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Introduction
Hotels have a variety of guests and they specialize in offering services and amenities to multiple market segments such as individual, group and corporate customers, with an aim to meet the service expectations of their guests. A hotel derives its biggest competitive advantage from the reputation of its brand, and so concentrates on developing a suitable brand image. Since guests must have a good first impression for them to develop a liking for a hotel or brand, the quality of service at a 5-star hotel is usually very high.
The underlying assumption for hotel operations is that travellers and hotel guests will exercise an independent opinion every time they use the services of a particular hotel. This is contrary to suggestions by some studies that travellers may either be swayed by marketing and prior interaction with a brand and not use their present experience for judging. On the other hand, travellers may also be independent and offer an unbiased opinion that helps a hotel to improve its offerings, and the quality of its service delivery. Irrespective of what motivates customers, hotels must ensure that they are using their resources to do their best to capture the greatest share of their target market.
The internet continues to act as a communication and marketing tool. It provides travellers with ways of planning their journeys and gives them the ability to virtually sample different hotel offerings at bargain prices for premium services. On the other hand, the internet provides hotels with an avenue to reach their target customers across the world. Hotels can understand traveller preferences and domestic clientele preferences then package their calendar offerings according to the market demand (Jobber 1995).
Hotels build guest loyalty so that they can keep earning revenue from frequent guests. Although occasional high profile visits increase the revenue of hotels, it is the loyal customer that contributes a significant amount to the bottom line. And studies show that hotels have been aggressive in implementing methods to increase their customer loyalty. For example, their use of loyalty points for frequent guests is no longer a differentiating factor in their services. All hotels are implementing a form of loyalty program and major hotel chains are already partnering with major credit card issuers to give customers additional benefits. Hotels expect that cardholders will have an additional reason to choose their hotels when they are travelling (Johnson, Whittington & Scholes 1993).
The challenge for hotels is to come up with loyalty programs that are unique and appealing to customers. They have to offer more reasons for customers to choose their establishment over the other offerings in the market, including the provision of services that customers already expect (Jayawardena et al. 2013). Given that many target customers are already conversant with digital technologies and use various forms of these technologies to work and communicate, it is apparent that hotels cannot ignore this frontier in their marketing efforts. In fact, for hotels in Singapore, digital marketing is a compulsive competitive strategy. However, this area of marketing is dynamic and still in its infancy (Wai et al. 2005). Most hotels do not have their own digital marketing agency and therefore have to collaborate with various marketing service providers (Doole & Lowe 2008; Kant 2015).
Objective
The objective of the study is to review digital marketing strategies and how they have performed in the three big hotel chains in Singapore. There are seven hotels in this study Hilton Singapore, The Conrad Singapore, Marriott Tang Plaza, The St. Regis hotel, The W, The Westin and Sheraton Towers hotel Singapore.
Aim of study
The overall aim of this study is to understand how hotels in the hospitality industry in Singapore can utilize digital marketing strategies effectively.
Problem statement
Few studies have explored the strategic view of social media and other digital networks as part of marketing strategy in organizations. There is a need to fill the existing gap in literature with research on actual strategies in the sector. Such information will be instrumental for comparison by practitioners in the industry. It will also assist future researchers to evaluate marketing theories and their applicability.
The study focuses on seven hotels that belong to three major hotel chains in the hospitality industry in Singapore. They are internationally renowned brands in the industry and have significant investments in the country. This study evaluates their digital communication platforms and strategies for building communities and therefore achieving their marketing objectives. These hotels are also multinational companies with global strategies for their local subsidiaries to implement. It would also be insightful to find specific strategies that local subsidiaries formulate and offer the parent company for global implementation.
Like other companies targeting digital platform users, many hotels have a community of users that they target. These communities are identified by their basic characteristics, for example they can consist of members who are current guests and of potential guests. Hotels have an interest in targeting this community because it offers the highest number of their repeat customers.
On digital platforms, social media users share experiences in the same way as word-of-mouth in the real world. However, on this platform, companies are able to participate in this sharing and can immediately monitor what is being shared. Facebook itself is a major social media platform and has the largest online communities in the world. Major hotels in Singapore have a presence on Facebook to develop niche communities. The same applies to all other major social networks in the country, including Twitter. Besides that, there are specialized online platforms that allow specific people to join and participate. The overall nature of Web 2.0 helps to identify other opportunities for community engagement.
