3.0 Customer situation
Nowadays, Customers seek for not only the best solution but also the best treat in order to fulfill their satisfaction. Most people make a decision to buy something or to use a service based on an interaction concerned with service quality more than product attributes (McKean, 2002). The service quality refers to link between the gap of customer’s expectations and the business perception of how the service is performed (Parasuraman et al., 1985 cited in Walker and Baker, 2000). In the same way, the buyer behavior concerned the marketing mix, PEST, and other influence as shown in figure. 1. These factors impact to the customer’s decision making of purchasing products and motivate them to choose products and services (Kotler et al. 2003) conducting the Dusit Thani hotel to determine its perception, improve properties and directly meet the customer’s expectation.
4.0 Recommendation: To evaluate the Dusit Thani hotel by Marketing plan
In order to meet the customer expectation we should know what we are, where are we what we would do in the future. The marketing plan is useful to identify the answer or the appropriate solution. The stages of the marketing plan as show in figure. 2 consist of marketing analysis focusing on macro environments, target markets concerned understanding who the current and future customers, objective generating what we want, marketing mix identifying what we have or what position we are, control and monitoring referring to improve or develop our abilities. Thus, marketing plan can help managers or marketers to think more analytically and systematically which lead to match appropriately both gap of the customer’s need and company’s aspect. In addition, marketers should do doubly the marketing plan with the marketing research which helps they know the raw data lead to understand what customers want exactly and which position the hotel is exactly. Most importantly, in this case, marketers can use the marketing plan to identify the participant of each factor and section in which situation and the Board of directors including managers of the Dusit Thani hotel can hold the perfect timing to launch a new policy or strategy marketing and improve, develop its properties to be unique competitive advantages (Cohen, 2001).
4.1 Marketing Analysis
The marketing analysis or the marketing audit is “a systematic examination of a business’s marketing environment, objective, strategies, and activities, with a view to identifying key strategic issues, problem areas and opportunities” (Jobber, 2004: 41). The marketing analysis is a basis of a plan improvement which managers of the Dusit Thani need to know ‘where are they now?’ and ‘where could they go for the future?’ (Drucker, 1973 cited in Brooksbank, 1996). This step includes PESTEL analysis, analysis of the target market, competitor analysis, SWOT analysis, and Product Life Cycle (Gilligan and Wilson, 2003).
4.1.1 PESTEL analysis
PESTEL or macro environment known as ‘the external factor’; political, economic, social, technological, environment and legal factors which the company cannot control them have a wide framework-effect for a company (Knowles, 1998). Hence, this analysis identifies the external impacts might give potential opportunities or threats that are a concern to the company (Middleton and Clarke, 2001). To explain the Dusit Thani hotel’s PESTEL analysis as follow as:
1) The political factor
The Thai government had set up the Tourism and Sports Ministry designed to create, develop and improve the quality and standards of the country’s products and destinations. In 2004-2008, the Ministry has a plan to create establishment of overland routes linking Thailand to its regional neighbors as well as promoting tourism cooperation under the framework of various regional and sub region groupings and develop online database and a professional Internet-based Call Centre for visitors on a 24-hours 7 days. There are other activities in 2004 such as a homestay program, language training program, the police-security and convenience course for better saving tourists. In addition, the ministry has a workshop in order to develop the skill of human resources. Under the policy of the One Tambon One Product scheme, the ministry has a plan to improve the way to contact or deal with customers and organizes high schools and middle schools in some parts of Thailand works as volunteer guides which is a foundation of development’s skill for leisure industry. Importantly, in order to grasp the number of tourists by 2008, the government has provided a plan for 2004-2008 of the Thai region's centre of health-care excellence" such as the spa center. And this will turn Thailand into a medical services hub for Asia, and set aside more than 2.6 billion. The ministry also focuses on traditional culture such as cooking Thai traditional style. Over all, the government certainly supports the field of the tourism and hospital industries; the Tourism Authority of Thailand (TAT) expected the amount of visitors from this field should be 13.4 million arrivals in 2005.
