Date of submission
International marketing entails the application of marketing techniques and principles in more than one country across national borders or oversees. It is based on the expansion of a company’s marketing strategy with more attention being diverted to marketing targeting, marketing identification as well as decisions internationally. However, international marketing is a function of internal and external factors that undermine the application of the marketing strategies and techniques that are applicable in organizational expansion. It is also vital to ensure that the international marketing strategy has been reviewed on a quarterly basis as it acts as a benchmark to measure progress (Bowman & Gatignon, 2010, 59).
This paper shall critically analyze the hotel industry In relation to international market development for Moxy and a marketing mix that will be appropriate for the recommended strategy.
Table of Contents
Moxy hotel is a global multinational chain which implies that it will be bound by political factors such as tax rates and the political stability of the country that it is operating in. Since governments are advocating for job creation, Moxy plays its role through the creation of employment opportunities. Economic factors are also of concern to the operations of Moxy. The factors, leverage costs, prices and demand. Due to the dwindling levels of disposable income, Tesco, the hotel chain has changed its strategy to the advertisement of only the value brands and not the luxurious items. The international hotel industry has been the largest growing industry in the recent past. It ranks as the largest employer in the world today after the government (SEE Appendix A). Social factors play a factor in the sense that consumer needs are subject to factors such as their preferences, attitudes, beliefs and seasons. Moxy puts this into consideration by providing a wide array of products and services that consumers would choose from.
Technological factors such as self-service check-out points and online bookings has been convenient for operations of Moxy hotels as booking from customers globally are processed within a very short time. The multinational chain store has also set aside investments that would cater for intricate internet connections that would cater for its technologically savvy clientele. It also adheres to social factors by preservation of the environment through reduction of waste produce and meeting the social conscience of its clients. Legislative practices such as the government regulations also undermine the operations of Moxy hotels. Legislations such as the Food Regulating Commission see to it that Moxy regulates the prices it charges to its consumers.
Moxy hotels face competition from other rival companies within the hotel industry. In retaliation, the companies develop product differentiation techniques to target a certain target market. This makes the target market become much smaller thus increasing the competition within the hotel industry.
There are few suppliers that handle the needs of Moxy hotels especially now that Ikea handles most of the furniture supplies and interior décor. Customers have different income levels, necessities and buying capacities (See Appendix B). A vast majority of the customers will prefer affordable prices due to the prevalent economic crisis.
The arrival of new entrants in the hotel industry can be disruptive because it increases the competition. However, with the high costs of entry, such cases are rare. The chain store has also been making attempts to diversify its market share portfolio by offering substitute goods that consumers would choose from. For instance, in the realm of technology and communication, Moxy has both wireless and capable internet that the consumer would choose from depending on their required internet speeds.
The growth of the industry has been characterized by the wide variety of job opportunities it offers in different sectors within the industry, restaurants and resort and tourism. In addition, the most successful hotel managers in the contemporary hotel industry happen to be very successful business administrators as well. The managers will often work under tight time constraints while at the same time embracing managerial competencies and range of skills that are conventional in the business community at large. Recently, the hotel industry has been largely driven by global tourism. For hotel managers who may wish to apply their marketing strategies for the global marketing expansion, they should be clear on when and where exactly to invest (Pulizzi, 2014, 99). The managers should also bear in mind that the hotel industry calls for a multicultural and multigenerational workforce.
The industry therefore does not discriminate because of the dealings with people from all walks of life and the preparation of cuisines that target customers from various countries that may be residing in the hotel country. The unexpected uncertainties in the industry make it very risky for other companies to join in while those that are dominating the industry have to always sharpen their competitive edge.
Resource based view suggests that organizations ought to derive operational benefits within the organization. The internal factors are within the company’s doors or management and may impact the success of the Moxy Hotel chain. This includes strategic constraints, marketing mix modeling and marketing mix. The company management and the leadership style are important internal factors in the management impact of an organizational culture. Business relationships and processes within departments are also important in impacting the effectiveness and efficiency of a business.
Moxy hotel is a large multinational hotel chain organization which is an affiliate of the Marriott’s hotels. The work force serves all customers diligently notwithstanding their cultural affiliations. The hotel has well taken full advantage of the European market because its room rates retail at less than a hundred dollars. This is more convenient for the average trendy business man because the same services are offered in other hotels at higher prices. For instance, it has so much focus on lobbies that have high energy zones and public designated places that are appropriate for intimate conversations.
The international strategic approach for Moxy hotel chain will call for a long term view as well as tools such as the customer value lifetime models. The models can be very important in simulating the churn rate, revenue per customer and the effects of strategy on acquisition. For Moxy hotel chain, the marketing strategy should take a very close scanning of the external and internal environments. The internal environment factors entail the marketing mix, strategic constraints, plus performance analysis and marketing mix modeling. The external environment that Moxy hotel chain should consider entail factors such as political/legal environment, customer analysis, target market analysis, competitor analysis and the evaluation of a technological environment that is most likely to impact success.
