Discussion Post (Marriott Inc) Kim Wood

Marriott Inc

Johnathen Houston

MBA-560-X1656

Southern New Hampshire University

November 12, 2016

Marriott Inc

Marriott Inc is a multinational company that is widely diversified in hospitality in America and it deals with the management and the franchising of a wide range of hotels and other related lodging facilities. This company was founded in the year 1927 by J. Willard Marriot and Alice S. Currently, the company is being led by Marriott son referred to as J.W. Marriott, Jr. and he is the chairman of the board and the CEO while William J. Shaw is the president and also the chief operating officer in the organization. In this paper, I will look at the branding of new product in the company, its alignment with the vision and the mission statement, definition of the product and the service that is needed and lastly I will discuss the various pricing strategies that the company should adopt.

Section Two: Branding and Idea Context

Corporate mission and how the new product or service aligns with it

The corporate mission of Marriot Inc is to enhance the lives of all their customers through the creation of enabling them to enjoy unsurpassed vacation and leisure experiences. In this the company aims at ensuring that the customers are able to enjoy the best experience ever when they are out for the vacations as well as during leisure times. The new product that the company is offering is the vacation rentals. A vacation rental refers to the renting out of a house or an apartment that is fully furnished or a resort condominium that is professionally managed usually on a temporary basis in order to attract tourism where they use them as an alternative to hotels. The vacation rental offered by the company will range from the lavish apartments to private villas that are expensive as a result of their strategic location all over the world. Some of them will have price tags that are charging high cost with luxurious facilities. On the other hand, others such as the apartments will be offering services that are similar to those of the hotels to their clients such as the maintenance on the 24 hours system and in housekeeping among others. This product aligns with the mission statement of the organization in that the company will be in a position to offer adequate housing to clients who will be going out for the vacation with their families and will thus have a high demand for the housing. This will help in the satisfaction of their clients because the parents will be in a position to go out for the vacation with their children where they can enjoy an extended stay of even up to one or several months comfortably.

Defining features of the product(s)/service(s)

The vacation rentals will be marketed both internally and externally. Internal marketing refers to a strategy whereby the employees in the organization are treated as the internal customers who must under all grounds be convinced of the vision of the company just as aggressively as the external customers. It is usually aimed at aligning all the aspects if a company internal activities to ensure that they have the capability of offering value to the customers. This is because, the more a company is able to coordinate and standardize its activities, and the more possible it is for it to offer a consistent experience to its customers (Drury, 2008). The notion in this kind of the marketing is that the attitudes that the customer has about a company is usually based on the experience that they have with the company and its products. Marriott will ensure internal marketing is carried out by encouraging the employees to ensure that they forge a good relationship with the customers so that they can interact effectively. This will greatly aid in ensuring that the satisfaction among the customers is achieved. In addition to this, the company will ensure that the services offered in the vacation rentals are excellent to suit the needs of the customers.

External marketing will also be used by the Marriott in the marketing of its new product. External marketing refers to the kind of marketing that is seen or perceived by the target customers and the whole world at large. It involves things such as advertising, posting on the blogs, websites, marketing through the social media, use of the direct marketing, use of the marketing materials such as the logo and the letter head and also the use of the product development. Marriott will mostly use of the blogs, the social media marketing, websites, marketing materials and the advertising in order to market its products. This will be very effective in that it will aid in the reaching of the customers who are in the different phases of the globe.

Marriott International faces a high competition from its competitors in the market such as Hilton and Starwood. One of the ways in which the company differentiates itself from the competitors in the market is through its core values and principles. The company has a list of well chosen core values and principles which it ensures that it does well in them. In this, the company always put the needs of the customers first. This means getting involved in all that which it takes to ensure that they have the best out of their vacation and the leisure times. The company offers a wide range of packages which makes it possible to meet the needs of all clients who needs their services.

The other way in which the company differentiates itself from the competitors in the market is through adding value. These days, most of the clients in the hotel industry are looking for the places where they will feel that they are fully satisfied and that the services that are offered to them are of high quality proportional to the costs that they are incurring. To ensure that Marriott is able to win the heart of the clients so that their loyalty can grow, the company ensures that it adds value to the clients by offering incentives such as free breakfast on certain days, offers on their prices and also the special money-back guarantee among others. In the creation of the incentives, the company usually first valuate the customers need so that the special incentive created can motivate them and make them feel appreciated.

The last way in which the company is differentiating itself from the competitors in the market is by being convenient. Gone are the days when the customers when the customers were willing to travel from one hotel to another looking if there is any accommodation available. Nowadays, the clients want and they always expect convenience (Barnett, 2014). In this Marriott have the website where the customers can check for the availability of the space so that they can book their vacation rentals prior. In the websites, the clients are able to fill in their check in and checkouts dates and also see the amount of money that they will be charged for the stay. This enables them to prepare themselves adequately. In addition to this, through the company’s website, the clients are also able to get up to date information regarding to the company.

Alignment of the prices of the products and the services offered by company with the market position and its corporate mission is very imperative. One of the things that Marriott needs to do to align the prices with the corporate mission and the market position is to reflect the value its product is providing versus the value offered by the competitors. Others that the company can do include; matching what the market will pay for the offering, supporting its brand, maximizing its profits and also ensure that it is able to reach its revenue and the market share goals. Through these strategies, the company will be in a position to deliver services and products that are of a high quality at an affordable price.

