What methods are available to the Four Seasons Essay Example

What methods are available to the Four Seasons Essay Example What methods are available to the Four Seasons Essay What methods are available to the Four Seasons Essay This posh consumer looks toward the Four Seasons, which has a relatively positive brand image in its marketplace, for providing superior accommodations at the aesthetic level and also as far as how the brand links image with the self-concept of traveling consumers. The Four Seasons does not currently utilize any form of loyalty programmer, with the brand considering points-based programmer as decrease and unimportant to the hotels money-is-no-object clientele Monsoons, 2005; Bentley, 2005). In the past, this type of belief has driven a very solid profit model as consumers return to enjoy the modern and upscale accommodations offered by this pricey, yet consumer-focused hotel chain. However, the problem in this situation is that todays consumer, even the shifting trend in this demographic target group where value and cost savings are coming acceptable and common beliefs, in a variety of different product and service varieties. This shifting trend maintains the ability to erode customer loyalty from the Four Seasons if the business is not able to project a sense of value to even the more upscale consumer. Failure to adopt a loyalty programmer could spell financial problems for the hotel chain as consumers respond, in a difficult economy, with changing social values which lead to less loyalty toward a specific brand. Therefore, the problem with Four Seasons is a leadership focus on traditional marketing objectives which are likely not as effective for todays value-focused nonuser in building loyalty. II. Background The achievement of brand loyalty, in the hospitality industry, especially noticeable in the hotel industry, is what drives the highest marketing return on investment (Rica, 2009). Brand loyalty can best be defined as the achievement of such a powerful consumer sentiment about the products brand or service elements that they begin to demand this particular brand over all other competitors in their similar marketplace. Brand loyalty, by this definition, is not likely to be achieved without significant investment into marketing promotion with concentrated advertising. Loyalty marketing is a strategy, not a tactic (Humbly, Hunt and Phillips, 2004, p. 1 2). Today, it appears competition are using loyalty schemes with various points accumulation for incentive-based marketing (Thornton, 2006). According to Shogun (2005), current loyalty programs appear to be unrelated to the creation of brand loyalty. Long gone are the days of the one-size-fits all loyalty program (Vantage, 2008, p. 4). This should give opportunity for todays hotel industries to actively reexamine existing loyalty programs to consider whether it is bringing positive ROI to their marketing investment into these programs. It is important for the hospitality industry to understand that the best return on promotional investment is to achieve this brand loyalty, therefore it becomes paramount to recognize how best to achieve this loyalty through contemporary marketing which fits the consumers lifestyle and needs profiles. There seems to be a fundamental shift in what drives brand loyalty in todays hospitality industry, where consumers are not as driven by visual images and logo presentation but are requesting aspects of service quality and reward in order to offer their loyalty to any particular brand. As illustrated by Figure 1, this industry is in a period of significant sales decline. Figure 1: Tourism Forecast to 2010 Sales in Billions Growth 2009 Growth 2010 Travel and Leisure 41 . 335 -11. 3 -4. 9 Source: Techno. Com (2009). Customer loyalty is driven by consumer sentiment toward the brand. In some instances, a longer-lived brand could have been a part of negative publicity or a scandalous scenario during its life cycle which damaged its brand reputation in its target client audience. In reverse, the brand could have achieved high volume of positive public relations or had satisfied many consumers and achieved a quality tutus amongst competitors. It would seem logical to assume that in order to achieve brand loyalty, the brand must have a quality reputation in its competitive, consumer- driven marketplaces. With this noticeable shift in consumer behavior and their responses to marketing promotion, and the need for loyalty to exist in order to provide ROI on marketing efforts, it becomes vital to understand what methods are available for the Four Seasons Hotel to ensure customer loyalty. That is what this study intended to uncover. The hospitality industry, in most developed, consumer-driven regions, is a very nominative marketplace with the need for differentiation strategies, as part of marketing, to create a solid brand name which maintains characteristics unique from competition from the consumer perspective. There is little research information available regarding the achievement of brand loyalty both in difficult economic environments or during a period where consumer sentiment has apparently shifted radically in terms of their response to promotion. These are two noticeable contemporary trends in consumer behavior, therefore this study maintains the ability to provide the Four Seasons Hotel with quality insight into new consumer values and heir willingness to provide loyalty based on demands or personal needs. To discover: what methods are available to the Four Seasons Hotel to ensure customer loyalty. Since the Four Seasons does not currently utilize loyalty programmer to build better consumer interest in the brand, despite the evidence provided of its importance in this industry, it is important to understand what methods of loyalty-building would be beneficial for this hotel chain. Objectives 1 . Identify what drives todays customers to choose one hospitality industry over another in highly competitive hospitality markets. 