Strategic Marketing draft 1.docx

7/27/2019 Strategic Marketing draft 1.docx

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1.0 Introduction

Provides an introduction to the case study organisation and the report - this

should summaries the development of the business from startup through its

current situation to future development, and the structure of the report.

Best Western International Inc. is one of the world's largest hotel chains

especially in Europe and US. The founder of Best Western was M.K.Guertin

which he started his business on 1946. In 1963, Best Western was the largest

hotel chains in the world by having 699 hotels around the world. And until now, It

has 4195 operate hotels in over 100 countries. Best Western Hotel was very

successful in Western countries and currently are moving and up scaling their

market into Asia. In the year 2011, Best Western changes their name to Best

Western Plus and Best Western Premier. Unlike others hotel chains, Best

Western operate their business as nonprofit membership associate where all of

the franchisee are able to vote as a member of association as a marketing co-

operative.

2.0 Internal Audit

2.1 Operation

Best Western Premier Dua Sentral located at very strategic location which will be

fully develop in 3 years. The location are very convenience with public transport

especially KTM which provided train service within the country and also KL Monorail

which provide monorail service within KL areas. This brings very large advantages

for the guests in Best Western Premier Dua Sentral.

Most of the peoples around the area are from corporate companies and also

Government. Best Western targeted costumers and sales are mainly contribute by

them. The remaining small group of costumers are leisure costumers. Therefore, the

hotels offer facilities like conference rooms, meeting rooms and seminar rooms.

These facilities are very important for those corporate companies and Government

because they often need a place to have meeting and train their staffs. Besides that,

they also offer banquet facilities for those companies to have their annual dinner.


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Others than that, they also have their buffet restaurant, Kembali Kitchen which

bring the convenience to the guests who want to have their meals in the hotel.

Beside Kembali Kitchen, the hotel also having another restaurant call Grill 582 which

provided quality and delicious foods, the guests can enjoy their meals there at the

same time they are able to have their wine at a very good atmosphere area. For

those customers who want to relax and enjoy the music, they can visit the hotel

Punch Bar and Lounge where they can order some drinks and snacks for chilling at

the same time enjoying the music there. Nearby the Punch Bar and Lounge, there is

a cigar lounge which selling variety of good quality cigar for those big businessman.

Another unique facility of the hotel is the all-in-one television control system.

Every television at the hotel rooms enable the guests not only to fulfill the basic

function of the television but also they are able to check their bills, ordering foods

and beverages, communicate with other room guests, playing games and many

more.

As for the businessman, the hotel provided business centre with fax and

photocopying services and also Wi-Fi internet access to enable them to work at the

hotel. Laundry, ironing, and dry cleaning services also provided for the guests

2.2 Marketing

Market Communication

Current Target Market

Corporate and government. [Has great facilities and abundant space for events and

meetings as it is the hotels key focus (Best Western, 2013).

According to Mr. Saiful (senior manager) a total rooms have 360, 10% of the rooms

are long term stay business (9 months to 1 year)

Distribution Channel


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Level of recognition within the market place and image

Their level of recognition within the Malaysian market place is not very strong as

they just open their hotel in 2012. Nevertheless, they are well-known among the

western countries.

Effectiveness of website

Knowledge about their rooms, facilities, restaurants, and basic information are

provided in the website page.

Marketing communication

Facebook, SMS plus, Banner, Twitter, TV, media

BestWesternPremier

Channel Connect via(CRS)

Search and Meta-serchengine

Booking Engine

Hotel Website

Social Network

Mobile Website

Video Sites

Voice Agent Hotel Central Reservation Customer

Walk In

Travel Agent


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Feedback forms

i. Customer feedback forms are placed in each rooms and restaurants

counter.

ii. Feedback forms are also given to customers who used the meetingroom.

iii. Word of mouth between customers and staffs.

Corporate social responsibility (CSR)

i. Participated in eco-friendly program.

ii. Community involvement such as visitation of orphanage, old folks

home. Also, food donations and clothings are given to the needy.iii. They plan to continue their CSR such as mention, during every festive

season.

2.3 Finance

Hotel Profit

According to Mr. Saiful the breakeven point of the hotel is RM6 000 000. Thishigh breakeven generally does not affect the hotels profits as much as they are

financially assisted by their mother company to cover up to 20% of expenses.

