Marriott Target Market

Segmentation and Positioning

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Executive Summary
The current report aims at reviewing the market segmentation and
positioning strategies utilised by Marriott in London. The hotels of
the analysed chain vastly adopt such segmentation variables as
demographic, geographic, psychographic, user-status, and purpose
of travel to target and position their specifically developed services.
However, the literature review and the analysis of the segmentation
in accord with service delivery shows that Marriott is at risk of losing
its advantageous market position due to diminished implementation
of technologies.

It is argued that in the conditions of modern technology-driven

society, behavioural segmentation on the basis of online purchasing
behaviours might be an effective tool for attracting young travellers.
It is recommended to update currently used digital tools, integrate a
more diverse segmentation strategy capable of identifying the
purchasing needs of technology-interested individuals and provide
more innovations for customer satisfaction. It is possible to
accomplish through generally available mobile check-in
opportunities, virtual reality room tours, and the introduction of
more modern technologies for guests’ use during their stay at
Marriott.

Marriott Target Market Segmentation:

Introduction
The sphere of hospitality industry incorporates multiple
organizations that implement diverse marketing techniques to
provide competitive services and achieve customer loyalty and
satisfaction. The hospitality business is inherently dependant on
immediate customer outcomes. Therefore, the model of
segmentation, targeting, and positioning (STP) is vastly used by
hospitality industry organizations in general and big hotels, in
particular.

While the hospitality market is very broad, the process of

segmentation helps to identify the groups of target customers in
order to analyse and address their needs and preferences for further
directing the services at their accomplishing. According to Ezeh
(2017, p. 32), market segmentation is a process of “dividing the
heterogeneous market into different homogeneous groups of
consumers” who share similar needs and expectations from a
service provider.

Once the groups are identified, and their needs are clearly stated, a
hospitality organization starts targeting its prospective services at
the segments. This process involves the development of specific
services that are of great importance to a particularly identified
segment of customers, such as the importance of in-room safes
and fax-machines for business travellers (Ezeh 2017). The final step
of this marketing process is positioning, which implies creating a
competitive, reliable, and easily recognisable image of an enterprise
so that the consumers develop loyalty to the hospitality entity.

The Marriott hotel, which is chosen for this report, vastly utilises the
methods of their market segmentation and service positioning. The
company demonstrates significant results in its work with consumer
satisfaction and has become one of the leading hotel chains in the
global hospitality industry (Salvioni 2016). The scope of
accommodation types, locations, and available services varies to
meet the needs and requirements of a great variety of guests. In this
report, the techniques of market segmentation and positioning of
the Marriott hotel in London will be reviewed and analysed. It is
claimed that the long-established tradition of setting the needs of
the customer to the front and segmenting the market according to
multiple criteria allows Marriott to attract significant numbers of
guests annually.

Literature Review
The issue of market segmentation and positioning in the hospitality
industry is vastly covered in the literature that provides an
opportunity to obtain a sufficient amount of information necessary
for the analysis. Overall, the role of the customer in hospitality in
general, and hotel business, in particular, is crucial, which stimulates
the emergence of consumer-driven marketing techniques (Chen,
Raab & Tanford 2015). Therefore, the SPT model is vitally important
for hotels to withstand strong competition. It is important to state
that despite accurate knowledge about marketing processes, there
is not one single method of segmenting a hotel’s market (Kotler et
al. 2017).

Hotel managers consider various criteria to their potential customers

into groups, thus creating a great variety of consumer segments. As
Khan, Hakeem, and Naumov (2018) state, market segmentation in
the hospitality industry allows to mitigate the changes in the
marketplace and use the opportunities of the diversified market in
the interest of an organization. Thus, the thorough application of STP
in hotel business allows for significant competitive advantages and
organizational growth.

The criteria for segmenting potential markets include various

dimensions.

According to Kotler et al. (2017), the main variables of market

segmentation are geographic, psychographic, demographic and
behaviouristic ones. Ezeh (2017) identifies and separates some more
additional variables, including benefit, purchase occasion, usage
incidence, user status, usage rate, and image segmentation.
Geographic segmentation divides the customers into groups
depending on nations, states, cities, or districts, paying acute
attention to cultural particularities, attractions, and local
entertainment (Kotler et al. 2017). Psychographic segmentation
pursues clients’ character-specific requirements, life-style appeals,
and social class requirements.

