Burj Al Arab Hotel Marketing Analysis

Topic: Marketing Words: 2905 Pages: 11

Table of Contents

Introduction
Selection of the Business
Explanation of the Choice
Micro Environment
Analysis of Burj Al Arab Marketing Strategies
Future Critical Success Factors
Conclusion
References

Burj Al Arab Marketing Strategies: Introduction

Today, it is crucial to take into account the complexity of the market if a business is to be successful. To do that, it is recommended to use the various tools provided by marketing; the latter can be defined as “the management process responsible for identifying, anticipating and satisfying customer requirements profitably” (Chartered Institute of Marketing 2015, p. 3). In this paper, marketing analysis of a successful, worldwide-known organisation will be carried out.

Selection of the Business – Burj Al Arab Occupancy Rate

Burj Al Arab is one of the world’s most famous hotels; it can be characterised as having a strong brand, superior performance, and international recognition. This establishment will be analysed from the point of view of marketing. The marketing concepts favoured by the hotel, its marketing environment, and the “marketing mix” of Burj Al Arab will be scrutinised.

Burj Al Arab Revenue and Explanation of the Choice

The construction of Burj Al Arab was started in 1994 and completed in 1999. From the very beginning, the hotel was designed to become a symbol of Dubai, approximately in the same manner as e.g. the Sydney Opera House is the symbol of Sydney (Megastructures 2007). It is possible to state that the designers were successful in their plans; today, the sail-shaped structure is famous worldwide and is an easily recognisable landmark of Dubai. The services and accommodation that the hotel provides are of the premium quality only, and a large part of the hotel’s rooms usually remain busy all the time.

Although we were unable to find the exact financial reports of the hotel’s performance online, and there are some rumours that the hotel’s maintenance costs tremendous amounts of money, the Jumeirah Group, the organisation that operates Burj Al Arab, has been reporting an overall increase in its total revenues (Burj Al Arab Dubai hotelier 2013; Jumeirah Group reflects on a stellar 2013 2014), which can lead to the conclusion that the hotel is at least not crucially unprofitable. In fact, it is stated that the hotel is “a success”, and that the investors are pleased (Napier 2007), which is, together with the establishment’s worldwide fame, became a reason for us to choose Burj Al Arab for our analysis.

Prominent Marketing Concepts

According to Kotler and Armstrong (2010, p. 33-35), to design strategies that would enable companies to create profitable relationships with their consumers, these companies may use five main marketing concepts that would represent the organisation’s priorities regarding the interests of the clients, the society, and the organisation itself. These concepts are: “the production, product, selling, marketing, and societal marketing concepts” (Kotler & Armstrong 2010, p. 33). Arguably, the hotel of Burj Al Arab favours the product concept, according to which customers will prefer those products that provide the highest quality, the best performance, and will possess numerous innovative features; and the marketing concept, according to which, to attract consumers, it is needed to find which products they favour, and attract them by offering the right products especially for the target customers.

Let us start with the marketing concept. The hotel was designed to become one of the best luxurious hotels in the world, and the establishment was even named “the world’s only seven-star hotel”; its guests arrive at the hotel by Rolls-Royce or a helicopter, are provided with 42-inch plasma TVs, can choose one of 13 pillows to sleep on in their bed, etc. (The Economist 2008). The hotel was built on an artificial island approximately 300 m away from the Jumeirah beach to provide the guests with the breathtaking view of the sea.

At the same time, while discussing the tastes of the contemporary rich, The Economist (2015) emphasises that, whereas in the past the affluent would buy expensive and innovative things such as various gadgets, today they prefer to “spend more on things to do and see”. So, the wealthy are willing to pay from $1,000 to nearly $25,000 per night per suite (The Economist, 2015), but they wish to have an unforgettable experience. Therefore, the hotel, with its rich interiors, luxury services, and breathtaking views, was designed so as to best satisfy the tastes of the pickiest customers who, however, are willing to pay tremendous amounts of money in order to have a luxurious stay.

Arguably, Burj Al Arab also favours the product concept. The hotel strives to provide its guests with the best service possible. The establishment endeavours to satisfy the wishes of even the most whimsy clients, e.g. by presenting them with custom-made 24-carat gold iPads (The Economist 2013; Paris 2013), so they could fully enjoy the offered Wi-Fi service. Delicious food from the best chefs, state-of-the-art technology, the most comfortable conditions for a stay, etc., clearly demonstrates that Burj Al Arab wishes to provide their clients with products whose features are the highest quality and the best performance available.

Simultaneously, the hotel does not employ the selling concept; despite high-quality advertising (Dubai’s Burj Al Arab wins global award 2014), the establishment does not attempt to sell goods or services which are not usually sought by consumers (which is characteristic of the selling concept), instead targeting a particular market interested in its services. The production concept, aimed at mass-production and mass-consumption, is clearly not employed; neither is the societal marketing concept, for it is rather unlikely that using tremendous amounts of resources to provide a small number of people with luxury goods and services improves the society’s well-being (Kotler & Armstrong 2010, p. 33-35).

