Based on the brief summation of the first assignment, this report intends to take a critical look at how the Roswell Group can effectively manage to open shop within India and successfully become a key operator within the Indian Hospitality industry. India is becoming an interesting and attractive business destination especially due to the business stability together with its impressive economic performance; the vast population presents a potential market moreover, the cheap labor which is an incentive for most foreign business organizations (Kannan 2005).
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Additionally, India has a well-developed transport and telecommunication network which makes it good for tourism and the hotel industry in particular. Despite the country being attractive there exists’ a high degree of corruption that discourages foreign investors (Cho 2009). The Roswell Group intends to enter into the Indian Market through Foreign Direct Investment; this way, the organization will be able to monitor all business prospects closely (Wheelen & Hunger 2002).
Additionally, this report will take a look at how the organization intends to use various business/marketing strategies to exploit the various strengths and opportunities and at the same time compete among similar competitors while minimizing on threats and weaknesses that the organization faces in its pursuit for success within the Indian Market. This is because according to Kotler & Keller (2011) who is a renowned marketing Guru, business organizations are more likely to succeed if they only pay much attention to planning especially when they operate within a multinational and global format. And therefore the purpose of this document is to explore the various Marketing strategies that The Roswell Group will use within the Indian market (Charles et al 2002).
The global business environment is highly dynamic and ever-changing hence organizations must look for the most suitable strategies to successfully realize their objectives and goals. According to Porter (2004), the product life cycle stages (i.e. introduction, growth, maturity, and decline) play a major role in deciding what path a business follows especially while entering new territories. The decision to remain local or go transnational is not a simple one as it comes with its challenges and therefore before it arrives at any decisions concerning the various functional areas of business; the final decisions are usually achieved through consistent coordination and continuous communication between the various stakeholders involved.
The rise of a global economy has made borders obsolete and hence investors can move from country to county in search of investment opportunities that guarantee them higher returns (Trott 2008). But success within the global arena comes only to those organizations which have good management and better marketing strategies. As a result, it becomes essential for business executives and entrepreneurs who make decisions on behalf of organizations when conducting business on a global scale to critically analyze and appraise the whole situation before the company is to make any move concerning entry of business into foreign territory.
If a business organization chooses a wrong mode of entry then it is likely to be met with hostility and the eventual failure of its business objectives. This fact, therefore, makes the process of planning and strategizing take center stage in most cases to dip the level of risks companies normally face especially when entering new territory. Companies during this phase may decide to choose the best mode of entry to enter a country to cut on costs, quickly pick up business, maximizing efficiency, and aiming to make profits (Campbell, Stonehouse and Huston 2002).
The aims of this report are:
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- To provide brief background information about The Roswell group and the Posh Hotel Chains.
- To make recommendations for entry mode with justifications.
- To conduct SWOT Analyses.
- To conduct competitor analyses.
- To identify the company’s marketing objectives.
- To demonstrate Generic marketing strategies, market segmentation and positioning that are to be used by the Posh Hotel as it enters the Indian Market.
- To look at the various Marketing mix strategies that are to be used in India.
Background of the company
Posh Hotels is a worldwide hospitality company that provides high-class services and it belongs to the Roswell Group, a private investment company which is owned by Jack Roswell. The organization has been in existence for over 53 years considering it started in the late 1950s with its headquarters located in Melbourne, Australia. The Roswell family takes part in running the company and in making major decisions that affect it. The company currently has numerous hotels under its belt with most of them being located in prime areas all over the world.
Currently, Posh Hotel is a line of prestigious hotels that includes close to 347 hotels which have more than 72,000 rooms in 36 countries. Posh Hotels are spread all over the world with branches located in Melbourne, New York, Rio de Janeiro, Johannesburg, Paris, Arizona, Frankfurt, Seoul, Daegu, Osaka, Dubai, Nairobi, Sicily, and Beijing, among other cities. The hotel offers customized accommodation services for both tourists, businessmen in its areas of operation. The Hotel’s services are considered 5-star hotels which are very prestigious and therefore the hotel is graced with the best equipment, staff and highly decorated rooms which are part of the complete customer experience (Camillus, 1986).