Sources of income

The hotel enjoys income from F&B sales and room sales. But this is not the only

source according to the sales and marketing managers. He hotels most

important source of income is their base business which is having contracts with

travel agencies that earn the hotel up to RM 3 000 000 a month. This is

substantial towards their sustainability and profit margin. The hotel has up to 5

travel agencies on contract.

During off peak season, hotels tend to suffer in achieving high profits, Best

Western hotel focuses on keeping rooms at a standard price and signing


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contracts with government and football teams that pay in advance to use the

hotel. The hotel charges food and beverages at 3 times the mark up price to

cover up for expenses maintain profit and purchase new stock.

2.4 Human Resource

The requirement and the process in order to recruit employees in Best Western

Premier that are firstly, candidates must above age which is stated in Malaysian

Labour Law where the required minimum age that an organization or company

recruit is 18 years old. Second, the candidates must have at least some

experience and knowledge on how to serve and interact with the customers. This

will help to reduce the time undergo the training and straight stationed at the front

line of the operation with of course, some training. Third, when the candidates

have required these two requirements, the next process is to interview each of

the candidates and provide questionnaires for candidates to answer depending

on which department the candidates applying which usually takes thirty minutes

to one hour. If the candidates applying for the management position, the

candidates will be interview by heads of department that are Human Resource,

Front Office, Sales and Marketing, Housekeeping, and General Manager. After

successful gone through these process, they will be providing trainings in order

to improve the candidates productivity and performance in order to meet the Best

Western Premier service standard. For example of the trainings are in service,

food safety and security. For the managers position will provide training such as

skill development, team building and team bonding. These managers will be

trained in Acedemy Best Western at Bangkok.

According to Mr Saiful from Best Western Premier Senior Sales Manager, the

staff turnover for this hotel is quite high. The reasons are this hotel is rather newwhich have been developed only for one year. The environment and the

management are new and this may cause the employees feel unease with

working environment here. In order to maintain their employees, they are

recommended to implement intrinsic and extrinsic reward which could motivate

the employees to stay working in Best Western Premier. If the Best Western


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Premier lacking of employees, they will recruit the foreigners such as Nepal and

Bangladesh that have contract from Malaysia Association Hotel or ask from the

selected college or university to work for Best Western Premier Hotel.

Furthermore, the Human Resource Department implementing friendly and

positive workplace for the employees to feel comfortable working and

communication with each other in order to achieve the companys goals and

objectives.

3.0 External Audit

3.1 Market Segment Analysis

Table 1: Best Westerns Market segment analysis

Best Western is using demographic factor which is occupation to look for their

target markets. It segmented their customers into three groups which are

corporate clients, government group and leisure guests. Table 1 showed the

highest targets they aimed are corporate clients and government group because

they dependant on these groups as their base business. The reason is

businessman nowadays are increasingly and establish their business around

develop places especially Kuala Lumpur after management team interview Mr.

Saiful who is senior manager of Best Western. Hence, conference rooms

become important places for businessman to have meeting with their clients and

0%

10%

20%

30%

40%

Corporate c lients Government

group

Leisure guests


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Best Western always is their first choice because the location is quite convenient

for them to reach as it placed at Kuala Lumpur Sentral.

Other than that, there is always 10% earnings out of 360 rooms are for those

customers who having long term stay business at least 9 months to 1 year period

(Mr. Saiful, 2013). Seems corporate and government groups are assisting Best

Western to gain lots of profitability, the leisure guests are obviously lower. So, to

be more balance the profits for the hotel, Best Western should implement some

extra facilities such as mini pool and spa to attract more leisure guests to visit the

hotel.

3.2 PESTE Analysis

3.2.1 Political

Every industry especially hospitality industry do apply service charge on

customers. Government Service Tax (GST) is legislated tax at rate 6% and it

efficient from January 2011 which enforced under the Service Tax Act 1975

(Jackie, 2013). Besides, Jackie (2013) said that this collected service tax will

going to paid to government once every two months hence the nature of

businesses and type of services subject to licensing and payment of service

tax may refer to Second Schedule of Service Tax Regulation 1975.