Burj Al Arab Target Market and Analysis of Environment

Macro Environment

One of the tools to analyse a company’s marketing macro-environment is the PEST (political, economic, social, technological) tool (The macro-environment & PEST analysis n.d.). Let us analyse Burj Al Arab with this tool.

Political Environment

The hotel has always been favoured by the political leaders of the country; Sheikh Mohammed bin Rashid Al Maktoum was impressed when he studied Tom Wright’s, the hotel’s architect, a sketch of the building. The hotel was also supported by the political leaders as a means to diversify the country’s economy, which created a favourable climate for the enterprise’s emergence and development (Megastructures 2007).

Economic Environment

The UAE, Dubai in particular, is an affluent country with a favourable economic climate. However, the hotel has a specific target market that comprises some of the richest people in the world; in addition, these individuals come to stay at the hotel from around the entire planet. Therefore, it is possible to state that, other than being sufficiently stable so as to provide the enterprise with all the necessary supplies, the local economic situation does not play a very significant role in the successfulness of the hotel today, even though it was crucial for its construction to begin.

Social Environment

Today, “organisations must be able to offer products and services that aim to complement and benefit people’s lifestyle and behaviour,” and respond to the changes in the society (The macro-environment & PEST analysis n.d.). Burj Al Arab is aimed at affluent people from all over the world. The tastes of this population have been changing; the clients have increasing demands regarding the quality of the service, so the hotel attempts to adapt to these demands and offer only the best service (The Economist 2015).

Technological Environment

The hotel makes a significant effort to adapt to the technological environment and not to fall behind its competitors. Burj Al Arab provides its customers with high-quality online booking; the services and facilities are based on the state-of-the-art technological achievements, and the customers may be transported to the hotel by helicopters (Burj Al Arab Jumeirah n.d.; “Excellent service”: a review of Burj Al Arab Jumeirah 2012; Napier 2007). Therefore, the establishment does its best to keep up with the technological environment.

Burj Al Arab Target Market: Micro Environment

The microenvironment can be analysed by examining the company’s customers, employees, suppliers, shareholders, competitors, and representation in the media (Microenvironment n.d.).

Customers

The customers of Burj Al Arab are the wealthy from all over the world (The Economist 2015). The hotel strives to satisfy their “wants and needs” (Microenvironment n.d.) by providing luxurious offers such as golden iPads (The Economist 2015) and by supplying service of supreme quality (Napier 2007).

Employees

The hotel devotes much attention to its employees, not only hiring large numbers of workers but also providing them with training and other development opportunities (Private butler service n.d.).

Suppliers

Burj Al Arab works only with the best and most reliable suppliers available. For instance, it orders uniforms for its employees from Blueberries Uniforms, a prominent firm based in Dubai (Clientele n.d.), and it purchases seafood from Matthew Stevens, a famous Cornish fresh fish wholesaler (Matthew Stevens n.d., Suppliers n.d.).

Shareholders

Apparently, there is no concrete information about the hotel’s shareholders available to the public, but it is known that the hotel is operated by the Jumeirah Group, an international luxury hotel chain (Jumeirah Group reflects on a stellar 2013 2014). The investors of the hotel are happy with its profits (Napier 2007); it is unlikely that they put much pressure on the enterprise.

Competitors

The main competitor of Burj Al Arab in the region is Emirates Palace Hotel (Abu Dhabi); other rivals include One & Only Royal Mirage and Jumeirah Zabeel Saray (Dubai). Even though the competition is rather stiff, Burj Al Arab is doing well due to a number of advantages such as the hotel’s location on the artificial island, panoramic suites, and other unique facilities and services.

Media

The hotel has a very positive image in the media; for instance, it is known as “the world’s only seven-star hotel” (The Economist 2008). Burj Al Arab also won a number of awards for its advertisements, for instance, in the social media (Dubai’s Burj Al Arab wins global award 2014). Undoubtedly, this helped the enterprise build its reputation and now assists in retaining it, which provides the hotel with additional clients.

Analysis of Burj Al Arab Marketing Strategies

The marketing mix model is considered one of the top three classical marketing models to analyse the marketing strategy of an organisation (Hanlon 2014). It originally consisted of four Ps – Product, Price, Place, and Promotion, but later three other Ps, namely People, Processes, and Physical evidence, were added (Chartered Institute of Marketing 2015, p. 5). Let us employ the 7Ps tool to analyse Burj Al Arab.

Product

The product offered by Burj Al Arab is of the premium quality (Napier 2007). The hotel provides its guests with the best place to stay available. The establishment is used as a place to have breathtaking experiences rather than mere accommodation. The location of the hotel was also chosen with this aim; being built on an artificial island, Burj Al Arab allows its guests to view the sea right under their windows.

Price

The hotel is one of the most expensive establishments of this type in the world; e.g., its Royal Suite was the eighth most expensive suite in the world in 2009 (see Appendix 1). The hotel is aimed at the wealthy clientele. Unsurprisingly, the customers of Burj Al Arab expect to get only the service of the highest quality and to obtain the best value for their money. And, judging from reviews, they are satisfied with what they get (“Excellent service”: a review of Burj Al Arab Jumeirah 2012; Napier 2007).