However, with all the potential for community engagement, there is always a question of priority and a return on investment as well as the issue of community control and marketing objective guidelines. It is important to understand the relationship between participation, trust and commitment to community and the way a strategy employed by a firm leads to success. Studies show that there are different outcomes for various aspects listed above. According to Wu and Chang (2005), there is a correlation between the trust that members of a community develop for the moderator of the community and member interactions. When a community has a rich interaction, then it is likely to have a high level of trust among its members and is therefore more likely to be based on loyalty in terms of its future engagements.
At the same time, a study by Casalo, Flavian and Guinaliu (2007) indicated that trust is important, without it, member participation in an online community is almost impossible. In the service industry, the product is intangible and the industry favours feedback from consumers as a way to evaluate the quality of service offered. Therefore, it is not surprising to see that the hotel industry is rapidly developing communities online and using these communities as a marketing channel. On the other hand, consumers of hotel services that exist as small groups or individuals, have a high likelihood of sourcing information from an established community that already has information about the nature of offers available and comments about those offers. Therefore, communities serve both producers of services and users of those services (Purnawan 2011).
Members of a community gain trust in their online community when the information obtained from the online community matches their expectations and appears to be honest. Therefore, a member of an online community visiting Singapore will rely more on information provided by the community, when the member has in the past found that his personal experience and the experience described in the online community is similar. On the other hand, hotels will seek to be the subject of discussion in communities that have a vibrant participation from members. Hotels understand that active membership is also an indication of more travel and hotel stay. Therefore, targeting vibrant communities is also a way to target potential clients. However, there is little known about strategies and efforts by hotels in Singapore to engage their relevant online communities.
Hotel companies with a significant presence in Singapore include Hilton, Marriott and Starwood, and this study is looking at their overall agenda when engaging online communities and the role that plays in their overall marketing strategy.
Rationale of study
Marketers around the world in all industries have to come up with creative ways of developing communication techniques that will present the right product message to a target audience. On the other hand, consumerism has grown to dominate all aspects of life in a globalized world (Bernoff, Pflaum & Bowen 2008).
Research Questions
R1. What are the most popular digital marketing avenues used by Singapore hotels in this study?
R2. How are these hotels measuring their digital marketing performance?
R3. How does the digital marketing strategy perform in terms of the indicators used?
R4. What are the challenges and opportunities presented by each method used to measure digital marketing strategy formulation and execution by management?
Research method
The research method is twofold in that it first builds on previous research and academic discussions by other researchers and market reports on digital marketing. The literature review covers digital media, digital marketing, social media and strategic marketing. The second part of the study is an empirical exploration to engage the management teams at the chosen hotels with interviews and a research framework to provide answers. This helps to provide a direction on the best way for hotels in Singapore to utilize digital marketing strategies.
Findings
The findings of the study bring out the importance of utilizing digital marketing. They link the performance of hotels in Singapore as they embrace strategic marketing using various tools within the digital marketing framework. The findings also highlight important information for practitioners including strategy development, implementation process of the strategy, the process of coming up with value in a co-creation environment and performance assessment of the various activities and strategies utilized in the case studies.
Scope and Limitations
An accepted definition of digital marketing covers a large scale of online tools. The number of tools and their uses or reach is too large for this research to cover them all. As a remedy, this research seeks to explore as deeply as possible the popular digital marketing tools in use. The tools analysed in this study are common to all the hotels, and deemed popular by their application and discussion within the digital marketing arena. The study focuses on brand and sales implications caused by the digital marketing aspects of the overall marketing strategies of the participating hotels.
Data collected in the study will be limited to what is available from published literature and any information that is provided by management in the hotels selected. Therefore, any limitations encountered in the quest to assess marketing data and sales data or strategy information from management will serve as a limitation for the overall study.
The study also focuses on a large target population as recipients of various marketing communication. All the hotels picked for the study target a global customer base. To follow the reactions of all customers and potential customers from around the world will not be possible so the study has to rely on common and easily available measurement metrics in terms of customer reach and reaction.
The final limitation of this study is that it may appear inconclusive or narrow due to the considerations made above. However, the depth of the study and its validity depend on specific factors affecting the results and only pertain to the seven hotels in Singapore. While the study is an example that could be used in other hotels and sectors, its validity testing only relies on the chosen case studies. In addition to that, there may be factors affecting the seven hotels uniquely such that they are not readily applicable to other conditions or environments of digital marketing.
Irrespective of limitations highlighted above, the findings of this study will contribute significantly to digital media marketing strategies. Various organizations will be able use the findings to enhance their brand positioning and other marketing strategies.