This rule definitely will directly influence customers purchasing power. When

price of product increasing after GST has fully applied, it continuously

considered as extra another burden for residents especially for those who

stay in high living costs mainly in big cities such as Kuala Lumpur, Penang,

and Johor Bahru (Palil and Ibrahim, n.d.). Hence, Best Western which

located in Kuala Lumpur also might get influenced because of this higherservice charge.

3.2.2 Economical


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Table 2: Malaysia unemployment rate

Source: Malaysia unemployment rate 2013,

http://www.tradingeconomics.com/malaysia/unemployment-rate

Table 2 showed Malaysia unemployment rate fluctuated through the year.

Factor of hiring cheaper cost of foreign labour is relatively to this

unemployment rate. Lower salary for foreign labour become an attractive

reason for employers to hire them as they can help the company to reduce

expenses compare to local employees (Insider Asia, 2009). Other words,

high unemployment rate could influence companys productivity henceperformance especially when relate to significant positions in organizations

(Salleh, e al., 2012). Lack of employees or knowledgeable foreign labour

may lead to inefficiency outcomes for a task for example a banquet

organized in the hotel. The banquet couldnt go well and it will bring negative

effect of reputation for the hotel.

3.2.3 Socio-cultural
http://www.tradingeconomics.com/malaysia/unemployment-ratehttp://www.tradingeconomics.com/malaysia/unemployment-rate


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Figure 1: Outlook 2012 Asia

Source: ITB World Travel Report 2011/12,

http://www.itb-

kongress.de/media/itbk/itbk_media/itbk_pdf/WTTR_Rep

ort_komplett_web.pdf

From figure 1, there is 32% of people claimed that they will travel more in

2012 than in 2011 while 37% also had the similar wants and only 19% people want

to lesser their travel (IPK International, 2011). Seems that people lifestyle has been

changed. So, it would help in hospitality industrys profitability as well as Best

Westerns performance. This is because increasing of tourists visit to hotel will lead

to higher earnings for the hotel even greater profitability for its future.

However, Best Western target on corporate and government groups as their

base business as they are able to attract those businessman to choose Best

Western by provide enough conference rooms for them to meeting with clients.

3.2.4 Technological
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The fast pace of technology advancement make hotel always win customers

demands. Online booking, for instance become a common issue in every industry

including hospitality industry. As usual Best Western also applies online booking on

customers. Indeed, this online booking create convenient for customers especially

those come from abroad hence it help Best Western to reach its competitive

advantage.

Since every hotel using online booking, Best Western implement Online Booking

Bonus Promotion for customers who apply online booking between November 19,

2012 and June 30, 2013 to attract more customers switch their alternative hotel to

Best Western (John, 2012).

Other than that, Best Western also employ Early Internet Special which discount

between 15% - 30% for customer planned arrival date and this program is not allow

for cancellation or shortened the period of staying even full or partial refund from

hotel as this is the their terms and conditions (TripAdvisor, 2013).

These strategies that used by Best Western will lead to higher profitability for the

hotel.

3.2.5 Environmental

Environment issue such as air pollution which is haze problem from Indonesia is

happening currently. The haze spread north in Malaysia and it influenced air quality

in Kuala Lumpur, the capital, and in some neighbouring areas getting serious into

unhealthy zone (John and Nusatya, 2013). Hence, it may lead to low earnings for

hospitality industry as lesser customers visit to hotel as they are more concern their

healthy and choose to stay home.

Conversely, there is no influence for Best Western when management team got

information from Mr. Saiful during interview. He claimed that quantity of customers in

Best Western still maintain during air pollution recently as well as customers prefer

stay in hotel rather than going out from rooms.

3.3 Competitor Set Analysis


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Identify the case study organisations competitor set (minimum of two direct competitors);

compile and justify a positioning map for the organisation in relation to its competitor set

using criteria that are determined by your group as most appropriate.

Picture: Best Western Primer KL Sentral Positioning Map

High Price

Low Price

High Quality Low Quality

Hilton

Best Western Primer

Cititel Mid Valley


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4.0 SWOT Analysis

4.1 Strengths

a) Consist of wide range of food and beverage outlets supported by

internationally trained culinary experts (Kembali Kitchen, Grill 582, Punch Bar &

Lounge and HUGOs).

b) Has great facilities and abundant space for events and meetings as it is the

hotels key focus.

c) Function rooms are modernly designed and equipped with up-to-date audio

visual equipment catering to the needs of todays digital technology in

organizing events.

d) Largest chain hotel in the world. And there are well-known among western

countries.