Place

Dubai is considered to be a business destination rather than a tourist one, which might negatively affect the number of customers arriving at Burj Al Arab. Also, Dubai’s economy is more centred on oil and gas rather than on tourism, which also does not provide a good climate for the members of the hospitality industry. Still, the rates of hotel occupancy in Dubai and the amount of revenue have been steadily growing as of late (see Appendix 2). Dubai’s being a business destination may attract additional clients to the hotel. Also, the fame of Burj Al Arab, the fact that it is known all over the world, makes the establishment itself an attraction; many guests would go to Dubai to simply stay in the hotel.

Promotion

Promotion includes “branding, advertising, corporate identity, social media outreach”, etc. (Chartered Institute of Marketing 2015, p. 7). Burj Al Arab pays much attention to promotion; when the building of the hotel was designed, it was to become the symbol of Dubai in a similar way to how e.g. the Eiffel Tower is the symbol of Paris (this offer also impressed Sheikh Mohammed bin Rashid Al Maktoum) (Megastructures 2007). It was already noted that the hotel won an award for the best advertising in the social media (Dubai’s Burj Al Arab wins global award 2014) and that it is indeed known worldwide as “the world’s only seven-star hotel” (The Economist 2008).

People

Burj Al Arab pays much attention to its employees, who always strive to leave a good impression on the guests. The service in the hotel is reportedly excellent (“Excellent service”: a review of Burj Al Arab Jumeirah 2012). The numbers of the staff in the hotel are also noteworthy; the establishment has the staff-to-suite ratio 8:1; and that nearly 1,600 people are employed in Burj Al Arab (Private butler service n.d.).

Process

The hotel strives to make all the contacts of the customers with the establishment simple and convenient; customers are served well at every step of their interaction with the hotel. Burj Al Arab supplies its guests with simple and efficient online booking, comfortable transportation services, and convenient continuous service.

Physical evidence

Burj Al Arab provides reliable physical evidence of the quality of their service. The website is beautiful and informative; it offers much information about the facilities that are available for the hotel’s guests. Photographs of both the interior and the exterior of the establishment are supplied; the customers can view information about the various services offered in Burj Al Arab, for instance, about all the nine world-class restaurants in the hotel, or about the activities visitors might wish to take part in during their stay (Burj Al Arab Jumeirah n.d.). The hotel also takes great care of its reputation; former clients highly recommend the establishment (“Excellent service”: a review of Burj Al Arab Jumeirah 2012; Napier 2007).

Summary

The hotel has paid much attention to virtually all of the seven Ps of the marketing model, which ensured the long-term success of the enterprise. Unfortunately, the Place might not be the best for the hotel business, but the revenues and occupancy rate of Dubai’s hotels have been growing over the last years, which means that the unfavourableness of the location has been decreasing (see Appendix 2). At the same time, the hotel was built, among other aims, in order to diversify the country’s oil and gas economy, itself becoming a factor that enhances the favourableness of the place (Megastructures 2007).

Future Critical Success Factors (CSFs)

Over the last years, the rich have been changing their preferences when it comes to travelling and spending their free time; the wealthy demand the highest-quality service and wish to gain new experiences that can be remembered for a long while (The Economist 2015). Therefore, perhaps the most important of the factors that will affect the hotel’s success in the future is the product they offer; Burj Al Arab will have to supply its guests with the opportunity to have unforgettable experiences while staying in the hotel. At the same time, the people and processes are also of the essence, for the clients wish to be provided with the best service for their money. Also, Burj Al Arab has a number of well-known rivals, such as Hyatt Regency Dubai or Le Méridien Mina Seyahi, so it must keep its services at the top quality.

The rest of the factors that are included in the marketing mix appear to be of lesser significance; e.g., the price should not be considered crucial due to the fact that for the affluent “target audience” that is willing to spend $25,000 per night an increase in the price should not be that significant. Physical evidence and promotion play their role; for instance, the hotel’s famed reputation allows it to compete against its rivals in the market. Simultaneously, these two factors are not the most crucial reasons for the hotel’s success; the clients must be fully informed of the services the establishment offers, but it is unlikely that they can be persuaded to buy them by a mere advertisement that is not supported by the actual quality of service.

Burj Al Arab Hotel Marketing: Conclusion

To sum up, it should be stressed that Burj Al Arab has achieved fame, and is today known worldwide; it might be called an easily recognisable symbol of Dubai, as it was originally intended. The enterprise prefers the product and the market concept in its activity, providing high-quality services to the selected group of consumers. The marketing environment has been favourable for the hotel, which helped it to emerge and develop into one of the best establishments of this type in the world. As for the marketing mix, the hotel has paid much attention to almost all the seven Ps of the model; even though Place might not have been initially favourable, the situation is improving nowadays. Finally, the future CSF for the hotel is mainly the quality of service that the enterprise provides for its customers.