As for demographic variable, it is used to segment the market

according to the customers’ age, gender, income rate, ethnicity, and
family life cycle (Ezeh 2017; Kotler et al. 2017). The behaviouristic
segmentation method is based on the identification of purchasing
behaviour patterns and dividing the customers into groups sharing
the same attitudes to service purchasing. These segmentation
variables are the basis of hotel marketing, but they are not limited
to the ones mentioned above.

Indeed, new types of segmentation emerge due to the growth of

competition in the hospitality business that is influenced by
globalization trends. One of such segmentation type is the one
applied according to customers’ participation, which includes the
development of specific services available to loyal guests (Chen,
Raab & Tanford 2015). In addition, there exists a type of marketing
segmentation that concentrates around the purpose of travel and
might be narrowed down to business, family visits, and non-
business trips (Ezeh 2017).

The market positioning is based on the segmentation process and is

aimed at meeting the identified needs of particular consumer
groups. Utilizing location, personnel, service, and image
differentiation, a hotel might embrace a very diverse population by
meeting their specific requirements and interests (Kotler et al. 2017).
Large hotel chains are entitled to define their target market to direct
their services specification at their particular customers better.

Marriott International is one of the largest hotel chains in the world

today. Having originated as a family business, it now incorporates
“2800 hotels in 70 countries” (Madar 2017, p. 142). The organization
owns sixteen brands and provides a significant number of services
to diverse market segments. However, the primary population
targeted by Marriott includes mid-scale, upscale, and luxury markets
(United States Securities and Exchange Commission 2017). The
company initiates franchising to expand its business properties in
diverse countries, which increases their prospects to sustain a
leading position in the market (Marriott International, Inc. 2018
annual report 2018). As it is evident from Figure 1, the company has
increased its revenues between 2012 and 2016, demonstrating
growing rates of profit.

Figure 1 – The evolution of Marriott’s income (Madar 2017).

More specifically, the loyalty rates achieved using proper

segmentation techniques application are significantly higher than
those of leading competitors of Marriott. It is demonstrated in Figure
2, where the graph shows how Marriott’s reward program benefits
its customers’ loyalty.
 Figure 2 – Number of Marriott’s loyalty program’s members in
comparison with competitors (Loyalty has its perks 2018).

Results and Discussion

The core of the report is aimed at the analysis of Marriott in London.
According to the official website of the Marriott Hotel, there are
forty-five Marriott hotels in the United Kingdom, nine of which are
located in London (Marriott hotels worldwide 2019). The analysis of
the hotels of the Marriott chain available to the visitors of London
has demonstrated that the organization utilizes different variables
to segment its market. The variables vary from geographical and
psychographic to user-status and purpose of travel segmentation
(Ezeh 2017; Kotler et al. 2017).

Being located in different parts of the city, the hotels are primarity
located in central districts, close to the most significant cityscapes
and historical sights. Such physical positioning of the facilities is
defined by both geographical segmentation that targets at attracting
people by landscapes, and demographic, that prioritizes luxury and
upscale market, which requires beneficial location and high
standards of properties. For example, the services available at
London Marriott Hotel Maida Vale, include business meetings
facilities, which might be seen in Figure 3, business lunch menus,
and other services specific to those who travel for business
purposes (London Marriott Hotel Maida Vale 2019).

Figure 3 – Conference room in London Marriott Hotel Maida Vale

((London Marriott Hotel Maida Vale 2019).

Another hotel situated in a picturesque location in the city of

London is London Marriott Hotel County Hall. As it is seen from
Figure 4, the building of the hotel represents unique English
architecture, since the hotel occupies the building of the former
London City Hall (London Marriott Hotel County Hall 2019).

Figure 4 – The façade of theLondon Marriott Hotel County Hall

building (London Marriott Hotel County Hall 2019).
This hotel positions an array of services required by the market
segment identified with the help of geographical and demographic
segmentation. Its luxury rooms and location aim at attracting up-
scale customers with high-level income who are interested in diving
into the classic atmosphere of London. Indeed, the views on London
Eye, Big Ben, Westminster Bridge, and the River Thames (London
Marriott Hotel County Hall 2019). Thus, multi-variable segmentation
proves to attract more customers sharing similar requirements from
the hospitality industry.

As for Grand Residences by Marriott – Mayfair-London, this hotel

embodies the scope of services specifically designed for leisure,
tourism, and family time-spending. The Edwardian-style house,
where the hotel rooms are situated, provides luxurious suits perfect
for relaxing. The photo of the building might be seen in Figure 5.