4.2 Weaknesses

a) Poor efficiency front desk and housekeeping (Appendix 1).

b) Poor brand awareness in Malaysian Market.

c) Toilets and bathrooms has a modern design, however it do not suit Malaysian

culture. For example, if someone is taking a shower it is possible to see a blurry

image and shape of that person.


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4.3 Opportunities

Table: Tourist arrivals and receipts to Malaysia (Tourism Malaysia, 2013).

a) The table above shows a constant increased in tourist.

b) Located at a strategic place where transportation (KL central, Pudu Central

and KLIA) and point of interest are located nearby (China town, little India, Mid

Valley Megamall.. etc).

c) People are actively using media such as social network.

4.4 Threats

a) Intense competitions as there are many hotels located around the vicinity.

(Konam hotel, Hotel Classic Inn, My hotel, Hilton, Boulevard hotel, Cititel Mid

Valley, palace of the golden horses, aloft , Le Meridienetc.)

b) Technology turnover is high. Have to keep up to date result in high cost.


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5.0 Key Factors for Success

Identify and justify two key critical success factors. These factors should be based

on a logically from the situational audit.

1) Their accounting and control department Best Western Primer uses their

own designed system name Comache system by Asia Bangkok (Best western inc.)

to run their billing/account, thus they are able to achieve full prompt payment from

customer, control expenditure or expenses efficiently, and monitor their sale and

budgets according to their target.

Mr Saiful emphasizes that the cash flow for every hotel is important. This is because

without any cash flow the business will not be able to run next month. Thus, to

ensure a constant cash flow they develop an account for their customer under the

hotel, so that customer can put in large quantity of money into the account for future

use. Therefore when the customer come to stay the hotel will deduct the money from

the account. This lump sum of money can also act as a cash flow for the hotel.

3) Strategic location

4) their target market is corporate governance.

5) top selling is meeting rooms.

6.0 Mission Statement

A mission statement is important process in developing companys strategic plan

while it always is a goal to be achieved through the project (Alave and Karami,

2009). Regarding to interview, Mr. Saiful mentioned that Best Western created their

mission statement which is embarked on a mission to lead the hotel industry in


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customer care. Other than that, they also wanted to build the worlds largest family

with the hotels and employees sponsoring children who need help especially from

orphanage in future.

Though our analysis, Best Western should enhance their mission statement to

always serve people first while provide high quality service to customers and strive

for success. Fully believe that it would more motivate employees in Best Western

by having clear target to achieve for the hotel.

7.0 Positioning Statement and Target Market Identification

Company Philosophy

The hotel is focused on the customer. There is also a desire for the company to

sponsor children in need in the forms of donations and charity functions.

Business Definition

The business is focused on catering to corporate and government customers. The

government would have to pay in advance for use of the facilities. The hotel sells

meeting rooms, conference rooms that are spacious and well managed

Distinctive Competencies

Event rooms are constantly refurbished and up to date which is essential for keeping

up with current day technology and being on par with competitors. Best Western

also takes pride in offering catering services to anywhere around Malaysia

Future Market Position

Future looks bright with expansion projects planned around melacca and ipoh

Corporate Objectives


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To create awareness I the Asian market , to achieve their main objective to become

the worlds largest chain

8.0 Gap Analysis and Ansoff Strategy Formulation

9.0 Marketing Mix Objectives

9.1 Product

9.2 Price

9.3 Place

9.4 Promotion

9.5 People

9.6 Physical Evidence

9.7 Process

10.0 Monitoring, Control and Contingency Planning


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References

http://book.bestwestern.com/bestwestern/MY/Kuala-Lumpur-hotels/BEST-

WESTERN-PREMIER-Dua-Sentral/Hotel-Overview.do?propertyCode=99056 [Accessed 28thJune 2013].

Tourism Malaysia (2013) Research. [Online] Retrieve from:

http://corporate.tourism.gov.my/research.asp?page=facts_figures [Accessed 29th

June 2013].

http://www.bwpduasentralkualalumpur.com/ppc/facilities.php

http://www.bestwesterndevelopers.com/about/index.html

Palil and Ibrahim (n.d.) The Impacts of Goods and Services Tax (GST) on middle

income earners in Malaysia. [Online] Retrieved from:

http://www.wbiconpro.com/213-Rizal.pdf[Accessed 27th June 2013].

