Reference no: EM133339202

Case Study: Marketing the Shangri-la Hotel

Written by Sanjay Gandhi

Monika Schmitt is the owner of the Shangri-la Hotel in the town of Anjana in Kerala, India. Monika, a Swiss national, first visited the region whilst on holiday in 2001 and immediately fell in love with the white sandy beaches and laid-back lifestyle of this part of India. So, she decided to build a hotel and spa catering for adventurous European travellers. Since Monika opened the Shangri-la in 2003, tourism in Kerala has grown dramatically and several hotels, spas and luxury resorts have opened up in the area. Once a sleepy fishing village, Anjana is now a popular vacation destination for domestic and international tourists in search of an authentic luxury spa experience.

Monika oversaw the construction and decoration of the initial 20 individual cottages which were built in a simple but elegant style and then, in 2010, she secured funding from the State Tourism Authority to expand the resort with the addition of a 50-room hotel complex. Again, each of the rooms was tastefully decorated and enjoyed a sea view, with either a patio or balcony overlooking the spectacular Arabian Sea.

The Shangri-la hotel has a vegetarian restaurant, which is popular with both guests and the general public. There is also a spa which provides Ayurvedic treatments, a natural system of medicine that originated in India more than 3,000 years ago. These treatments include massages and aromatherapies using traditional oils and herbs, with each guest having a specifically tailored treatment plan which also includes a diet and exercise regime. The Shangri-la also provides yoga and meditation classes, often on the beach, and there is a small boutique selling Ayurvedic products and holiday souvenirs.

Being one of the first hotels to be established in the area, the Shangri-la enjoys a prime location in the town. However, in recent years, due to wear and tear and the launch of competitor hotels and spas, Monika accepts the resort is in need of renovation.

Monika feels she is offering an attractive range of services at the resort and is keen to point out that a large percentage of her guests return every year. Her clients are mainly older holidaymakers from Europe and Monika is aware of the growing number of 'domestic' visitors to Anjana Beach from big cities such as Mumbai and New Delhi, who are looking for an eco-friendly, relaxing holiday experience. At present, Monika does not proactively target this segment of the market.

Monika employs over 50 local people during the peak season (October - March), so the ratio of staff to guests is quite high, with visitors enjoying a good level of customer service from her largely experienced and well-qualified employees. She also prides herself on paying a fair and higher than average wage to her employees. As a result, room rates at the hotel tend to be higher than some of the larger, competing hotels in Anjana. Furthermore, some of the competitors provide a wider range of services for their guests, such as visits to local conservation projects and excursions to wildlife sanctuaries.

Over the last few years, Monika has noticed a drop in the number of visitors at the Shangri-la during the peak season. As most guests at the Shangri-la are returning customers or book through personal recommendations, Monika has not invested much time and money into attracting new customers from the growing market of domestic tourists. She attends the World Travel Market in Berlin each year to promote her hotel to international travel agents but is unsure whether it would be worthwhile embarking on a sustained marketing communications campaign to compete for the growing number of Indian families that visit Anjana each year. Additionally, Monika has been informed through feedback forms that guests would like to see more eco-friendly initiatives at the hotel, as well as further opportunities to engage with, and support, the local community during their stay.

Question 1 Based on the information contained in the case, and using concepts from B100 Block 4, describe the marketing mix used by the Shangri-la Hotel

Student guidance for Question 1

Start your answer by briefly explaining what the marketing mix is. Use your own words as much as possible and make sure you add a reference.

Then describe the marketing mix used by the company in the case scenario. There is information on all seven Ps of the extended marketing mix in the scenario but not an equal amount on each of them.

In analysing the case information, make sure you use concepts from B100 Readings 31, 32 and 33 explicitly. Also make sure to add references to these readings wherever you are using concepts and ideas that come from them. You are also expected to go beyond the headline concepts of product, price, etc. In other words, use further module concepts and ideas - wherever possible - to describe how each of the elements of the marketing mix is used in the case scenario. For example, you could explain and apply concepts about 'product' such as the service continuum or product/service benefits.

QUESTION 2 Monika has asked you to advise her on how she should adapt her marketing mix in an attempt to increase the number of bookings at the hotel. How strong do you feel her current marketing mix is and where do you think she should strengthen it? Make recommendations on how she could strengthen TWO elements of the current marketing mix.

Student guidance for Question 2

Your answer to this question needs to build on your analysis in the previous answer. Start your answer here with a short assessment of the existing marketing mix. What are the good points and where are there any weaknesses?

Then make recommendations on how to strengthen TWO elements of the marketing mix. Your answer does not have to be long, but your recommendations must fit with your analysis in Question 2 and be suitable for the nature of Monika's business. Hint: Monika runs a small hotel, compared to her competitors, so she is unlikely to have the financial or managerial resources to, say, invest in an expensive television advertising campaign.

Question 3 After receiving feedback from guests, Monika is interested in improving the social and environmental aspects of the hotel and has asked you to advise her on this. Explain to her how the societal marketing concept could apply to the business. What changes could she make to TWO aspects of the marketing mix to strengthen the environmental and social credentials of the hotel. Use approximately 200 words guidance for question 4

Use concepts from B100 MARKETING Start by explaining what is meant by the societal marketing context. Try to use your own words in doing so and make sure you add a reference. Then explain how the societal marketing concept can apply to the Shangri-la Hotel. What would they have to do in order to follow the societal marketing concept?

Then recommend changes to TWO aspects of the marketing mix that would allow Monika to improve the social and environmental performance of her business. You can think about any two aspects of the marketing mix. Perhaps more could be done to make the hotel more environmentally friendly. Or perhaps other elements of the marketing mix could be adapted to make the business more socially and/or environmentally responsible.

You can come up with creative solutions here if you wish. Your answer needs to be compatible with your analysis in Question 2 and also needs to make sense bearing in mind the nature and size of Monika's business.