Hotel chains in Singapore
All the hotels selected for this study are part of global chains. There is a question of whether the hotels are able to provide brand growth as individual hotel units or they must rely on support of the global brand. Marriott and Hilton are major global brands while Starwood is a smaller chain globally. These hotels rely on their name to convince guests to book with them, and they have to compete against independents that may use their independence to convince guests of their bespoke service as a reason for booking with them.
Target customers already use a number of third party booking aids online to select and make their hotel reservations. Big brands in the hotel business own a large number of hotels and maximise economies of scale. They therefore have the biggest benefit that scale can bring in order to get the customers attention. However, on the digital platform, any hotel has an almost equal chance to market its services and gain sufficient customer attention to better its performance. Hilton and Marriott hotels operate as independent units throughout their chain, meaning that all hotels under the chain have names that are a combination of the parent name and their location, for e.g. Hilton Singapore. On the other hand, Starwood has hotels that belong to smaller chains organised into 9 brands. These include the Sheraton, Westin, St. Regis, Four Points by Sheraton and the W etc. In Singapore, they have four brands in operation- the St Regis, the Westin, the W and the Sheraton.
The following table presents a summary of featured hotels in terms of their size and affiliation.
Table 1: Seven hotels in Singapore featured in this study.
Hilton Hotel
Hilton Hotels Worldwide has been embracing various forms of digital marketing opportunities that enable them to increase their reach to potential customers. They also formulate strategies to improve quality of service delivery by meeting customer expectations. As a renowned global brand, guests count on Hilton to deliver exceptional service. The Hilton Singapore sits in the shopping district of the country. Located on Orchard Road, the hotel offers guests a spectacular address in Singapore and a wide range of room types. Its rooms also come with all the associated amenities of luxury packages including culinary options and recreational facilities. There are 421 guest rooms in the hotel, many work areas and contemporary amenities. The hotel also has 12 versatile meeting rooms that can be used for banquets. The rooms come with teleconferencing facilities, Wi-Fi, and they connect to a standard business centre (Hilton Singapore 2015). The hotel also offers a fitness centre and a rooftop swimming pool as a major attraction. It has a shopping gallery that offers a boutique retail experience.
Conrad Centennial Singapore
The hotel sits near Marina Bay and provides excellent business facilities, personalized services and quality luxury experiences. The hotel won the TripAdvisor travellers choice award 2014. It is a part of Hilton Hotels Worldwide, has 507 guest rooms and 2 restaurants. There is a business centre and other five-star facilities and the location allows easy access for Chinatown, Raffles city, and Haji Lane, which are key attractions in Singapore.
Starwood Hotels
Starwood Hotels include Sheraton Towers Singapore, The Westin Singapore, St. Regis Singapore and the W Singapore Sentosa Cove. Each hotel has a specific attraction in addition to luxury rooms and amenities offered to guests.
Sheraton Towers Hotel
Sheraton Towers Hotel in Singapore is located close to Newton Circus, a popular outdoor food court. The hotel has 420 rooms and 3 restaurants. Other attractions include free shopping centre shuttle and outdoor pool. Its location allows guests to easily reach the National Orchid garden and the Singapore Botanic Gardens.
The St. Regis Hotel Singapore
This hotel has 299 smoke-free guest rooms and 3 restaurants. It also includes facilities such as an outdoor pool and fitness centre. The hotel has a 5-star rating and it sits at the heart of the Singapore shopping district.
W Singapore Sentosa Cove
The W Singapore Sentosa Cove has 240 guest rooms and 2 restaurants; it also has easy access to the marina and a full-service spa. It is located on Sentosa Island which give it access to numerous water-based attractions like Tanjong beach and the Marine Life Park. It offers rooms from $507 for per night.
The Westin Singapore
The Westin Singapore offers rooms from $743; however, it also runs promotions for rooms with reduced prices starting from $424 per night. It has 305 smoke-free guestrooms, a rooftop terrace, four restaurants and a full-service spa. Visitors also enjoy an outdoor pool and they have easy access to Marina Bay and Thian Hock Keng Temple. The main building of the hotel has 17 floors.
Marriott Tang Plaza Hotel
The Singapore Marriott Tang Plaza Hotel has 393 smoke free guest rooms and a main restaurant together with two additional restaurants. Guests also get a full service spa, an outdoor pool, breakfast, accessible Wi-Fi on the lobby, an airport shuttle, 24-hour front desk and health club. It is located on Orchard Road.