Section Three: Defining Product or Service Need

The behavioral as well as the demographic lifestyles of the consumers in an economy varies across the different groups. The differences results from the varying preferences in relation to the consumers demographic characteristics such as their level of income and their age. The behavioral as well as the lifestyle demographics data of a certain area plays a very imperative role in giving a starting point for carrying out a detailed analysis concerning the target consumers in an area. The targeted consumers of the Marriott Inc in this product are the families in the middle and the elite class in the society. This is because, these are the people in the society who are able to afford the luxuries that are associated with the travelling vacations and also the leisure times. The people targeted here are the young families who are having children who the parents want to make sure that they have a close proximity to them when they are out for the vacations just like they are at home. These targeted customers are the best choice because they have the resources that are necessary to make the travelling and they are also at the age where people love having more fun.

The vacation rentals serve as an alternative for the hotels. The unsatisfied need that is fulfilled by the vacation rentals is the privacy. With the vacation rentals unlike the hotels, the clients are usually booked on a weekly basis and the ranges from the most expensive ones to the ones which have similar services as those of the hotels. The customers of the Marriott International usually seek the information that is required to fill their need through the website of the company. In this, the company has made it convenient for the customers to check for the availability of the rooms over the internet on its websites. They are thus able to fill in their check in and the check out dates so that they can view the prices that the company is charging for the vacation rentals. In addition to this, they are also able to making bookings on the ones that they feel will meet their needs.

One of the buying situations in Marriott is where the buyers will be purchasing the product for the first time. In this case, the buyers do not have the experience of the products and the associated services that are offered by the company and thus extensive efforts are required for the buyer to make the decision of buying the product. The other buying situation is the modified rebuy and it refers to the situation whereby the buyer is willing to modify the specifications of the products, the prices and the terms. This gives the customers involved the chance to try a new thing as the suppliers make changes so that the customer can enjoy a new experience and a new preference.

Section Six: Pricing

Explain the fixed and variable costs and how these fit with the company’s short- and long-term goals. Use a narrative with a table to show calculations for cost categories. Provide reasonable estimates for each of the categories. Specific or in-depth financial analysis is not

Fixed costs refer to the expenses that are incurred by the company but they do not change when there is either an increase or a decrease in the amount of the goods that are produced or sold. The company has to pay these costs independent of the business activity. On the other hand variable costs refer to the costs that are incurred by the company and vary with the level of output produced. The variable costs increases when the level of production rises and they decrease with the fall in the level of production (Harris, 2014). The fixed and variable costs fit with the goals of the company in the short term and the long term in that the costs in the short run are usually accumulated in the production process. The fixed costs do not have an impact on the short run costs and the production in the short run is only affected by the variable costs and the revenue. The variable costs have the capability of changing the level of the output. Examples of the fixed costs are insurance, rent, depreciation of assets, advertising and utility expenses while on the other hand an example of the variable costs are the direct labor costs.

Fixed Costs	Variable Costs
Fixed costs are calculated using the formula FC+VC(Q)= TC. FC is the fixed costs, VC is the variable costs, Q is the quantity and TC is the total costs.	Total variable costs= Total Quantity of the output* variable cost per unit of output VC= Q*TC
For example assume that Q is $4,000 and cost per unit of the output is $ 100. The FC of the organization will be 100/($400000*$4000) = 4*10-6	.The total variable costs of the company will be $4000*$100 = $400,000

Examine competitors’ pricing and explain reasoning for differences

One of the pricing strategies that is used by the competitors is the premium pricing. One of the reasons when they may makes use of this pricing strategy is when they are having a unique feature about their product or when they introduce new products in the market and they are experiencing a distinctive competitive advantage. In this strategy the prices offered by the companies are higher than that of the competitors. The other pricing strategy that is used by the competitors of Marriott is the psychological pricing. This is used by the competitor companies in the establishing of the prices for their companies where they ensure the exhibition of a minor distinction which makes the pricing difference.

Estimate how much you think the target market is willing to pay for your product/service. Is this due to preferences for social responsibility, ethical behavior, or other intangibles?

I think that the target customers are willing to a great extent to pay for the product and the services that are offered. The price that I think they are willing to pay is $210 per night. One of the reasons why they are willing to pay this amount for the product is due to the good reviews that they have seen of the sites regarding the services and the products that the company offers. Most of the travelers are usually in fear of being conned and getting in an instance where they lose all their all to the strangers who they do not know in the booking of their rooms. Due to the positive reviews on the company’s website, it has been able to gain trust from the members of the public. The other reason why the target customers are willing to pay the estimated price is because of the company’s corporate social responsibility. This company is known for working hand in hand with the communities in which it is operating in for the welfare of the community concerned. This makes it possible for the company to gain a wide recognition from the members of the public who passes the message to the others positively.

What pricing strategy (skimming, penetration, economy, or premium) is most appropriate and why?

The pricing strategy that I feel is the most appropriate for Marriott International is the penetration pricing. This refers to a strategy that captures the market share by entering in the market at a low price that is relative to the competition so that it can attract a wide scope of the buyers. This strategy is effective in that it makes it easy for the organization concerned to raise the level of awareness and get people to try and take advantage of the product (Schindler, 2012).

References

Barnett, N. (2014). 7 Business Habits That Drive High Performance. Cork: BookBaby.

Drury, C. (2008). Management and cost accounting. London: South-Western.

Harris, C. (2014). Fixed and variable costs : theory and practice in electricity. New York City: Palgrave Macmillan.

Schindler, R. (2012). Pricing strategies : a marketing approach. Thousand Oaks, Calif: Sage Publications, Inc.