individuals would not have yielded optimal results. Online surveys are type of

quantitative research which is based on the paradigm of being empiricist. Since, the target audience of

such a kind of research would be huge it is hence beneficial to reduce the biasness about the topic

through surveying people from different ethnicity, background and professions. Not only for the

researcher but also for the respondent, questionnaire can be answered at the own ease of the

respondent various other advantages can be enumerated as follows:

The information is practical and can be trusted to base one’s decision.

Online surveys and questionnaires can be easily understood by the respondent.

Large amount of information can be collected from different consumers that too in a short

period of time.

Requires basic knowledge of using internet and SPSS and no specialist skills are required to

undertake the study (including analysis).

The data, thus obtained can be quantified and compared with other sources of data. This data

is valid, and can be used to test hypothesis and creating new theories.

3.4.1 Questionnaire Design

Appropriate title is the key to any questionnaire as it gives respondents an idea about what a

researcher is trying to find out and hence they are more likely to respond appropriately and helpfully or,

indeed, at all (Saunders, 2007). The title mentioned on the top of the questionnaire (refer appendix 2)

as designed for this research is self-explanatory. A brief description about the questionnaire and

purpose of this research is also mentioned in the questionnaire which will encourage the respondents

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to respond appropriately. Moreover to encourage some respondents, I have agreed to share the results

of my findings with the respondents who are interested in this research.

A variety of questions/answer types has been used through-out the questionnaire (refer appendix 2).

This is done specifically to keep the interest of the respondents in the questionnaire as it can be very

boring for the respondents to respond to a series of same set of questions (Saunders, 2007).

Questionnaire is divided into three parts (refer appendix 2) with the following question types being

used:

Dichotomous Questions: These types of questions are an extreme type of multiple type questions

allowing only two choices like male-female, agree-disagree, etc. advantage of these types of questions

is that it is simpler for researcher and respondents both. The disadvantage of these types of questions

is that giving only two choices might be very restricting for the respondents (Robson, 2002).

These types of questions are used mainly in the first part of the questionnaire to gather the basic details

of the respondents like their age, gender, profession etc. so that they can be segmented on the basis of

these parameters and conclusions can be drawn keeping an individual segment into consideration.

Multiple Choice Questions: These are the questions for which we have multiple choices as answers.

The advantage of this type questions is that it is easier for both researcher and respondents and the

tabulation and analysis in multiple choice questions is simpler. However, the disadvantages of this type

of questionnaire is that a considerable effort is required to form a sound set of multiple choice questions

and too many questions and choices can make the questionnaire monotonous (Robson, 2002).

Parameters Related Question No.

General Questions 1, 2, 3

Product Characteristics 4, 5, 6, 8

Pricing (Value For Money) 12, 13, 15

Loyalty & General Consumer Opinion 7, 9, 10, 11, 14

Social Media Subscription 16, 17

An Effective Use Of Social Media 18

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3.5 The Research Strategy

As discussed in above section, there can be various forms of research approaches and for each

approach there are different research strategies. This research is mainly supported by the exploratory

approach to research and for that the research strategy is discussed in coming sections. The primary

research is mainly answered by the quantitative method i.e. analysing responses of consumers through

their participation in surveys. For the secondary research, which supports the understanding and

explains the research objectives, mainly journals and research publications were used. Various sources

of secondary research can be enumerated as follows:

3.5.1 University of West London Library

Databases like Business Source Premier, Emerald, KeyNote, JSTOR, Mintel, Science Direct and SAGE

Publications were mainly used for the research purposes.

Surveys and online questionnaires are scientific mode of observation that is most suitable to the

research. The purchasing differs at each stage of the buying process and is one of the factors that keep

evolving along with technology and demographics. The research will revolve around the theory of social

media and will strive to prove that social media play a very important role in influencing consumer’s

decision in making a purchase of an item. According to Saunders (2007) number of different research

methods can be used for the purpose of research for example, experiments, surveys, case studies,

archival research etc to name a few. For this purpose however, questionnaires are found to be useful to

answer the research questions. The survey strategy directly complements the deductive approach to

research. Surveys not only help to accurately map the consumer behaviours but are also cheaper and

simpler to use. Surveys not only enable to collect a huge amount of data in an economical way but are

also very precise and depict the true results. The main aim of the survey was to find out the interactions

of the consumers with their favourite brand on social networking websites. There has been numerous

examples where a brand forecasts its success or failure from the popularity on the Facebook. For

instance most Hollywood producers now days make a dedicated Facebook page about their upcoming

movie. Most researchers expect that maximum likes on Facebook (or maximum views in the YouTube)

automatically translates to the success of the new movie. Through this research a link between the

consumer and social media will be explored. This link would be necessary not only for the success of

the brand but also would highlight social media as an emerging channel of advertising. Business

researchers explain that data collected from the surveys are by far very reliable, standardised and can

be easily adjusted for comparative purposes. Using a standardised data was necessary for research

purposes. To best answer the research questions the survey was divided into three main sections. The

first section deals mainly with the generic information about the respondent i.e. name, occupation and

age range. The second part of the questionnaire deals mainly with the respondent’s interaction with

social media networks. This question lays the basic knowledge of the respondent regarding the social

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media and how often they use social media. The third and final section which is also the backbone of

the whole research relates consumer’s with the brand. This part of the questionnaire mainly answers

consumer’s buying behaviour, brand interactions and decision to make purchase (or influence) via

social networks (Ghauri, 2005).