Background of the study
People across the world are spending a significant amount of time on the internet. They are working, socializing and meeting other life obligations for a number of official and personal reasons. In fact, the online world makes the demarcation of private and public life very thin and sometimes invisible. It provides businesses with an opportunity to interact with their customers both as private entities doing business and also as personal references capable of enjoying and taking part in life activities. It also includes suggestions and provisions of conversational interactions for users and visitors, who are primary target customers, (Wertime 2008).
Human beings are inherently social by nature, and they feel a need for acceptance and fitting in as a key driver to their social interactions. As a result, many of our opinions are heavily influenced by the people around us. People are influenced most by the people who they spend time with. As a result of the advent of the internet, influencers are not limited by their physical location. Their words online are read often by their followers.
In addition to the indirect influencers online, other factors to consider are family relationships, friends, colleagues, business associates, sales persons or business representatives. These relationships merge in a complex matrix to become the overall network of influence for individual online users.
The group of people that affect a persons likes is called a reference group, with Solomon et al. (2010) elaborating that a reference group may be actual or imaginary. It is a group created or emerging from a significant relevance to a persons evaluations. It can also arise due to a persons aspirations and behaviour (Solomon et al. 2010).
Marketing definitions
Communication has always been a key driver of evolution and technological advancement, and continues to shape the way people communicate. At the same time, it is changing the way people interact with corporate entities. In fact, it is almost impossible for marketers to keep up with frequent changes in technology and emergence of new marketing channels.
Marketing an action, a process and an idea that relates to creation, contribution, communication, delivery and exchange of offers that provide value to customers. Some entities may replace customers with partners or the society at large. Many practitioners go with another definition of marketing- an art of informing a target community in story-like form. Therefore, it would be all the things, which a business does to fulfil its purpose, but the activities and strategies that go directly to inform customers of available values are at the core of marketing (Edmiston 2015).
Digital marketing this refers to all marketing activity and ideas in the digital platform and covers everything about the internet used for marketing purposes. It includes internet/online advertising and campaigns as well as content marketing and social media marketing (Edmiston 2015).
The space of online marketing has developed so rapidly in recent times because of the infinite information potential of the internet. Just like in the real world, many people need help to find what they are looking for, in the form of suggestions that will help them achieve their objectives. One of the goals of digital marketing is to allow companies to serve as guides for their target customers so that the overall experience of fulfilling their needs is convenient (Aichner & Coletti 2013). The internet continues to overtake TV, print and radio as a preferred way of communication and access to information. Many traditional media establishments also have a comprehensive presence on the internet to provide similar albeit digital services to their target customers (Smith 2011).
Previously, marketing was a one-way channel where customers did not have a way to talk back to marketers. The task of targeting customers was easy, and many people still believed in advertisements. However, everything changed when the internet became popular and easily accessible in many countries such as Singapore. A new era of marketing began.
One of the most discussed challenges with digital marketing is that despite its reach, the availability of two-way communication and the reduction in entry costs, it is still difficult to estimate and calculate actual return on investment. Part of that has to do with marketing efforts taking longer than a conventional financial calendar of a company. For example, justifying investment in having staff work on social media channels may be impossible within a year, as effects of the channels continue showing beyond a year in terms of referrals and brand building (Li 2014).
Literature review
The next section presents key findings and theoretical or empirical information that helps to provide a research background necessary for answering the research questions for this study. The section presents peer reviewed articles that were found on various online databases using Google Scholars search function. In addition to the use of databases, the topic of the respective peer reviewed articles was an important selection for the section. Some prior thesis reports also provided key insights about the topic of study and they are presented as part of the literature reviews sub topics.
Marketing theory
Marketing endeavours can be distributed through a wide range of tools these days. Many of these tools aid the customer in gathering information to help in decision making. Lilien et al. (2002) described the concept of marketing engineering as bringing new knowledge to the current literature on marketing theory. Their research was instrumental in shaping and highlighting the link of marketing data and social engineering. Part of the study explains that computers and user-friendly software have been major factors in enhancing the abilities of marketers to achieve their objectives. Marketing managers have to consider prices, distribution options, sales among others things affecting the performance of their strategies. The combination, monitoring and execution of these factors affect the end-results that marketing managers achieve (Li 2014).