2) The economical factor
In 2003, the global tourism was affected by 2 major situations: the American–Iraqi conflict and the Severe Acute Respiratory Syndrome (SARS) epidemic in Asia. SARS left behind the most direct impact in Thai tourism history (TAT). In 2004, the impact from fashion business i.e. garments and textiles, leather goods and jewelry had improved and over 50 percent of the earnings from Thailand's fashion houses come from tourists. However, according to the Bangkokpost News, in the past 4 years before 2004, the economy expanded 35 percent to 6.6 trillion baht. The GDP growth in 2004 reached 6 percent and Thailand’s international reserves grew US$32.7 billion over US$49 billion from 2000-2004. Public debt to GDP fell from 60 to 48 percent in 2004 and other negative factor in 2005 is the high oil prices increasing the business’s investment cost. Moreover, the impact of the violence in the south and the bird flu continue to affect through 2005. All factors slow down domestic and global growth.
3) The social and cultural factors
The recent decade, Thailand has had an image of the land of smile including the original and traditional Thai culture becoming the unique image and conducting to dramatically develop Tourism and hospitality industry. However, as a result of SARS and the America-Iraq conflict, in 2003, total trade with international tourists sharply decreased. For example, the European principal market such as Germany, France, Switzerland, Italy, etc., experienced a slowdown with a total of 2,256,160 arrivals to Thailand, representing a drop of 7.94 percent and the American market dropped of 6 percent or a total of 576,589 tourist arrivals. While, the south Asia market as a total of 390,335 tourist arrivals slightly changed from a previous year. In addition, the unrest in the South of Thailand and the impact of bird flu in 2004 having enormous affect on Thailand and the number of tourists could not reach the forecasted amount for 2004. Because of these unsatisfactory factors, there was much confusion among the tourist markets, especially the sensitive female market, which preferred to travel safety and delay a trip. In addition, the effect of the economic in 1997 had changed Thailand’s strategies using Tourism to enhance the revenue and had a direct impact to population issues such as occupation and social culture. In particular 2003, Thailand attracted 10 million international tourists with higher growth from Indochina and the Middle East. 12 million international arrivals as 2004 drew to a close. Equally important, local people tend to travel inside the country more than outbound leaded the domestic tourism in 2003 reached at 56 percent while international arrivals dropped at 46 percent. In 2004, generally, 37 percent of the labor forces in Thailand involved the service industry (see figure. 3) showed an important role of the service occupation becoming a significant part of society and dramatically changed the importance of the role of tourism and hospitality industry in Thailand.
Figure 3 Labour force by occupation (the Bangkokpost news)
4) The technological factor
Technology widely influences the business environment of tourism, leisure and hospitality. The development of computer reservation systems introduced on a worldwide scale has also changed the marketplace for booking holiday. The worldwide electronic room nights in 2004 increased 7.5 percent for the Global Distribution System (hotel-online.com). In addition, The TAT has also signed an agreement with Thai Airways International, and Cendant Travel Distribution Services Inc which have a large widespread two million-membership base and over 7,000 affiliated companies and The TAT cooperated with 54 leading travel operators and wholesalers in 16 countries to promote Thailand as ‘a tourism destination’. This would expand Thailand’s image through several channels of Cendant TDS which operates both online and offline travel services. Tourism-related products of Thailand would be promoted on all of Cendant's channels. In addition, the internet has increasing its role in distribute various information through the website. Importantly, nowadays most people in modern lifestyle spend their time on searching the internet. Hence, the most effect is the online life has influenced new generations and has occurred new activities via the website. Thus, this factor seems slightly impact in a short term but large value in long term with many businesses can earn more benefits from high technology including the leisure filed industry.
5) The environmental factor
The result of SARS and the America-Iraq conflict had enormous impacts to Thailand in 2003. The movement of global tourists dramatically decreased lead many businesses in tourism and hospitality steadily declined 7.36 percent which dropped by 4.39 percent of previous year. In 2004, the influence of the bird flu and Tsunami had occurred and effected to wide angle in Thailand continuing to 2005. Moreover, the unrest of the terrorists in the South of Thailand is a worse situation difficult to control and has effected to safe and sound image of Thailand. Other event, the bird flu has effected in the domestic economic area but importantly, the damage from the Tsunami on December, 26 2004 pushed the TAT to launch a new strategic management to renovate and support suffered areas so as to console domestic tourists and return international tourists to Thailand.