The survey would be shared via social networking websites mainly (Facebook and LinkedIn). It would

also be however useful to search for special groups consisting of 20 – 49 age group on the social

networks and post the survey on the wall. On LinkedIn there are several links of business professionals

and executives etc who are active and will have no objection in filling a small survey. In all of the

aforementioned scenarios the target age group is 20 – 49 and in order to broaden the research,

undertaking manual survey would also be beneficial. Manual survey can be performed on the busy high

streets areas such as Ealing, Chiswick and Hammersmith in West London. This survey would be an

invaluable source of information as the data comes directly from time spent “on the field”. Marketing

managers would find it extremely helpful to administer the responses of the consumers and how well

they use social media. We however will mainly be focussing on internet mediated questionnaires and

structured interview type of questionnaires. Responses collected through the social media networking

websites can be categorised under internet administered while writing down responses can be

categorised under structured interview (Mingers 2003).

This study delves deeper into the evaluation of consumer perception about the Premier Inn’s brand but

the highlight would be integrating social media strategy with Premier Inn’s overall strategic intent.

Exploring ways of using social networking websites as a marketing channel is not a new topic but

certainly an unexplored territory which can be promising for big brands. There are however few brands

that are using social media for example Starbuck is giving an option to consumers to buy special gifts

through Facebook as a present for their friends and family. In order to answer the research question, I

have used both exploratory and descriptive studies. Saunders, et al, cited Robson (2002) to define an

exploratory study as a valuable mean of finding out ‘what is happening; to seek new insights; to ask

questions and to assess phenomena in new light. On the other hand, Robson (2002) asserted to define

a descriptive study as a mean to ‘portray an accurate profile of persons, events or situations’. For the

purpose of the research I needed to combine these two kinds of study since I have used both deductive

and inductive approaches to answer the research question. Moreover, I have used descriptive study in

order to test the theory. This has been done by collecting and analysing quantitative data through a

survey. During the research I have also used an exploratory study through interviews and the collection

of qualitative data in order to understand what was happening in the Social Media Marketing area

(Robson, 2002).

The constraints of time and budget restricted data collection. Moreover it was impossible to collect data

from an entire population since Social Media population is way too wide. I have thus decided to use

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sample of population. I have used a non-probability sample for the purpose of the research. For the

sampling technique, I have used a purposive sample, that is to say, a non-representative subset of a

larger population. I have thus administrated the survey to my own network of contacts through Social

Media. The research being based on Social Media, it appeared thus as the most adapted to use these

media to diffuse the survey. Furthermore, by doing so, I was sure that the respondents were familiar

with Social Media platforms and tools.

To answer most of the research questions primary data is one of the preferred methods of data

collection (Cooper, 2003). Primary data collection enables to address various issues to consumers

about the social media and especially how an emerging field of marketing impacts the decision of

consumers while making a purchase. Clearly, data collection method forms essential part of the

research as this forms basis of the dissertation. The survey would take responses for 10 days only

which were enough to collect data from varied consumers i.e. of all ranges and from different

nationalities. Free survey websites were used as a platform to prepare and distribute questionnaires.

This enabled an effective and efficient use of technologies that has maximum impact and that too for a

free of cost services. While designing a questionnaire, it was made very clear to keep the questions

concise, simple to answer and all questions were free from jargons. The major limitation about the

website used for the survey was that it was limited to three sections maximum, while in a section there

can’t be no more than 10 questions.

Using social media as a data collection method not only proved to be quick but also the most accurate

too. By posting on the link on the Facebook, didn’t only allow quick responses but also feedback from

the respondents about the potential limitations. The upcoming generation i.e. students were main target

of the research discussion. This is because any trend in the future will be determined by the

preferences of these respondents. There are numerous undergraduate and postgraduate pages and

forums on the internet which enabled me to collect data quickly. Some if the examples of students

forums include, www.expedia.co.uk/forums, www.tripadvisor.co.uk/discussions, etc were really helpful

to find online student communities. It was also very helpful that most of the students understood the

importance of dissertations and research in a post graduate course. Main emphasis has been given on

respondents average time spent on the social media platform and how a consumer interacts with the

various brands on the social media. While age was one of the important preponderant variables of the

questionnaire, focus was also given to the occupation and present status of the respondent.