2. Identify the current marketing activities of several hospitality-oriented companies (case studies) in which positive customer loyalty has been achieved in order to assist Four Seasons with developing a relevant model for loyalty-building. 3. Understand what the Four Seasons is currently performing in terms of marketing to build loyalty. IV. Research Design Qualitative analysis is the most logical data source for uncovering a trend in consumer values related to brand loyalty in the hospitality industry today. This type of analysis is interpretative in which personal knowledge in a variety of domains of duty is used as a Justification for analysis of various secondary source materials to uncover noticeable trends. Thus, this study consulted with recently published marketing- and hospitality-oriented Journals and other secondary source materials as the logical starting point for consumer trend analysis. Because the information required for analysis is needed from both the consumer and the industry standpoint, the development of a primary research study would be impractical due to time and budget restrictions. Primary research, in the form of consumer research studies, could have provided this study with valuable, real-time nonuser sentiment. However, secondary source analysis provided this study with valuable, rather surprising data which did not Justify the viewpoints of marketing professionals identified when this study was first proposed. Instead, the achievement of brand loyalty is driven by factors more closely related to lifestyle and through service-oriented efforts on behalf of the hospitality organization. This trend was more noticeable when looking at the situation from the industry perspective rather than the consumer perspective and by assessing the nature by which competitors in these resource analysis provided significant value to the fulfillment of the study objectives without the biases sometimes included in consumer sentiment surveys or questionnaires. Journals were selected from both domestic sources and international sources, as many hotels and restaurants operate in the global environment. Therefore, in order to gain the perspective of foreign consumers as well, the online environment was chosen as a logical medium for this study research methodology to locate Journals and other marketing publications for these consumers. Global hoteliers and saturates who operate in multi-national, multi-cultural environments, it was determined, might best benefit from this broadened consumer analysis. To ensure reliability, each of the secondary source materials consulted and utilized for this study was assessed for quality in relation to the publications reputation or the authors professional skill-set. No resources which presented opinionated or columnist-style viewpoints were deemed appropriate for this study and were rejected for their lack of reliability and credentials of authorship knowledge. There were no ethical issues involved with this study as it involved no primary search or use of human study participants. V. Data Presentation and Data Analysis 4. Background Due to todays difficult economic conditions which are occurring in many regions today, nearly two-thirds of consumers polled in a recent survey identified that reward points were either very important or extremely important when choosing a hospitality and travel brand (Wing, 2009). However, much to the industry dismay, only one-third of these same consumers actually belonged to a travel loyalty or rewards program (Wing). This shows a very strong disconnect between marketing effectiveness, the return on investment, as consumers have identified their importance but are not subscribing to these benefit programs. The Four Seasons, if choosing to adopt a new loyalty programmer, must be concerned with low subscriber ratios and work to promote the new programmer to build consumer interest. Though many travelers identify the importance of these loyalty- based concepts, low subscriber ratios could enhance the problem of implementing such a programmer at Four Seasons. This would have to be an immediate focus It seems, also, that women are the most logical target market when considering who s most able and willing to provide tourism dollars in this industry. Cavalier (2008) identifies that women make up 83 percent of all consumer purchases, thus to capture the woman buyer you have to understand the woman psyche and it has been discovered that trust is central to female loyalty (Cavalier, p. 1 7). Since women are likely the contributing force behind the decision to travel and frequent the hospitality industry, marketers should also focus on women when trying to create vacation promotions or lifestyle connections. Fortunately for the Four Seasons, the brand has built a positive reputation in its archetypal and there is a considerable amount of trust in the brand in relation to service provision and accommodations excellence. If implementing a new loyalty programmer to build higher sales volumes and increase loyalty, the company should direct the majority of its marketing toward the female customer as they will make most of the traveling decisions, even in the more upscale market audience. 