6) The legal factor
The WTO has a mission in order to develop national human resources to enhance local authorities and tourism enterprises. The (TAT) is under the Tourism and Sports Ministry organization generate a promotion of Thailand’s tourism, create strategic marketing plan, cooperate with international and national organizations and accelerate a technological development of business activities information. For the TAT policy of 2003-2006, it promotes tourism as a tool to increase the economic and generate the revenue in all parts of Thailand. It also provides the strategic marketing plan focused on expanding qualitative tourists and develop its human resources in order to be a professional driving force to support all international and national organization levels. In addition, it drives the tourism and hospitality activities to generate and distribute more tourism and hospitality information via the internet especially e- tourism. Hence, the government concentrates on development of tourism and hospitality industry reflected to the economic sector. Also, the Tourism and Sports Ministry has joined with the TAT and Thai Airways International and launch a marketing campaign worth 120 million baht in 2005 for the global market.
4.1.2 Competitive analysis
Kotler et al. (2003) noted that a good competitor analysis must extend beyond inventory comparisons to true competitive advantages of the companies within the competition. Understanding the Porter’s model of five force-competitive influence structures which are threat of new entrants, threat of substitute products, bargaining power of suppliers, bargaining power of customers, and intensity of rivalry helps marketers clearly identifying a scope of competitive sources. However, this paper would not conduct in deep details of Porter’s model. But, generally in this case, the competitive factors can compare by type of the hotel, location, target groups, available of outlets and facilities, prices, brand and technology such as the Shangri-La hotel is located the same business area, focuses on the same target market, provides various outlets and facilities including famous brand name especially the Shangri-La hotel’s room rate is slightly higher than The Dusit Thani but the Shagri-La can survives in the market. Thus, The Dusit Thani needs to figure out how to upgrade its properties and what would be the unique advantage of the Dusit Thani hotel.
4.1.3 SWOT analysis
This study illustrates the Dusit Thani’s situation or micro environment analysis. The term SWOT analysis provides check-lists for auditing the organization’s strengths, weaknesses, opportunities and treats in the business environment (Mercer, 1998). In this paper, strategic alternatives generated by the SWOT analysis are ideally built on the Dusit Thani’s strengths in order to exploit opportunities, counter threats and correct weaknesses (Jobber, 2004). The strengths and weakness concern the internal organization while the opportunities and the threats concern external organization as shown in Figure 4.
4.1.4 Product life Cycle
Product life cycle is also a common used concept in marketing field. There are five stages of growth that products have been issued into the market: introduction, growth, maturity, saturation, and decline. In each stage is associated with different factors including profit, competitors, demands, and different promotional strategies. It helps a company to analyze the trends of the market for its products and segments (Seaton & Bennett, 1996). However, every company seeks for a strategic implement so as to maintain stable maturity. Specifically, the Dusit Thani has new marketing strategies in order to continue accumulating the maturity stage. In early 2003-2004, the company planned to renovate its hotel’s facilities and outlets such as restaurants and the spa center and maintain the quality service in order to meet customer expectation
4.2 Target Market analysis: Focus on target groups of the Dusit Thani hotel
The target group is a group of people that the company creates and maintains a marketing mix specifically meeting their needs, wants and expectation. These include segments currently served by the company and newly recognized markets (Kotler at al., 2003) which the Dusit Thani needs to consider in the marketing plan which seeks the appropriate solution for both the hotelier and customers. In deed, it needs to realize who the current and potential customers are and do the market research in order to adapt or improve its properties to response to their targets. Currently, its target groups are divided into 2 main segments; Business and leisure travelers. The business travelers make up one of the largest and most important segments because this segment is high customer quality in ‘a purchasing power’ and certainly has a chance to return using services and facilities. In fact, the Dusit Thani hotel offers a virtual ‘office- away-from-the –office’, various outlets and facilities to attract this target. On the other hand, the leisure travelers including singles, couples, couples with children, the young, the elderly, the wealthy or middle-income earners are also a large segment creating their traveling for holiday and ‘weekend escape’. Commonly, this target is satisfied by sightseeing or leisure and pleasure travel (Wearne and Baker, 2002). In particular occupancy, over 90 percent is foreign guests which the business traveler takes over 60 percent while the food and beverage outlet’s guest shows 60 percent is Thai and 40 percent is foreigners. Generally, comparing the main business of the Dusit group in Bangkok for the quarter ended September 30, 2003 and 2004 the revenues increased from 308.7 to 328.3 million baht. It shows how these targets certainly utilized to the hotel. Furthermore, the Dusit Thani still concentrates on these groups adding more value of these groups with the health issue to match the tourism and sports ministry campaign the group has concentrated on areas such as the spa center, provide more technology through the internet and builds more facilities to accomplish these group’s expectations.