3.6 Data Analysis

Various researchers used different data analysis tools, e.g. personal or computer based. For the

questionnaires however a data analysis software SPSS is used for analysis of the results. The SPSS is

one of the most effective efficient software for analysing data. Compared to other softwares such as

Microsoft Excel, SPSS enables to get results in just a click. While the other sections such as case Page 31 of 69

studies were analysed, keeping in mind the overall fashion industry and considering two different

organisations that use social media as a tool of marketing. Nevertheless, academic journals and

research papers are also used as an inseparable part of the research but all the perspectives are

analysed from a critical perspective.

3.7 Ethical Issues

Krippendorf (1980) asserted that any advertisements must adhere to the current rules and regulation.

While performing research over specific topics related to social media, ethical issues must be given due

consideration. For an instance it would be against ethics to ask consumers number of friends in their

network or their relationship status on the social networking website. There is a degree of sensitivity

associated with each questions asked to the respondents.

Another ethical consideration that was followed is related to storage of data collected from the

questionnaires. Needless to say that name and identity of the respondents were kept anonymous and

the system is protected with passwords. There were hence minimal chances of data theft from the

computer system and from the free survey website.

3.8 Data Quality, Validity and Reliability

It is quintessential to test the data through pilot study, which would prove the validity of the research.

The online questionnaire was duly consulted with the academic experts and supervisor before rolling it

out for the consumers. Analyses and conclusions are made based on the actual numerical fact

collected from the survey. An excel copy of the survey is attached along with the research report.

3.9 Limitations of the Research

There are several limitations about the research that has been undertaken. First of all limitation of time

and resources were the main hindrance. The research span was short lived and being started out in

August, the piece of work has to be submitted by October. Budget was another constraint for this

research. In ideal conditions this research can be extended to evaluate use of social media in the

market research and other areas of marketing. While the total number respondents can also be

extended more than 100, if there was provision of extra time. More respondents would have more

closely demonstrated the market conditions. The constraint of budget however affected the possibility

of travelling to different parts of the U.K. and gathered responses from the middle aged group regarding

their perceptions about the social media.

Since, U.K. is a multicultural nation which welcomed millions of students each year who study and

move back to their respective home countries. Since the survey includes students predominantly,

hence there are chances that results might have been influenced by the respondents who are on a

short stay in the U.K. Considering case studies in most of the times limits one’s ability to gain an

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indepth understanding about the strategies used by the respective companies that could pave the way

for emerging companies in the same industry. Although cases studies gives a holistic perspective about

the industry and provides the tangible evidence that can be used by the researcher to support their

piece of research.

Geographical limitation is another aspect that can impact on the findings of the research. The research

is mainly centred on universities, colleges and centres around the London areas. For the purpose of

generalisation it has been assumed that the results observed in London can be further generalised to

the entire nation. This can probably be a fair assumption but London is predominantly younger areas

compared to other areas such as Wales and North Scotland. The fact that each geographical location

has its own demographics which might affect the preciseness and accuracy of results. Finally, the

concept of social media is fairly a new concept and there can be inherent error to replies by the

respondents.

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4. KEY FINDINGS & ANALYSIS

4.1 Survey

In the first part of this chapter, data collected from the survey will be analysed and key findings will be

inferred from the obtained data. The survey was primarily focussed on the British consumers living in

and around the area of London. Each questions asked in the survey was based on set of theories

backed by the principles of consumer behaviour. The survey was carried out on approximately 150

respondents out of which 97 respondents answered. Hence, the total percentage of respondents who

replied stood at approximately 65%. The total questions were divided into three main sections, general

information, questions about social media and association with the brand. (Please refer Appendix 3 for

the questionnaire).

Exhibit 5: The Gender Ratio of the respondents (Source: SPSS)

The gender ratio of the respondents was fairly distributed and was almost 50% each. Total number of

males who replied was 49 while 48 was the total number of females who responded to the

questionnaire.

Male 49

Female 48

Since social media networking websites and the internet is more popular with the younger generation it

was due to this reason that most of the respondents were between 20 -35 years of age.

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Exhibit 6: Age Group of the Respondents

It must however be mentioned here, that this research aims to analyse the impact of brand recognition

and market growth.

20 - 35 58

36 - 45 29

46 - 55 7

55 and above 3

It is observed that most of the respondents belongs to the 20 – 35 age group, hence one of the

limitations of the study would be that there were very few respondents who were above 45 years of

age. Premier Inn strives to be one of the brands that caters to most of the Small and Medium

Enterprises (SME’s). It is hence that there is considerable number of consumers who are above 45

years and utilize Premier Inn’s facility. On the positive however, most respondents belonged to younger

population who will grow up to successful professionals and business managers and if Premier Inn can

inspire this target, then the hotel chain has a sustainable future.