Jackie (2013) Malaysia Service Charge Vs GST. [Online] Retrieved from:

http://www.jackieho.net/2013/05/08/malaysia-service-charge-vs-government-service-

tax/[Accessed 27th

June 2013]

InsiderAsia (2009) Foreign labour keeps Malaysia unemployment low. [Online]

Retrieved from:http://www.theedgemalaysia.com/sports/151220- foreign-labour-keeps-malaysian-unemployment-low.html [Accessed 30th March 2013]

Salleh, R., Nair, M.S. and Hrun, H. (2012) Job satisfaction, organizational

commitment, and turnover intention: A case study on employees of a retail company

in Malaysia. [Online] Retrieved from: http://www.waset.org/journals/waset/v72/v72-

59.pdf[Accessed 27th June 2013].
http://book.bestwestern.com/bestwestern/MY/Kuala-Lumpur-hotels/BEST-WESTERN-PREMIER-Dua-Sentral/Hotel-Overview.do?propertyCode=99056http://book.bestwestern.com/bestwestern/MY/Kuala-Lumpur-hotels/BEST-WESTERN-PREMIER-Dua-Sentral/Hotel-Overview.do?propertyCode=99056http://book.bestwestern.com/bestwestern/MY/Kuala-Lumpur-hotels/BEST-WESTERN-PREMIER-Dua-Sentral/Hotel-Overview.do?propertyCode=99056http://corporate.tourism.gov.my/research.asp?page=facts_figureshttp://corporate.tourism.gov.my/research.asp?page=facts_figureshttp://www.wbiconpro.com/213-Rizal.pdfhttp://www.wbiconpro.com/213-Rizal.pdfhttp://www.jackieho.net/2013/05/08/malaysia-service-charge-vs-government-service-tax/http://www.jackieho.net/2013/05/08/malaysia-service-charge-vs-government-service-tax/http://www.jackieho.net/2013/05/08/malaysia-service-charge-vs-government-service-tax/http://www.theedgemalaysia.com/sports/151220-%09foreign-labour-keeps-malaysian-unemployment-low.htmlhttp://www.theedgemalaysia.com/sports/151220-%09foreign-labour-keeps-malaysian-unemployment-low.htmlhttp://www.theedgemalaysia.com/sports/151220-%09foreign-labour-keeps-malaysian-unemployment-low.htmlhttp://www.theedgemalaysia.com/sports/151220-%09foreign-labour-keeps-malaysian-unemployment-low.htmlhttp://www.waset.org/journals/waset/v72/v72-59.pdfhttp://www.waset.org/journals/waset/v72/v72-59.pdfhttp://www.waset.org/journals/waset/v72/v72-59.pdfhttp://www.waset.org/journals/waset/v72/v72-59.pdfhttp://www.waset.org/journals/waset/v72/v72-59.pdfhttp://www.theedgemalaysia.com/sports/151220-%09foreign-labour-keeps-malaysian-unemployment-low.htmlhttp://www.theedgemalaysia.com/sports/151220-%09foreign-labour-keeps-malaysian-unemployment-low.htmlhttp://www.jackieho.net/2013/05/08/malaysia-service-charge-vs-government-service-tax/http://www.jackieho.net/2013/05/08/malaysia-service-charge-vs-government-service-tax/http://www.wbiconpro.com/213-Rizal.pdfhttp://corporate.tourism.gov.my/research.asp?page=facts_figureshttp://book.bestwestern.com/bestwestern/MY/Kuala-Lumpur-hotels/BEST-WESTERN-PREMIER-Dua-Sentral/Hotel-Overview.do?propertyCode=99056http://book.bestwestern.com/bestwestern/MY/Kuala-Lumpur-hotels/BEST-WESTERN-PREMIER-Dua-Sentral/Hotel-Overview.do?propertyCode=99056


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IPK International (2011) ITB world travel trends report December 2011 . [Online]

Retrieved from: http://www.itb-

kongress.de/media/itbk/itbk_media/itbk_pdf/WTTR_Report_komplett_web.pdf

[Accessed 27th June 2013]

John (2012) Best Western Online Bookings Bonus of 250 points. [Online] Retrievedfrom: http://loyaltylobby.com/2012/12/01/best-western-online-bookings-bonus-of-

250-points/[Accessed 27th

June 2013].