4.3 Objective
Objective setting is an essential step in the marketing planning process and it is statements that translate the hospitality company’s mission into easily understood goals regarding markets and products, sales, occupancy, and the marketing mix. An appropriate objective needs to consider the customer-driven (see figure 5) concerned what they want exactly which the Dusit Thani can add more value in its organization and push their operation objective to meet the customer and their expectation (Schermerhorn, 2004). Following its vision and recognizing the customer needs which customers prefer touching Thai atmosphere or traditional style. As a result, the Dusit Thani launched a strategic marketing which attracts the guests under ‘Dusit, the Thai way of life’ campaigns which planed to spend 40 million baht for a budget promotion.
4.4 Marketing Mix
Marketing mix is the combination of elements that make up the entire marketing plan process. Middleton and Clarke (2002) clarify that marketing mix can be divided into : the original 4Ps for the general marketing concepts (Product, Price, Place and Promotion) and the specific 3Ps: People, Process and Physical Evidence expanded later to suitable for the tourism and hospitality industry as shown in figure. 6 (Gilligan and Wilson, 2003). The marketing mix known as a ‘checklist’ that the hotel should recognize and evaluate which current position the hotel is and what it should be in the future. Hence, this paper would identify the current and the future main important parts of the Dusit Thani’s 7Ps.
4.4.1 Product
The Dusit Thani’s products and services known as its charming Thai standard service quality, comfortable accommodations, outlet and other facilities provide various convenience functions to fulfill the customer needs. It provides 517 luxurious guest rooms and suites including the new Dusit Club rooms and Dusit Grand rooms which one separated in 2 zones: the business, leisure zone. Offering convenient facilities such as a cable/ satellite television, a direct telephone line with fax/ modem, a voicemail, and a wireless internet access available also providing 8 different national cuisines for example Thai, Chinese, Vietnamese, French, Italian, and Japanese styles and other outlets for the afternoon coffee-tea break. In addition, there are multi equipments for meeting and catering zones including other hotel facilities such as 24 hour room service, babysitting service and other hotel recreation such as the Devarana Spa, the fitness Center. Lately, the Dusit Thani has been renovated and changed some outlets adding more facilities such as D’Sens for the French restaurant or renovating the Bubbles nightclub, the lobby. On the other hand, the Dusit Thani hotel has many chains in the Dusit hotels and resorts, the Royal Princess hotels and resorts and its brand has contributed and conducted it to gain a stronger, more famous image, intended hold the customer loyalty. Therefore, the Dusit Thani has enormous products, services, facilities which it provides more choices as ‘all things is in The Dusit Thani’ to meet the guest’s expectation. (see full details of the Dusit Thani hotel rooms and facilities in ).
4.4.2 Price
The accommodation prices of the Dusit Thani hotel are divided by the size, type, and other facilities in the room following the seasons, peak or low seasons similar to other competitor’s prices. However, it offers discount and various activities for the member who handles the Dusit Gold card and AHA association. Moreover, it offers a special price for the travel agency and the business’s customers.
4.4.3 Place
In current age, the internet distribution channel obviously gives the Dusit Thani hotel more benefits. Online distribution channel is the easy way to contact and the most convenient way for customers in the modern lifestyle-society. In order to fulfill the demands of business and leisure travelers, the Dusit Thani hotel forms general hotel profiles via the Dusit.com website such as the hotel location, room types, restaurants, and other facilities. It also offers the price of connecting internet in rooms, room rates, the details of meeting and convention center, and facilities in the hotel such as the spa center, the fitness center, the golf club all including the location, opening hours. Especially, in the restaurant section, it provides chef’s profile, capacity, and type of each restaurant. It illustrates the restaurant to visitors and helps them make a decision to choose and book a table on the internet. In addition to assessing this web, it allows visitors to organize a smart travel plan. Travelers can check the suitable time for their trip according to seasons and an event calendar. In 2003, TAT showed Japanese is the most arrivals visited in Bangkok and mainly, its customers from Japan. Hence, its website provides in English and Japanese. All above, customers or guests can receive the right information. Mainly profitable, customers can search a room type including the price whatever they wish and make a room reservation or cancel it by themselves. Lately, the Dusit Thani has provided more the customer relationship management program via the website such as FAQs and offers the efficient distribution channel by the call center as ‘one stop service’.