It was also observed that among all the respondents 31 were students, 23 were job professionals, 12

were business owners, 17 were non professionals while 14 were either volunteers or other groups. It

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was important to consider the occupations of respondents because Premier Inn strives to be one of the

first choices of consumers of different backgrounds and occupations.

Exhibit 7: Percentage of Respondents who have used Premier Inn’s Services in the past

Of all the respondents who replied about 94% of the respondents (i.e. 91 out of 97) said that they have

used Premier Inn’s services before.

Used Premier Inn's Facilities

Yes 91

No 6

This is one of the positive aspects of the research that most of the people have used service of Premier

Inn and hence the feedback that they will give can be trusted for the purpose of the research. The

population of the survey was randomly selected and this is one of the facts that about 94% of the

population respondents have used the facilities of Premier Inn. This is mainly because the hotel is mid

budgeted and offers value to the money. According to Marketline (2013) in 2012, Premier Inn

welcomed about 44 million customers which was an increase of 27% over the previous year.

Of all the respondents, 93 respondents were either interested to use Premier Inn’s services again or

were willing to use in near future.

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Exhibit 8: Percentage Of Respondents who would like to rebook or use Premier Inn’s services

An integral part of the Premier Inn brand is to offer guests a combination of quality and value for money

in convenient locations. It’s a combination that amounts to ‘the right product, in the right place, at the

right price.’ A Business Account scheme is therefore a natural extension of the brand’s core

proposition, because it rewards Business Account customers who have a mobile workforce with a wide

range of cost control, convenience and efficiency benefits. In essence, the Business Account card

scheme enables organisations of all types and sizes to pay for business related expenses at Premier

Inn hotels and restaurants. The card is free to use, with no set-up fees or administration charges, and

organisations can opt to manage their Business Account centrally, or make their employees individual

cardholders. Although this scheme was started out in 2007 but this is just one example of brand

recognition that lead to Premier Inn’s future growth.

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Exhibit 9: Premier is always the first option

About 84% of the total respondent said that Premier Inn is always their first choice when it comes to

booking a hotel.

Premier Inn Is Always My First Choice

Yes 81

No 16

There were some respondents who would consider alternative options than Premier Inn while making a

hotel booking. Despite the fact that Premier Inn has a strong loyalty scheme, there are some customers

who look out other cheaper options such as local bed and breakfast and other hotels which are cheaply

priced. It must also be noticed that Premier Inn’s closest competitors Holiday Inn and Travelodge

provides a stiff competition in this category. However, despite tough competition and highly

recessionary economy Premier Inn has added nine hotels comprising 1,576 rooms to the city during the

past 12 months and now has 7,700 rooms. London represents 33% of Premier Inn’s committed

pipeline. Outside of the U.K., the company’s international arm, Premier Inn International, signed 11

letters of intent for 18 hotels, with a focus in India, the Middle East and the Asia/Pacific. High visibility

certainly is a value addition to the brand, more frequent the customer see the brand, more trust they

gain over the brand.

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It is very important for a brand to decide about how does it wanted to be perceived in the market.

Premier Inn claims to be a brand which is for everyone. Everyone wants to spend less money and in

return expects luxurious treatment and aura. Premier Inn promises to fulfil these promises.

Exhibit 10: Perceptions About Premier Inn’s Brand

As shown in above graph most respondents believe that Premier Inn is a budgeted hotel chain or a

chain of hotels that offers value for money. The research question was used to analyse the perception

of Premier Inn as a value for money brand or an inexpensive brand, and there is a difference between

the two.

Perceptions About Premier Inn Is

Budgeted Hotel Chain 37

Value For Money 40

Excellent Customer Services 19

Expensive 1

A value for money brand is that charges lesser and provides exceptional services, an inexpensive

brand however, is just a brand, which is cheaper. Premier Inn strives to be value for money brand and

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hence needs to work out on its branding strategy (Recommendation 1 deals with building a brand

strategy).

Exhibit 11: Relationship between Price & Services Provided2

More than 85% respondent held either positive or very positive reviews about Premier Inn when asked

about relationship between price and services offered.

Relationship Between Price & Service

Very Positive 15

Positive 68

Negative 7

Very Negative 2

Did not Answer 5

There were however, number of respondents who responded to question, these are the respondents

who were unsure or have not used Premier Inn’s services in the past. Overall, it can be assumed that

Premier Inn has been successful in its endeavours of managing the paradox of cost and quality. 21 The No. 5 represents that the respondent didn’t answered

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Exhibit 12: Premier Inn's First Comes To My Mind When I Think About Budgeted Hotels

This specific question intended to analyse consumer perceptions regardless of the fact that whether

they have used Premier Inn’s services. Most of the respondents replied that Premier Inn comes first to

their mind when they think of budgeted hotels.