The Posh Hotels over the years has gained a lot of experience and has consequently become one of the respected members of the player in the hospitality industry. The Roswell group and its Hotels are a respected brand especially in its mother country Australia and this has therefore led to many investors within the region to begin entering into the franchisor-franchisee relationship with the Hotel. Due to this fact, the organization’s management believed that their growth within the Australian market had reached its peak and therefore the organization decided to go global/ multinational in the 1980s. This fact has, therefore, prompted the Roswell group to expand its business operations and enter into the Indian market (Kefela 2010).
Mode of Entry and its Justification
The best mode of entry for the Roswell Group as far as the Posh Hotel is concerned is foreign direct investment (FDI). FDI is a mode of entry which plays a significant role in the global field of business, it enables business organizations like Roswell group and its Posh lines of Hotels to easily access foreign markets, marketing channels, lower production costs on facilities, access technology, labor force and financing making it easier for business activities to be carried out (Wheelen & Hunger 2002). According to Czinkota et al (2008), “the global imperative is upon us!
No longer merely an inspiring exhortation, thinking and acting globally is the key principle for business success. Both the willing and the unwilling are becoming particip[ants in global business affairs.” On the other hand, host countries get the chance to receive the investment, which in turn assists in the growth of the economy and creation of jobs. Moreover, host nations such as India, in this case, can more easily get their hands on new technologies, processes, products, technology and management skills, which in turn provide a strong momentum to economic development (Chung 2008).
Through FDI, a company from one country can make a physical investment like building a factory in another country thereby investing in infrastructure such as machinery and technology. Unlike a joint venture and licensing agreements, FDI’s enable The Roswell Group to closely monitor and control aspects of their business operation as far as the Posh Hotels are concerned and thereby increasing the likelihood of success. Since the Indian market has over 1 billion people and is a hot tourist destination, this justifies the need for the Roswell Group to invest a lot of capital directly in the Indian market expecting high returns (Koontz & Weihrich 2009).
According to the classical trade theory, the extent to which a country exports and imports correlates to its trading patterns with other countries, thus countries can gain if each commits considerable capital to the generation of goods and services in which they have an economic advantage, consumption locally and then exports the surplus. Roswell Group seeks to gain the economic advantages that arise from the Indian market such as diversity of the hospitality industry, labor, and entrepreneurship. The basis for FDI can be attributed to differences in production traits and market patterns, which are based on indigenous differences in innate and gained economic advantages (Chung 2008).
SWOT is an important diagnostic technique that is used by business managers to analyze and evaluate the strengths, weaknesses, opportunities, and threats of both the internal environment of the organization together with the external environment which poses threats and opportunities that an organization faces (Kotlern1999). The following is the SWOT analysis of the company:
- The Posh Hotel chains boast of a High-quality product and service offering.
- The organization has a good reputation in Australia with almost 30% of all hotels being a franchisee of the group.
- The Roswell Group is financially stable.
- The hotel has been operating for 50 years, therefore, having Long term commitment to its business activities.
- High skilled staff with experience in the Hospitality industry (Kannan 2005).
High levels of corruption within India hinder objective business activities.
- The growing tourist traffic within India makes future business prospects much more lucrative (Lim 2009).
- The Indian government supports foreign investors, encourages the management of the hotels to pursue their business objectives.
- The high-end Hospitality industry market is demanding for premium services.
- Competition from local Indian Hotels.
- Competition from international Hotels which are in the Indian hospitality industry (Lim 2009).
The Indian market is very large and thus this strength makes the market a quite attractive one (Kannan 2005). If the management can understand these strengths and weaknesses then the right strategies will be formulated and this will go a long way towards ensuring the company’s success in the Indian market (Kotler 1999).
According to Porter (2004), there are five forces of competitive position: Existing competitive rivalry between suppliers; Threat of new market entrants; bargaining power of buyers; Power of suppliers; and Threat of substitute products.