4.4.4 Promotion
Promotion activities concerned advertising, personal selling, direct marketing, internet and online marketing, sale promotion, publicity are used as a strategic marketing (Jobber, 2004). Likewise, The Dusit Thani has provided various activities of the promotion marketing For example, the marketers or sale contact to customers via the travel agencies or the customer’s company giving them special prices, collecting night program or complimentary who use directly or indirectly the products or services of the hotel such as giving the secretary special collecting night programs. Thus they are motivated to due with the Dusit Thani hotel. On the other side, the Dusit.com website provides much more benefits to do promotion activities. The hotel can do the advertising, giving the special promotion, or do the public relations via the website which the Dusit group has provided an electric customer relationship management (CRM) program for visitors. In addition, there provide the loyalty program, the affiliate program, to motivate customers to join and become a part of the hotel. Moreover, the chain hotel and association benefit the hotel in enhanced widespread customers.
4.4.5 People
Many hotels have never stopped developing their properties conducting to competitive advantages. Then, Dusit.com needs to become alert and seek the way to maintain its resources and gain its advantages. They can be established by technology, organization or structure, and people. But, the essential and main sources are people and people-driven process to sustain advantages (Thompson, 2003). The Dusit Thani managers must discuss and let employees know that they are important and make them more valued by giving rewards, promotion, and perks. Making them feel they are a part of the organization and satisfy them in their jobs in order to use company knowledge assets to increase its productivity. To improve or generate knowledge, leaders or manager ought to discuss with employees because they are the people who directly communicate with customers. The knowledge transfers from staff and inputs from top managers through organizational levels. Employees receive new challenges and ways to generate knowledge. They are able to adapt or put new knowledge into the knowledge management information systems (Bouncken and Pyo, 2002) and this leads the hotel to analyze the marketing plan more efficiently under the quality resources.
4.4.6 Physical Evidence
Following the vision of the Dusit Thani hotel emphasizing on the authentic Thai hospitality’s service, the Dusit Thani’s atmosphere is based on Thai traditional concept. The hotel decoration is combined between original Thai and modern style which make guests feel more welcome. These make the Dusit Thani hotel more unique in its image and brand name. In addition, its building is ease to assess and easy to transport and visit because it was located in the business center including more convenience to go trough the sky train and subway stations hence, the Dusit Thani hotel building and its style are attracting both the business and leisure travelers.
4.4.7 Process management
As mentioned before, the Dusit Thani hotel emphasizes on the unique of Thai service quality. Hence, guests are handled and managed with charming Thai hospitality’s style and elegant traditional services focusing on ‘treat the guests the best’ and not only point to service at the first contact but also remain the service quality standard as the guest’s aspects in order to meet more than the customer’s expectation. Again, People are the core source of the hospitality and have influences all process’s levels. Not only the staff level has an interaction with customers but also the managerial level can attract guests in order to obviously respond the customer’s need and more efficient service quality.
4.5 Control and Monitoring
Marketing control is a consequent of the marketing plan which measures the result of the marketing plan’s process (Middleton and Clarke, 2001). Performance’s evaluation benefits the Dusit Thani hotel in many ways which understands the results of the feedbacks in each stage and adapts appropriately between the strategic objective and the current situation. Also it helps the hotel to adjust and improve the performance, do the right way and make the right decision. In addition, the hotel should control its process and consider in ROI and TQM (Total Quality Management) at the same time in order to complete service quality which match the customer’s, hotelier’s demands and occur competitive advantages. Hence, the Dusit Thani would reduce its failure and earn more profitable with using marketing plan strategy to evaluate it properties, prepare a suitable plan and encounter unexpected situation more efficiently.
5.0 Conclusion
To offer a successful hospitality product, hotels and resorts should recognize the importance of using marketing and how to manage their knowledge in organizations. The organization needs to seek what customers want. Also, there are many approaches to meet a customer prospective. The marketing plan is an appropriate tool in order to analyze both sides of own hotel and customers and overview situation and macro, microenvironments of the destination. However, the marketing strategy of the Dusit Thani hotel emphasizes the Thai service quality’s standards and using company resources increase business performance and its brand in order to catch customer relationships in long term activities. This relies on CRM to meet customer satisfaction making the organization more powerful allowing them to reinforce the marketing process more efficiently and be able to sustain its competitive advantage. Above all, the marketing plan could not productively utilize without doing the marketing research and marketers should understand the reliable attitudes of respondents (Jobber, 2004).
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