Premier Inn's First Comes To My Mind When I

think About Budgeted Hotels

Yes 73

No 24

Legendary brands have firm values involved with them, just like McDonald’s comes into mind when we

think of a burger and Apple Inc. strikes our mind when we think of innovation and creativity. In a similar

way it was tried to analyse whether Premier Inn strikes with budgeted hotel. The response however was

not very excellent, and about 25% of respondents didn’t linked Premier Inn with budgeted hotel chain.

This means that there is lack of consistent communication with the customers. This is in contradiction

with the principles of sustainable branding (As discussed in Chapter 2, Page 11). It is hence that

Premier Inn still needs to develop its branding strategy to identify the most appropriate target market.

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Exhibit 13: Premier Inn Was Affordable For Me

Most of the respondents agreed to the fact that Premier Inn was affordable to them. Price is on the

most essential components of marketing mix. Dynamic online booking systems allow customers to

book on price point rather than on personality; and the power and attraction of brands has never been

greater. A brand offers consistency; and availability, and a competitive price seals the deal.

Premier Inn Was Affordable

Yes 79

No 10

Did not Answer 8

There were few respondents who did not preferred to answer the question, most of them were people

who have not used Premier Inn’s services or were unsure about the question.

The competition in the budgeted hotels market is very stiff and there are big names in the market who

work on the similar business model. The budget hotel sector includes chains such as Travelodge,

Accor and Express By Holiday Inn. Premier Inn has shifted the marketing focus on a point of difference

and helps create an emotional connection with customer.

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Exhibit 14: Mostly Preferred Budgeted Hotels

Undoubtedly, Premier Inn gets a tough competition from its archrival Travelodge. 24 respondents each

amongst the value hotel chain preferred Premier Inn and Travelodge while other preferred other

cheaper hotels and Bed & Breakfast.

Most Preferred Budgeted Hotel

Premier Inn 24

Travelodge 24

Holiday Inn 14

Local B&B 16

Others 19

The intense competition in the hotels industry is also in Chapter 2: Literature Review (Page 12).

Compared to total number of chain, Premier Inn has 620 hotels compared with closest rival Travelodge,

which just opened its 500th in London. As a part of this survey it was also asked that whether most

people in someone’s network held positive opinion about Premier Inn.

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Exhibit 15: Most People In My Network Hold Positive Reviews

One of the questions asked to respondents’ dealt mainly to analyse whether most people held positive

opinions about the Premier Inn brand. It was found that most the people in the respondent’s network

holds positive opinion about the brand, meaning thereby they have not heard of any negative

comments about the brand. Therefore, strong brand recognition allows the company to maintain its

leadership position in the market as well as sustain it in tough economic times. This leadership position

enables it to increase its market sustainability and future growth. It also enhances its customer base

and, in return, benefits its top line growth. This signifies that Premier Inn’s branding strategy is in-line

with the principles of budgeted hotel chain as discussed in Literature Review Page 15.

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Exhibit 16: Reasons For Choosing Premier Inn

When asked about the main reason of choosing Premier Inn, largely respondents replied that it was

primarily location, price and good value for money that enticed them to choose Premier Inn. These

advantages has strengthened economic condition of Premier Inn as it enabled them to build a strong

financial position indicated by growing revenues despite the economic downturn and its consequences.

Whitbread has witnessed a continuous growth in its revenues over many years. The company’s

revenues increased at a compound annual growth rate (CAGR) of 10% from £1,334.6 million ($2,134

million) in FY2009 to £1,778 million ($2,843 million) in FY2012. As compared to FY2011, the revenues

increased 11.2% in FY2012.The growth in revenue was attributed to a combination of new openings

and improved sales in like for like units during FY2012.

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Exhibit 17: Subscribed To Premier Inn’s Social media page

An indepth discussion of social media and its importance in the strategic context is discussed in the

Chapter 2 of Literature Review, Section 205 (Page 19). The earlier discussion established that, social

media may be interpreted in different ways depending on who is looking at it and what approach one

takes. In general, it relies on Internet and Web-based tools and services to enable anyone the ability to

publish information—be it data, audio, or video—on the Web. The hospitality industry has yet to identify

the effectiveness of marketing through the use of social media. One of the areas of development for

Premier Inn remains developing the social media strategy of Premier Inn.

Social media is becoming a powerful and most brands motivate customers to make a purchase through

social media accounts. For example Starbucks has recently started to give an option on Facebook, to

present coffee vouchers as a birthday present.

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Exhibit 18: Inspired to make booking using Social media

As shown in Exhibit 18 above most customers have not yet made booking through social media

campaign, hence outlining that there lies a huge potential for Premier Inn to take advantage of social

media channels in order to penetrate the existing markets and hence increase brand awareness. Unlike

traditional media which is one way, social media has an added advantage as it is a two-way

communication and conversations are exchanged as a result. Traditional marketing tools such as print

advertising, direct mail, and even email blast may be losing their effectiveness since consumers are

going online before making a purchase. With the social media, consumers source for trusted sites for

hotels recommendations when making travelling arrangements. These tools allow the consumers to

start a conversation and potentially are at the advantage to be converted as the brand ambassador.