Presently, the Indian hotel industry rakes in over $ 17 billion annually and thus, the competition amongst hotels is very stiff with international participants such as the Hilton, The Grand Hyatt, Sun and Sand Hotel and other local hotels such as the Taj Mahal Palace Hotel, Le Royal Meridian, Trident Hotel, Holiday Inn Juhu Beach and Oberoi (India Hospitality News 2011). In the year 2009, India hosted close to 5.1 million tourists and the continued growth in numbers is making business quite attractive and lucrative for the Hospitality industry (Kannan 2005). But despite the growth in demand for hotel services, there is a lot of competition and rivalry among the current industry participants who are fighting to dominate the industry and make most profits (Lancaster & Withey 2006).
Company and Marketing Objectives
The vision of the Roswell Group Posh Hotels is to be the best globally in the hospitality industry. The company aims to outshine its competitors and take a substantial market share of the promising industry. However, to achieve its targets the business objectives of the Posh Hotel center will use its marketing objectives to ensure the growth of the company (Lancaster & Withey 2006).
The objective of the company is to provide its guests with the finest services/products possible. Rendering every service effortlessly and ensuring that its customers enjoy themselves to the fullest (Lugosi 2008).
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The firm’s aims:
- Fostering creativity and innovation in marketing by ensuring efficiency, along with quality and finally customer satisfaction which takes place every time a customer experiences their services (Charles et al 2002).
- Growing its customer base gradually within the first year by using various loyalty programs to encourage repeated customers, purchase of services and word of mouth promotion.
- Building and gradually developing its brand image within the Indian industry thus making the hotel a respected business establishment within the hospitality industry.
Generic Marketing Strategies, market segmentation, positioning
Positioning and Segmentation
Roswell’s Posh hotel Chain are high-end Hotels within the Hospitality industry and hence will position themselves as a brand which targets high-end consumers, who have the financial power to purchase high-end Hotel products and services. These services usually cost highly and therefore the elite members of the society will be able to afford the company’s services in India. Because the company targets high-end customers and elite members of the society together with tourists, the Hotel will position itself as a high-end brand associated with elegance.
Generic Marketing Strategies
Generic marketing strategies enable business managers to choose the scope of the market that they intend to serve and the degree of product differentiation. The Roswell group is a high-class brand and so is their posh brand of hotels (Kotler & Keller 2011). The hotel operates on a narrow scope offering a highly differentiated product/service offering. Differentiation focus will allow the company to sell premium products/services to a particular niche market.
Marketing Mix Strategies
Since the Roswell group will pursue a highly differentiated product and service strategy targeting high-end customers, the Posh hotels will, therefore, customize hotel and room service by having highly skilled personnel dressed in attractive uniforms respond to clients (Trott 2008; Camillus1986). To standardize service delivery, all staff will be regularly trained and will have a strict guideline to follow especially when interacting with customers.
Additionally, the Hotel rooms will be designed to have a new generation elegant look with the entire design filled with foreign fabrics from all over the world. In this case, if a customer demands a room that represents Arabic, Chinese, Indian, African, Eastern or Western European culture then it will be made available to them ( Lim 2009). Moreover, the hotel will have the latest facilities in terms of technology and upgraded gyms that will make it easier for customers to have the complete customer experience for their target market.
The main aim of marketing communication is to inform, remind, or persuade and therefore the aim of the Roswell group is to ensure that their intended message concerning the Posh Hotel reaches the intended target market (Lancaster & Withey 2006). A good message/marketing communication strategy will enable the Hotel to gain a competitive advantage and benefit the consumer at the same time. The messages will communicate about the positioning of the hotels, their elegant rooms and services, their experienced staff and even testimonials from loyal customers (Kotler 2003). The message will be communicated through various communication channels such as accredited tourist magazines, brochures placed at various tourist destinations, the television and mainly the web (Campbell, Stonehouse, & Huston, 2002).
A marketing plan is an integral part of business, failing to plan is planning to fail. This report has indicated how the Roswell Group intends to successfully enter the Indian Market through foreign direct investment and use its SWOT and competitors analysis to carefully plan its marketing and other business strategies for the organization to become a successful participant within the Indian Hospitality industry by offering highly differentiated premium service/product offering to its customers. Also, the hospitality industry exists in a volatile industry that calls for consumer needs and desires to be taken seriously thus the need for marketing planning.
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