4. The consumer profile The winners will be the brands that offer exceptional value and service, offers Betsy Resource, senior UP of marketing at Yamaha Worldwide, a hotel with over 7,000 units (Blitz, 2008, p. ). Value would seem to represent cost-savings from this viewpoint during an economic period where traveling consumers are not satisfying profit objectives. Travelers hate being nickel and dimmed to death for every service like Internet access, local calls, use of a business centre or gym (Blitz, p. 2). Brand loyalty can likely not be established when service-oriented charges are present based on this trend toward value orientation. The Four Seasons could benefit from this new value-focused consumer by promoting internal cost reductions on previously-charged-for services. Even though these efforts could undercut return on investment costs for items like Internet or telephone calls, the pricing used for a single nights stay is some of the highest in the hotel industry, thus these changes would likely represent a better focus on value provision, therefore enhancing loyalty in the process. These are small-scale steps to solve the problem which exists at the Four Seasons today, in terms of holding onto traditional marketing which might no longer generate the same loyalty in the mind of the value- focused traveler. Some restaurants in the hospitality industry have recently been using eat free loyalty orgasm where a specified amount of stay is required to earn free meals, when the hotel offers such amenities. However, two marketing experts identify that such efforts are counterproductive with the forms difficult to fill out for the foreign user Moons and Commodity, 2008, p. 268). Such eat free programs seem to have little to do with loyalty creation. An eat free loyalty programmer could appeal to the value-minded traveler without much cost to the business operational model. Offering these small-scale perks, by delivering them face-to-face to clients to express appreciation, could be the loyalty ump needed to satisfy new beliefs on total value with a nights stay at Four Seasons or any other competitor. Recent statistics illustrate that when consumers have a problem related to staff, they are 47 percent less likely to return to that hotel again (Barky and Nash, 2007, p. 4). This is a very high volume of people who can be affected by staff relationships, therefore internal issues should be considered as part of management focus for building brand loyalty. And, offers Mettles (2007), any negative issues should be handled quickly to repair damage to reputation. Barky and Nash (2006) further identify that people are influenced toward loyalty through value for price , the cleanliness of the room, the employees positive attitude, and friendliness of the concierge or front desk. These are relatively simple, fundamental consumer values which would likely be easy to coordinate for organizational structures designed for service focus. A comfy bed Just doesnt stand out anymore (Higgins, 2007, p. 42). Holiday Inn Hotels Resorts, a multi-demographic, multi-unit global hotel organization recognized this and developed a People Notice service program designed to each internal employees owe to be an everyday hero to guests to make them feel recognized and special (Higgins, p. 42, Brine, 2006). Service-minded organizations appear to be making positive ground with consumers in terms of brand loyalty. Having positive internal staff which is efficient, rapid response time to internal problems, and programmer designed to recognize individual consumers are activities which are currently undertaken at the very efficient Four Seasons Hotel. The brand is well-known for its capable staff and has a positive reputation in this regard. Though the internal accommodations are posh and upscale, clearly having a comfy, esthetics environment will no longer work for the chain in building loyalty when value focus describes todays traveler for this hotel. The Four Seasons needs to go the extra proverbial mile to reinforce the value of consumers and ensure that internal activities are efficient, friendly, and creates positive relationships with people in order to build loyalty. Hotels must clearly define what they are and what they want to be in the eyes of their guests and their employees. Brand loyalty is maintained by offering guests a consistently excellent experience (Gunter, 2006, p. 24). The key in this situation is that consumers are demanding consistency in service delivery, which would point toward developing staff as a step toward brand loyalty for the Four Seasons. To build loyalty, a business must: Look through the lens of the customer, exceed their expectations, and make it easy to do business with you (Hanoverian, 2007, p. 54). This again points toward another service-oriented aspect, an industry issue, as a step toward satisfying client demands. Again, this is where the Four Seasons excels, therefore in terms of building loyalty, the company is on the pent more than $43 million in advertising in 2008. However, the business is expected to obtain revenue of 1. 