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5. CONCLUSION

This study attempts to determine whether brand equity has relevant significance with the sustainability

and future growth. It also researches whether brand equity influences competitive advantage which

from a critical perspective is a key component for Premier Inn to gain substantial market share. In this

study, brand equity has a stronger significance positive effect on competitive advantage and

performance of Premier Inn. In addition, antecedents of brand recognition have profound relationship to

the future growth. The analysis of this methodology will contribute significantly toward understanding

how Premier Inn in United Kingdom can utilise channels of social media to enhance market recognition

and gain a sustainable competitive advantage.

Research Question 1: Does Premier Inn’s brand recognition meet the challenges of market

sustainability and growth?

It has been observed in the survey section that an investment on the brand equity has yielded positive

results for Premier Inn. Most consumers feel more loyal towards the brand, and an evidence of this is

not only positive opinions about the Premier Inn but also increasing profit margins (in 2012, Premier Inn

witnessed 27% increase in revenues compared to 2011). The survey found that consumers were

recognised Premier Inn as an ‘affordable’ brand which has resulted in positive growth.

Exhibit 19: Whitbread Plc. Stock Performance (Yahoo, 2013)

As shown in Exhibit 19 above it is evident that shareholders have shown interest in the success of

Premier Inn’s branding strategies. Over the past five years, the brand has capitalised upon its brand

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and sustained its market share whilst exploiting new opportunities. Over the past ten years the hotel

chain has consistently outperformed the markets through beating its closest competitor Travelodge and

expanding in new geographies i.e. Middle East and Asia (HotelNewsNow, 2012). It can hence be

deduced from these observations that brand recognitions meet the challenges of market sustainability

and future growth.

Interviewing marketing and revenue managers outlined that Premier Inn believes that brand positioning

was mentioned as an effective branding strategy. Premier Inn uses price and quality attributes to

position their products in the market. Small and large companies use different pricing strategies in order

to achieve competitive advantage. With a rise in the number of businesses today, the level of

competition is also rapidly increasing. The company leaders and managers mentioned that to compete

favourably in the market, prices can be lowered or increased in a bid to attract more customers but also

based on the competitors‟ price. Sometimes there is an increase in repeat customers even with the

high prices because of the strong brand as well as company’s reputation of providing high quality

products and services.

A successful brand gains momentum from innovative products or process. Innovations in services

industry can be in form of customer services improvements or development of new services while

process innovation involves integration of operation steps or reduction in cycle times that improve

operation’s efficiency and effectiveness. Therefore, Premier needs to have a strategic know-how

system in place to put the innovations into use and the creation of an innovative product or service can

provide marketers with a sustainable competitive advantage. It is because of this reason a branding

strategy has been recommended for Premier Inn in the later sections this report.

Research Question 2: Does Premier Inn’s social media strategy suffice to meet the challenges of

market sustainability and growth

It was observed in surveys and interviews that most consumers held positive reviews about the Premier

Inn but have not subscribed to their social media pages. On the other hand, interviews observed that

Premier Inn realise the importance of the social media and believe that this is going to be future trend

and Premier Inn must utilise its strength to the full extent. Clearly, there is mismatch between the

Premier Inn’s brand intentions to its current scenerio. It is however recommended that social media

needs to be fully integrated in the Premier Inn’s marketing process. Marketer’s need a solid internet

strategy; merging social media marketing into their marketing plan and the hotels brand; integrating

videos, images and blogs to increase exposure and improve online positioning. Social media gives

marketers an incredibly inexpensive way to build brand awareness, while doing it in a way that makes

the hotel seem simultaneously hip, down to earth and fun.

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Savvy marketers are increasingly using social media to let guests sell their hotels, which is authentic

marketing at its best. Guests who have had extremely positive experiences do often feel motivated to

post their positive feedback on the internet. Successful word of mouth marketing isn’t about what the

hotel thinks it represents; it’s what the consumers choose to talk about; ‘Word of mouth hinges on real

consumers spreading the word for you.’ It’s the best marketing tool; with high credibility as it comes

from previous customers and there is no cost to the hotel. However, if consumers have a bad

experience it can be unfavourable for the hotels reputation; ‘a single negative online guest review can

cause significant damage by scaring off future potential guests.’ The scope of internet marketing is

huge; numbers could be in the realms of tens of thousands of potential guests scared off from one bad

review on the internet. Hotels reputations are at stake; consumers are going to be talking about how

they were treated for better or for worse. The second recommendation discusses the most appropriate

social media strategy that Premier Inn can utilise.