Managers choose to have a mental model or to build an alternative method that uses a number of decision-aiding tools (Montagna 2011). These tools include spreadsheets that correspond to a decision making model. Here, managers can determine the suitability of different options based on reach and expenditure. In addition, many instances of software already have a design that only requires basic data input. The software offers managers comprehensive reports about the uncertainty of factors and combination strategies and marketing opportunities. According to Lilien et al. (2012), marketing engineering simply refers to the combination of data, information, insight, decisions, and implementation. There are different processes for each state. Data management happens in the first stage, followed by a decision model or a mental model that is dependent on the needs of the marketer. Additional stages have judgement under uncertainty occurring through models, interception and communication. Lastly, there is the consideration and implementation of decisions with regards to financial, human and other organizational resources (Tabor & PawBowska 2010).
With the automation of tasks, it is possible to disseminate marketing solutions to all practitioners. In addition, the volume of data continues to increase at an immense rate. Marketers must work together with other professionals who are experts in data management (Heimbach, Kostyra & Hinz 2015). At the same time, available software solutions make it easy for team members other than marketing professionals to handle duties.
As advancements in the practice of digital marketing continue, hotels have greater expectations of their marketing departments. Companies want marketing expenditures justified just as any other expenditure. This implies that marketers have to keep on matching their decisions and their investments to appropriate returns on investment (Lilien et al. 2002).
Strategic marketing
As marketers seek and implement marketing strategies on social media and other digital tools, they also contribute to the development of strategic marketing as a field. Marketing continues to shift into a strategic role that is important in the growth of the whole organization. The relationship between marketing and operations keeps improving as a result of which the business evaluates its success partly on the outcomes of marketing strategy (Li et al. 2011).
The last few decades have been significant in terms of evolution for marketing. Businesses globally have had to deal with fragmented markets and brand competitors. They also face product commoditization and short product life cycles. The power of consumers is only on the rise as they embrace new technology. Initially marketing performance would be easy to identify, but now the benefits seem to have become vague. Overall, the meaning and the view of marketing continues to change. Without a strategic outlook, a marketer for any brand or product will find it hard to achieve objectives (Leo 2013). Consequently, definitions for marketing have also evolved to comply with changes highlighted above. Today, marketing techniques used by any organization have to work in the context of customer and stakeholder relationship management. Previously, marketing was the conducting of business activities that direct the flow of products to the consumers but the definition has become more elaborate. It now considers marketing as the activity, the institutions and the processes that create, communicate, deliver, and exchange offerings to offer value to end users. Here, customers, clients or partners are the end users (Holliman & Rowley 2014).
Therefore, in a modern context, marketing will include activities aimed at achieving a common goal, which is to provide superior value to users. Product development creates solutions for customers while supply chain management combines the use of physical and informational inputs efficiently to transform them to customer solutions. In addition, customer relationship management identifies customers, creates knowledge, builds relationships and manages perceptions of an organization and its products as held by its target consumers. (David & Sagun 2012)
Based on the roles mentioned above, strategic marketing is a broader view of marketing that allows marketers to go beyond the 4Ps of product, place, price and promotion. Efforts by marketers are transformational to the whole business, they require cross-functional teams and they should remain result oriented (Kumar 2004).
Hotels have to fully implement their marketing strategy as part of the broader strategy. Following this approach will ensure that the plan of action when using digital platforms works according to overall business objectives and expectations. After identifying and setting target groups, companies have to find the best way of reaching the group through digital tools. The implementation of these tools needs focus on all activities that are possible. This effort needs active involvement and observation such as when assessing the performance of strategic marketing, key performance indicators come in handy. These are pre-defined targets that marketers and general managers use to determine the scale of success of individual marketing strategies. A business will look at the type of shareholder value that comes from utilization of digital platforms to realize their marketing strategy. For example, when a customer expresses dissatisfaction on social media causing negative publicity, a business may think of ways to derive value by utilizing the same digital platform as part of its marketing strategy. In this case, a business can go on to address the issue or report on ways that it has addressed the issue so that other customers see it as responsible and caring for customer needs (Baird & Parasnis 2011). This is how the business utilizes the digital platform to increase customer satisfaction and improve its shareholder value.
Marketing strategies by hotels in Asia
According to a case study by Tse (2013) about ICON hotel in Hong Kong, digital marketing played a major role in making the hotel immediately visible in a crowded hotel market place. After opening in April 2011, the hotel became a major hit even becoming number one on popular traveller website TripAdvisor.com. The opening of a hotel is a mammoth assignment, more so when it is an independent hotel. The hotel has to make itself known to the world as soon as possible. It must also immediately offer services of the same or better quality compared to what is available from the competition.
An exploration of the role that digital marketing played in making the ICON hotel successful showed that the hotel relied on its website, search engine optimization strategies, online travel agencies, banner advertising, and social media for advertisement. The overall digital media campaign led to the huge initial success. Through
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