Moxy hotel is among the dominating hotel chains in the hospitality industry and has a wide variety of foods and beverages. The target customers who are the trendy youths have their interests taken care of
Legal issues that surround the security and safety of the food products and beverages
Improving the brand image
Expansion in most countries in the European market
External competition and Government laws and regulations
The challenges that are inherent in the operations of the Moxy hotel chain is the hotel law. This includes the legal issues that surround the security and safety of the products and the practice of hotel law which is equally vast and varied. It includes management agreements to development deals, the liability of foods and beverages and labor and employment liability. There are also other labor issues that ought to be addressed and this are inclusive of wage hour audits that are performed by the department of Labor. On the business aspect of the industry, there might be a new wave of hotel development that engenders on related issues such as joint ventures, land acquisitions and entitlements.
The global expansion of a business will require different strategic options than the plans that are meant for the growth and development of a business over time. However, the identification of a global business strategy is possible and a new business strategy and work backwards to formulate a business implementation from a global perspective. International marketing strategies are the fundamentals that underpin the marketing plans that are intended to attain the marketing objectives. The strategies are developed as multiyear plans that have a tactical plan outlining specific actions that need to be accomplished yearly. This will be of paramount importance as the company will be in a position to measure its progress.
An international strategic plan may be established to identify the challenging goals, business alternatives, an optimum marketing mix and a detailed implementation. Moreover, there should be plan that monitors progress as well as a set of contingencies in the event of problems arising in the course of plan implementation.
Moxy hotels have seen to it that it has brought the same experience to the generation X and Y in smaller portions and at a very affordable price. However, an old generation traveler that is looking for a contemporary and trendy vibe at an utterly affordable rate will find the Moxy hotel appropriate. An independent social traveler looks forward to cohabiting in a seamless world that alternates between a public and a private setting. Young travelers want to experience a low pricing and nerve style and tend to prioritize on a dynamic experience in public places a mere room product service. The lobby will also contain an all-time feature of snacks and drinks.
Moxy hotels are a chosen brand name for the joint venture between IKEA and Marriott hotels. The ulterior motive of the joint venture is to open up about one hundred and fifty Moxy hotels across Europe starting in Germany, Italy, Ireland, Austria, United Kingdom, Denmark, Finland, Belgium, Netherlands, Sweden and Norway. According to the supporting case study material, the first Moxy hotel will be opened near Milan’s Malpensa airport in the year 2015. The rooms within the hotel will be priced at around €60 (£52) to €80 a night. Apparently, it is apparent that the hotel has prospective of international expansion. However, there are some strategic options that are vital and should not be downplayed whenever an organization is looking forward to expand internationally in the quest of expansion its customer base. This part of the paper will hence focus on such strategic options and relate them with the case of Moxy hotels.
Moxy hotel, for instance can embrace a strategic option of keeping its prices consistent all through its operation existence. The thing is, the global world has now become transparent and rate parity is becoming a standard best practice (Moore, 2006, 113). Moxy hotels should therefore see to it that rate parity exists in all its booking sites in all countries. What lives bitter taste in the mouth of a client is to play for a hotel facility somewhere then find out that the same facility is being offered at a much lower rate somewhere else. For this reason, the hotel chain has consistently lower prices in all its branches which is a marketing strategy it is using to counteract the competition that is inherent in the hotel and hospitality industry.
Due to the vast products and services that the Moxy hotel offers to its customers, the pricing strategy will have to take into account all these facilities and differentiate those that are most likely to differ from one season to the other. Inventory allocation and the management of sell rates are crucial and should be monitored consistently so as to attain some form of consistency in the pricing procedures.
It is also imperative to acknowledge that when it comes to global or international expansion, there are many ways of breaking into the foreign markets and the approaches will evolve with the growth of company scale. In the international growth strategies, there is no a “one size fits all” since some will undertake an opportunistic basis while others will be executed according to well laid out plans.
Moxy hotel can also partner with different channels by taking into account the beneficial activities of other companies in different industries so long as they will work together in the attainment of a mutual goal that goes beyond making profits and deriving customer utility. The products or the benefits that the Moxy hotels are willing to offer are an approachable service with a contemporary design and at a very affordable price (See appendix B).
All the guest rooms will be well designed and functional. Bathroom amenities will be upscale. Coloring palette will exhibit calming neutral tones that combine natural materials in evoking a comfortable, organic and restorative feel. The Moxy hotel is all about the provision of the “bare maximum.” The smaller room size, the fashionable low cost furnishing, smaller staff and a sole F & B hybrid which drives the rates down.
Moxy hotels should also extend its reach and use this strategic option that would develop its international presence. Expanding globally for any company does not reap benefits unless the company extends its reach by providing services that well suit the areas they have expanded to. This is basically the essence of customer satisfaction. Moxy hotels should therefore see to it that even while globally expanding, they also provide services and amenities such as cuisines as well as some cultural events and festivals that will suit the new market so as to gain market approval in that particular state or nationality.