5.1 Recommendations

5.1.1 Build a Branding Strategy

This research outlined that brand recognition does meets the challenges of market sustainability and

future growth. However brands need to be careful about sending messages to the consumers (i.e.

consistency is essential). Premier Inn has established itself as an affordable chain of hotels and must

continue to communicate the same message in future. Based on the analysis (i.e. surveys and

interviews), it was observed that Premier Inn needs to strategise its branding philosophies and match it

with the customer expectations. Based on findings from the survey and interviews, following three

phases are identified as crucial for branding Premier Inn. These are brand essence, brand reflection

and brand strategy, they will be further explained below.

Brand Essence

This phase is more of an evaluation of the brand. The essence of a company’s brand can be compared

to an identity. Based on this analysis the most important factor for branding at Premier Inn is to know

the brand identity i.e. who Premier Inn actually and where does the brand wants to be in coming ten

years. Lack of clear commitments would end up the brand leading towards a wrong identity to its

customers. Not only the top management but each employee at the Premier Inn has a major role to

play in meeting the brand challenges.

Brand Reflection

The brand reflection part is the phase where Premier Inn needs to realise its corporate identity and how

the same is being portrayed in the market. This phase will work as a foundation for the brand strategy.

The brand reflection phase is about recognising the possibilities and liabilities that can be used to form

the brand strategy. There can be three essential aspects of brand reflection that should be

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implemented in the brand strategy within Premier Inn. These are consistency, flexibility and brand

pooling.

Flexibility

One of the three most important factors we stress when building a strong brand is the ability to be

flexible. It can be argued that Premier Inn needs to be able to follow and take advantage of actual

events and happenings to strengthen its brand.

Consistency

No matter what type of branding activities the company conduct it is crucial to be consistent in order to

hinder confusion in what the brand stands for.

Brand Pooling

This factor is a recommendation for something we believe is a great way to gain advantages to your

brand through using already existing brands and their strong brand equity. Examples of such activities

are co-branding, using celebrities or sports person.

Exhibit 20: The Proposed Brand Strategy for Premier Inn

Past researchers have analysed that there are some very important factors to consider, as well as

some risky pitfalls to avoid. However, no matter what direction one choose to brand its company we

stress the importance of consistency. If a company projects its brand inconsistently the customers and

consumers will not be able to trust the brand and the associations to the brand will vary a lot. This can

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create a large confusion around what the brand really stands for. Premier Inn on the television

commercials portray itself as an affordable brand hence it needs to consistent with this strategy. The

strategy must be reflected in all the marketing endeavours and also prices (an important component of

marketing).

Brand Strategy

When a company has gone through the evaluative phase of brand essence and built the foundation for

the brand strategy in the brand reflection phase it is time to make a plan of action. The brand strategy is

where the aspects of brand reflection is interpreted and used to guide the strategy.

5.2 The Social Media Strategy

This research has observed that it is important to integrate the use of social media into the company’s

marketing communication mix. It can be seen that Premier Inn has been aware of this and are working

with the same communication strategy across the U.K. Premier Inn has developed its marketing

communication mix in a way where direct marketing and other ways to directly advertise to customers is

more in focus then before as a result of the evolvement of social media. Social media is integrated in to

the established brand identity, but is not limited by historical facts. The company is willing to take risks

and come up with new ideas. It will, hence, be suggested to adopt a robust social media strategy

especially allowing customers to book through the social media pages.

A quick glance Premier Inn’s Facebook page reveals that there is a need to actively work with

integrating the different social platforms with the company’s strategic objectives. There is also an

awareness of the importance of conveying a consistent message across the different social media

channels. The messages can be the same but they are expressed in different ways due to the technical

differences as well as to the different people using the sites.

The company is also aware of the importance of integrating inside the company. All instances must be

able to find ways to cooperate. By doing this they can be more successful in both communicating with

the employees at the company and with their customers. Social media is not just a matter of creating an

account and share contents, it however is meticulous approach that brand managers need to take

seriously. It is recommended that in order to get best out of social media, Premier Inn needs to device a

three step approach: identify the target customers, employ consistent strategies and evaluate the

performance regularly.

Targeting the right people

Brand managers must segment the market by defining customers that share similar ideals. With

segmentation they can stand out and different themselves from other companies. In our analysis it can

be seen that Premier Inn is focusing too much on the global perspective instead of finding local Page 52 of 69

consumers who can ignite the fuse among others and start word-of-mouth trends. We can also see that

Premier Inn at the moment is not actively engaging or actively targeting their customers to optimize

their social media efforts.

Strategies and tactics

Premier Inn approach to social media is not different from their conventional marketing communication.

Same kind of communication strategy across the U.K. but the message is tailored to fit different social

media platforms. It must be useful for the company, to adopt tailored advertising for different hotels. For

example, hotels in areas in and around bigger cities such as London, Birmingham and Manchester

must be offered cheap (i.e. compete on volume) while in other areas such as Wales, Cornwall and

other tourist attraction, prices must be premium (compete on value).