2 billion. Clearly marketing is a significant investment in this competitive industry in the pursuit of building brand loyalty. Further research identified that nearly 50 percent of some hotels, in ideal marketplaces, have guests which stay from seven to 29 days (Chipping, 2006). This is a significant margin, thus service provision would likely be highly scrutinized by this long-staying guest when choosing future hotels for extended stays, an aspect which would drive brand loyalty. This is a much more profitable customer. The Four Seasons hotel must also recognize that long-term guests represent a very significant profit margin and work consistently in providing better service than other upscale hotel competitors. A renewed focus on staffing and positive service provision is key to building loyalty in this chain. 4. 3 Costs and consumer satisfaction One representative of the hotel industry identifies that online concierge services are helping to build loyalty (McMullen, 2006, p. 22). If consumers are turning toward the ease and convenience of online services, they will likely appreciate a flexible and odder brand which is able to make their stay as convenient and hassle-free as possible, which was suggested by Hanoverian (2007) as a key success tool for building loyalty. Research did not uncover whether Four Seasons is making use of an online concierge, however with the growing trend toward Internet usage and mobile technologies, keeping an image of modernism can build loyalty for Four Seasons. Some hotels are even offering pet-friendly environments to appeal to the consumer needs. However, only 2 to 5 percent of guests actually bring animals (Chipping, 2006), thus this is not mass-market focused and likely not a success factor unless engendering niche marketing to diversify clientele. The Four Seasons upscale client often have cherished pets which they pamper and spend considerable resources on. Recognizing that some upscale travelers view their pets much like children could be a new loyalty focus. In terms of value-focus, the dog-loving consumer would likely appreciate the ability to bring their child on vacations with them, thus giving Four Seasons a competitive edge in this regard. An emotional bond must be created with the consumer in order to achieve loyalty (Mantilla, 2006). Emotions play a dominant role in explaining satisfaction and brand loyalty (Back and Kim, 2009, p. ). Since it is cheaper to keep current customers than to obtain new ones (Tepees, 1999), achieving a positive brand reputation and brand proposed by Pence (2008) at this study proposal stage offering a model known as the VALS 2 chart, assessing eight distinct consumer personality and lifestyle trends per demographic group. Emotions are clearly key to reputation and loyalty-creation. The emo tion attached with the new pet-friendly loyalty campaign speaks to the potential effectiveness of this strategy for Four Seasons with the new lifestyle focus marketing and promotion. Red Lion Hotels recently changed its brand name (previously West Coast Hospitality) in order to deliver on a promise to make guests comfortable (Browning, 2008). The ability to deliver on a distinct brand promise can increase demand and build customer loyalty (hospitality. Org, 2009). Further, Kiang, Dave and Oar (2002) offer that brand extensions are helpful in building consumer loyalty, likely because the leveraged brand name has a positive market reputation. The brand promise tends to commit to the consumer with another focus on service delivery. Four Seasons leadership does not believe that any extended brands or brand name hanged should be under its parent company umbrella for reasons of brand identification and reputation for the hotel chain on the market. The hotel desires to stay the Four Seasons and is not looking for expansion. However, evidence suggests that a rebinding or altered brand strategy, using new hotels with new brand names, can give opportunities to change any reputation damage and also reinforce the quality of the parent brand company. Four Seasons may wish to reconsider this aspect when building loyalty as a meaner to extend and publicly promote the diverse family of brands under the Four Seasons direction. Linking a positive brand name with a new brand can give Four Seasons new flexibility and design a variety of loyalty programmer to a new client demographic. There is clearly a consumer shift moving toward the quality and consistently of service delivery when determining which hospitality brand deserves more loyalty than other competing hospitality brand. Since they consider the loyalty program and rewards associated with them to be of high priority when determining travel, it would make good business sense for the Four Seasons to implement them to best fit consumer demands and lifestyle-related expectations. Such efforts would require Taft members to be developed as consistent, motivated and professional service providers to satisfy consumer demands and deliver the consistent quality of service that guests come to expect. Consumers are watching their economic portfolios, something which was evident when analyzing their dissatisfaction with being nickel and dimmed to death as described by Blitz (2008). The current economy across the globe is forcing many individuals, at all levels of financial backgrounds, to reexamine their spending policies. A points-based loyalty programmer at the Four Seasons would be good business sense based in the information provided.