TripAdvisor (2013) Early Internet Special- Hotel Discounts. [Online] Retrieved from:

http://www.bestwestern.com/deals-offers/special-rates/early-internet-hotel-

discounts.asp[Accessed 27th June 2013]

John, O. and Nusatya, C. (2013) Singapore smog eases as Indonesian planes

waterbomb fires. [Online] Retrieved from:

http://thestar.com.my/news/story.asp?file=/2013/6/25/worldupdates/singapore-smog-eases-as-indonesian-planes-waterbomb-fires&sec=Worldupdates [Accessed 27th

June 2013]

Alavi, M.T. and Karami, A. (2009) Managers of small and medium enterprises:

mission statement and enhanced organisational performance. Journal of

Management Development, Vol. 28, No. 6, pp. 555-562.

Appendices

Appendix 1

Location Map
http://www.itb-kongress.de/media/itbk/itbk_media/itbk_pdf/WTTR_Report_komplett_web.pdfhttp://www.itb-kongress.de/media/itbk/itbk_media/itbk_pdf/WTTR_Report_komplett_web.pdfhttp://www.itb-kongress.de/media/itbk/itbk_media/itbk_pdf/WTTR_Report_komplett_web.pdfhttp://loyaltylobby.com/2012/12/01/best-western-online-bookings-bonus-of-250-points/http://loyaltylobby.com/2012/12/01/best-western-online-bookings-bonus-of-250-points/http://loyaltylobby.com/2012/12/01/best-western-online-bookings-bonus-of-250-points/http://www.bestwestern.com/deals-offers/special-rates/early-internet-hotel-discounts.asphttp://www.bestwestern.com/deals-offers/special-rates/early-internet-hotel-discounts.asphttp://www.bestwestern.com/deals-offers/special-rates/early-internet-hotel-discounts.asphttp://thestar.com.my/news/story.asp?file=/2013/6/25/worldupdates/singapore-smog-eases-as-indonesian-planes-waterbomb-fires&sec=Worldupdateshttp://thestar.com.my/news/story.asp?file=/2013/6/25/worldupdates/singapore-smog-eases-as-indonesian-planes-waterbomb-fires&sec=Worldupdateshttp://thestar.com.my/news/story.asp?file=/2013/6/25/worldupdates/singapore-smog-eases-as-indonesian-planes-waterbomb-fires&sec=Worldupdateshttp://thestar.com.my/news/story.asp?file=/2013/6/25/worldupdates/singapore-smog-eases-as-indonesian-planes-waterbomb-fires&sec=Worldupdateshttp://thestar.com.my/news/story.asp?file=/2013/6/25/worldupdates/singapore-smog-eases-as-indonesian-planes-waterbomb-fires&sec=Worldupdateshttp://www.bestwestern.com/deals-offers/special-rates/early-internet-hotel-discounts.asphttp://www.bestwestern.com/deals-offers/special-rates/early-internet-hotel-discounts.asphttp://loyaltylobby.com/2012/12/01/best-western-online-bookings-bonus-of-250-points/http://loyaltylobby.com/2012/12/01/best-western-online-bookings-bonus-of-250-points/http://www.itb-kongress.de/media/itbk/itbk_media/itbk_pdf/WTTR_Report_komplett_web.pdfhttp://www.itb-kongress.de/media/itbk/itbk_media/itbk_pdf/WTTR_Report_komplett_web.pdf


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Appendix 2

Organisational Chart

General

Manager

Executive

Assistant

Manager

Human

Resource

Sales &

MarketingHousekeeping Front

OfficeFood &

BeverageFinance Maintenance Se


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Appendix 3

Questions and Answers

Appendix 4

A. Code of Conduct

B. Team Meeting Ground Rules: Participation

C. Team Meeting Ground Rules:Communication

D. Team Meeting Ground Rules:Problem Solving

E. Team Meeting Ground Rules:Decision Making

F. Team Meeting Ground Rules:Handling Conflict

H. Meeting Procedures:

Signatures


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Appendix 5

1st Meeting Minutes

Appendix 6

MARKET RESEARCH

Documents

Strategic Marketing draft 1.docx