According to the interview excerpts, Premier Inn is using different monitoring instruments for listening to

the consumer responses. The responsibilities must be shared by each member of the staff in different

locations. It is imperative for a brand to monitor the businesses industry, niche, and competitors’

(concerning the price and product features) rather than assessing social media strategy of other

organisations.

Controlling the flow of feedbacks and incoming messages is important. It was observed during interview

that Premier Inn found it much harder to control the messages in social media. The brand was

providing the consumers with different platforms and same account for sharing contents and receiving

feedback and complaints. It is hence quintessential for Premier Inn to monitor Facebook, YouTube,

Twitter and other sites by using either technological tools that are available in the platforms as well as

analysing the comments.

Dealing With Negative Feedbacks On Social Media

Most often brands receive negative feedback and it is important for a brand to deal in such

circumstances. The organisational structure is important in order to have an efficient social media brand

strategy and there should be a cross-functioning and cross product category social media team, from

analyzing the case it is clear that there is no such team in place. The team members should be trained

in social media strategy and they should analyze and react to comments, happening, rumors etc. taking

place on social media. The team should have representatives from each product division with

completing expertise, there should be corporate social media guidelines but each division are

responsible for their actions and allocation of budget. The team should have meetings on a regular

basis and discuss challenges, opportunities and evaluate campaigns and projects that have been

conducted in order to learn from each other. The company have previously ignored and deleted

negative comments, instead they should try to respond in a constructive, fact based and preferably

humorous way. Deleting many negative comments will dilute their trustworthiness.

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5.3 Research Limitations

Clearly, resources and time is the major limitation of this research. Other weaknesses with this study

are connected with the further studies that can be suggested to be made. If there was more time for the

study it would benefit from investigating each outlet of Premier Inn, evaluate their branding strategies

and compare it with other competitors (of same size) to see whether there were differences. However, it

must also be suggested that a study with fewer employees in each company investigated would not be

recommended because of the different views from the respondents on branding given from different

levels in the organisation. Furthermore, additional studies in different geographical areas would be

relevant to see whether the attitude towards branding differ in different cultures (culture of Greater

London would be altogether different from the Wales).

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APPENDIX

Appendix 1: Porter’s Five Force Analysis: United Kingdom Hotels & Motels

(Source: Marketline, 2012)

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Appendix 2: The Questionnaire

Dear Respondent,

My name is Aniket and I am an MBA student at the University Of West London. I am

working on my MBA Dissertation based on ‘Impact Of Brand Equity On Market Sustainability And

Growth – Critical Evaluation Of the Premier Inn Brand’. I would appreciate if you could spare few

minutes and provide me your experiences with Premier Inn. I thank you in advance for your time and

invaluable feedback.

SECTION A: GENERAL QUESTIONS

1. I am a

Female

Male

2. My age is

20-35

35 - 45

45 - 55

Above 55

3. Employment Status

Student

Job Professional

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Business Owner

Other (Volunteers, Politics etc.)

Non Professional

SECTION B: QUESTIONS ABOUT THE PREMIER INN BRAND

4. I have used facilities of Premier Inn.

Yes

No

5. I would like to book Premier Inn in near future.

Very Low

Low

High

Very High

6. I would prefer Premier Inn as my first choice over other hotels in the UK

Strongly Disagree

Disagree

Agree

Strongly Agree

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7. My perceptions of the Premier Inn brand is

A budgeted hotel chain

A hotel chain offering value for money

A hotel chain with excellent Customer Services

Expensive

8. The relationship between value provided and price is

Very Negative

Negative

Positive

Very Positive

9. Premier Inn comes first to my mind when I hear about middle category hotels in the U.K.

Yes

No

10. Premier Inn is among the three first middle category hotels which come to my mind in the

U.K.

Yes

No

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11. Talking about the budget hotels, which do you most prefer

Premier Inn

Holiday Inn

Travelodge

Local Bed & Breakfast

Other

12. The main reason why I chose Premier Inn are

Location

Low price

Good value for money

I had a good opinion about the Hotel

Recommendation

I was sent/had no choice

13. What are the unique characteristics of the hotel

Friendly Atmosphere

Good value for money

Unique location

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Good service

Nice environment

14. Most people in my network hold positive opinion about Premier Inn

Strongly Disagree

Disagree

Agree

Strongly Agree

15. Premier Inn adds value to the customers i.e. worth the money spent

Strongly Disagree

Disagree

Agree

Strongly Agree

SECTION C: QUESTIONS ABOUT THE PREMIER INN’S SOCIAL MEDIA PRESENCE

16. The Social media page of Premier Inn looks attractive

Strongly Disagree

Disagree

Agree

Strongly Agree

17. I have subscribed to the social media page (Facebook, Twitter etc,) of Premier Inn

Yes

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No

18. I have made/or inspired to make booking services through the social media

Yes

No

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