Reference no: EM132192586

Marriott: Your Home Away from Home

With 4,400 hotel properties in 87 countries, Marriott knows how to target different types of travelers. Its 19 brands use careful segmentation strategies based on demographic and psychographic variables to determine what their guests want and how best to meet their needs. Its extensive customer research allows the firm to identify its customers, understand cultural or generational changes, and adapt its hotels to target these different travelers more effectively. It also helps Marriott develop strategies to stay ahead of the competition and the emerging rental sharing sites such as Airbnb and VRBO (vacation rental by owner).

“Segmentation is really important because it really helps us to design the guest experience for a particular brand,” says Tina Edmundson, Global Brand Officer, Luxury & Lifestyle Brands for Marriott International.

Marriott uses price and service as a major form of differentiation among its hotels. For instance, it separates its brands using terms like Upper Upscale and Select Service. Upper Upscale has all the amenities a traveler is looking for in a luxury hotel, including room service, a bar, doormen, and more. Marriott’s Ritz-Carlton brand, known for offering the highest in guest amenities, fits this category. Select Service still offers guests a great experience but lacks some features such as room service and bellhops. Marriott’s Moxy hotels is more of a do-it-yourself hotel without doormen or room service. It is positioned as being a stylish, but affordable, hotel. Each one targets a specific type of customer: Upper Upscale is for those who are willing to pay high prices for a luxurious experience, while Select Service targets customers who are looking for quality experiences at lower prices.

Marriott also segments its customers based on lifestyle characteristics. The Discoverer category is interested in exploration and experiencing local culture. Marriott’s luxurious Renaissance Hotels targets this market with “local” themes. Renaissance Hotels come equipped with a focused concierge service called Navigator to provide suggestions for local experiences.

Although marketers at Marriott have become experts at customer segmentation, they constantly face new challenges. Millennials, for instance, differ significantly from baby boomers in their hotel preferences. Baby boomers enjoy familiarity and comfort, something Marriott’s high-quality hotels have been able to achieve. For many consumers, consistency of the service and atmosphere is important—they want the J.W. Marriott they stay at in Milan, Italy, to be similar in service and design as the one in New York City.

Millennials go in the opposite direction. They desire an unpredictable adventure and are less likely to want to stay at large hotel chains. They are also more likely to travel globally; millennials are 23 percent more interested in traveling abroad than non-millennials. These wide-scale differences among two large demographic groups represents a challenge for Marriott—one it is tackling head-on.

For this reason, Marriott partnered with consulting firm Fahrenheit 212, which specializes in marketing to millennials. Preliminary research shows that millennials need to be convinced of the value of a hotel, requiring the Marriott to “tell a story” about its hotels. Marriott also tapped into the insights of local entrepreneurs and hotel employees. They were challenged to come up with creative ideas that would attract both travelers and locals to the hotel. Teams whose ideas were adopted were awarded $50,000. In this way, Marriott is able to utilize local talent who are familiar with the city and know the culture.

One hotel that has been developed to target millennials is Moxy Hotels. Marriott partnered with IKEA to develop a hotel that is specifically targeted to the millennial traveler. Moxy Hotels combine a stylish atmosphere, functional guest rooms, affordable prices, and the types of amenities that tech-savvy millennials care about the most (e.g. Wi-Fi, televisions, and public areas with computers). Unlike some of the other generations, millennials tend to be more self-sufficient, so Moxy does not have room service or bellhops. This keeps prices down for millennials, who tend to have higher unemployment or lower-paying jobs than other age groups.

No matter who the target market is, they all have one thing in common: They seek a pleasurable experience. As Tina Edmundson explains, “It’s no longer about filling rooms anymore. It is really about providing experiences that resonate with guests personally.”30

Discussion Questions

How does Marriott use psychographic and demographic variables to segment the market?

Why is the millennial traveler market posing challenges for Marriott and other hotels?

Describe some ways that Marriott uses market research to discover what their customers want.