The aspects of marketing mix are also referred to as the 4ps. They entail product, promotion, place and price. The key aspects that will be appropriate for the identified strategy are place and promotion. Moxy hotels need to first establish the promotion method that is best applicable in the communication of benefits and features of the services to the target customer. The hotel will also figure out where exactly it will offer its services and how those services will get to the final consumer. Promotion methods may encompass elements such as advertising, sales promotions and public relations.
Moxy hotel can partner with different channels by taking into account the beneficial activities of other companies in different industries so long as they will work together in the attainment of a mutual goal that goes beyond making profits and deriving customer utility. In this respect, the hotel industry has partnered with IKEA and Marriott hotels. Marriott hotels dominates the hotel industry while IKEA is a leading Swedish and a top notch furniture manufacturer. The recommendation is appropriate because the combination takes the beneficial activities of other companies.
A marketing mix modeling becomes applicable in the determination of optimal marketing budget and the allocation across the marketing mix in the achievement of strategic goals. The marketing mix models also come in handy in brand management to create and spending across a brand portfolio.
Moxy hotels among other trendy amenities will contain Free Wi-Fi all through, “plug and Meet” meeting spaces, an option of checking in just by using a mobile gadget, floor-ceiling art wall in every bedroom, in-built USB ports in every guest room and Flat Screen televisions. Moxy hotels are meant to literally revolutionize the industry. The features attract travelers with a younger sensibility and whom contemporary style is imperative. The hotel lacks a lot of competitors because its design well suits the generation X and generation Y because of its design that has been accustomed for these target market (Bergh & Behrer, 2013, 112). Most of the hotel rooms in the European market have been designed for the high end business man and the rooms are a bit costly because they are the target market.
The Moxy hotel ensures the end customer gets value for his money by having a well customized experience that perfectly suits his pocket. The hotel has seen a white space in the European market because its room rates retail at less than a hundred dollars. It has so much focus on lobbies that have high energy zones and public designated places that are appropriate for intimate conversations.
In the international growth strategies, there is no a “one size fits all” since some will undertake an opportunistic basis while others will be executed according to well laid out plans. Companies should, therefore, do a market research to arrive at a certain global growth strategy, but not embracing one because of the mere fact that a fellow company has adopted a similar strategy. The international strategic growth for the Moxy hotel chain will call for a long term view as well as tools such as the customer value lifetime models. The models can be very important in simulating the churn rate, revenue per customer and the effects of strategy on the acquisition. For Moxy hotel chain, the marketing strategy should take a very close scanning of the external and internal environments
Bergh, J. ., & Behrer, M. (2013) how cool brands stay hot: Branding to Generation Y. London: Kogan Page.
Bowman, D., & Gatignon, H. (2010) Market response and marketing mix models: Trends and research opportunities. Boston: now.
Moore, G. A. (2006). Crossing the chasm: Marketing and selling disruptive products to mainstream customers New York: Collins Business Essentials.
Pulizzi, J. (2014). Epic content marketing: How to tell a different story, breaks through the clutter, and wins more customers by marketing less.
Richter, T. (2012) International marketing mix management: Theoretical framework, contingency factors and empirical findings from world-markets. Berlin: Logos.
FIGURE 1: Projected spending on leisure & business travel, 2012-20
|World||2012||2013||2014||2015||2016||2017||2018||2019||2020||% change 2012-20|
|Leisure travel spending||3,222.1||3,324.1||3,479.7||3,652.7||3,823.2||3,999.8||4,184.6||4,375.2||4,570.5||+41.8|
|Business travel spending||1,017.4||1,048.9||1,103.5||1,161.1||1,214.2||1,266.2||1,318.0||1,369.7||1,418.8||+39.4|
The internal environment for Moxy hotels considers the interests of its suppliers, customers and competitors. The company has partners with IKEA suppliers for its interior décor and Nespresso for its coffee supplies. Nespresso supplies Moxy hotels with high quality coffee and recipes that match customer needs. It adheres to legal factors by carefully researching names and products designs in avoidance of conflicting third party rights. The hotel chain has adopted technologies such as guest free Wi-Fi and smart technology solutions.
The Moxy hotels have been committed to being the best lodging and food service company in the hotel industry. It handles its employees in a manner that creates an extraordinary customer service as well as the shareholder value. Its goals and objectives is acting with integrity and upholding ethical and legal standards.
The marketing department aims at reshaping the contemporary hospitality industry by providing new guest experiences, changing brands and conforming to the expectations of its customers.
The information system for Moxy hotels enhances the services that it provides to its final consumers. It has catered for the provision of “free-to-guest” internet access. It has a well established hotel standard management system which embraces a comprehensive access control function.
Profitability of Moxy hotels has had persistent profit growth by taking advantage of cost reduction strategies such as opening many branches internationally thus experiencing economies of scale.
The products of Moxy hotels target the affluent and technology savvy teenagers and everything is offered to them at a lower price.