Figure 5 – The building of Grand Residences by Marriott – Mayfair-

London (Grand Residences by Marriott – Mayfair-London 2019).

It is evident that the market for this hotel is segmented according to

the psychographic criterion and aims at satisfying the needs of
those cherishing comfort and calmness in their hotel stays (Ezeh
2017). Therefore, upscale guests might be the target population for
Grand Residences by Marriott – Mayfair-London.
A more modern exterior and interior design of London Marriott Hotel
Kensington, as seen in Figure 6, is targeted at guests of a more
contemporary taste.

Figure 6 – The interior of a room in London Marriott Hotel

Kensington (London Marriott Hotel Kensington 2019).

Entertainment options, flat-screen television, wi-fi, comfortable

bedding, and location close to significant London landmarks
demonstrate that the organization has applied multi-leveled
segmentation to attract contemporary audiences according to their
geographical, demographic, and psychographic features. Overall, all
of the analysed hotels available to London guests share the same
basic online booking opportunities, not providing exclusive digital
and innovative tools of checking-in or room preview. It is assumed
that such a standardized approach to technology utilization by the
organization is insufficient in the contemporary technology-driven
hospitality industry.

In the course of the review of the literature and the analysis of

market segmentation and positioning of services by Marriott hotel in
London, some difficulties have been identified. One of them is the
diminished role of behavioural segmentation on the basis of service
purchasing behaviour. This issue mirrors the state of affairs on a
global scale, where “the refinement of segments has been limited by
a comparatively slow adoption and implementation of new
technologies” (Pridmore & Hamalainen 2017, p. 110).

Despite the significant efforts made by the organization to apply

information technologies and digitalization to service positioning,
there is some threat to sustainability due to the growing rates of
digital purchasing behaviours. As the management of Marriott
International identifies in its annual report, the hospitality industry
requires continuous development in the sphere of technologies,
including those used for “reservation, revenue management,
property management, human resources and payroll systems, …
Loyalty Program, and technologies” available to guests (Marriott
International, Inc. 2018 annual report 2018, p. 16). Failure to ensure
continuous technology implementation in service delivery by
Marriott increases the risk of losing a competitive position.

Therefore, it is recommended to update the available digital

resources, initiate extensive work on website refinement, and
integrate more opportunities for the customers to browse, get
enough information about the hotel, book, and check-in, using
digital devices. Overall, the majority of people in the modern
technology-driven world benefit from the opportunities provided by
the Internet. Their ratings and feedback expressed through social
media might drastically impact the brand recognition and overall
success of an organization (Neirotti, Raguseo & Paolucci 2016).

Since market segmentation allows for identifying the most

profitable target population, it is vital to prioritize technology users
as one of the leading market segments (Camilleri 2018). According to
Lam and Law (2019), contemporary hotel guests are exposed to
multiple channels of information distribution. They are interested in
technology at two levels, including the choice and reservation of
accommodation, and the comfort of stay enhanced by the
availability of technologies and innovations.
Thus, Marriott needs to enhance its current level of digitalization
and technology implementation not only through web-site
improvements but also via purchasing behaviour segmentation. It is
possible to reach targeted customers through apps and social
media, where they tend to be easily contacted (Camilleri 2018). One
of the ways to eliminate the risk of competitive disadvantage on the
basis of technology application is the introduction of virtual reality
tours as an effective tool for attracting new customers (Young 2016).

The chain of Marriott hotels already has a well-developed system of

online services and segments market according to user-status. It is
illustrated by the promotion of the so-called M-Club that prioritizes
the needs of loyal customers (MClub 2019). It is important to use the
experience in the implementation of such ideas in the future for
segmenting technology-interested customers.

Marriott Market Segmentation, Targeting,

and Positioning: Conclusion
In summation, Marriott hotels in London are very successful
hospitality entities, which illustrate the global dominance of Marriott
International. The long-established and well-defined segmentation
strategies used by Marriott vary from demographic and
psychographic, to geographical, user-status, and purpose of travel.
Separate hotels aim at a particular market segment, developing a
refined array of services that might meet the needs and
requirements of a specific group of guests.

However, the analysis has shown the lack of attention of the

organization to the promotion of technology application throughout
its operations, It is anticipated that digitalisation of information
channels, booking and purchasing opportunities, as well as an
increased number of technologies available to the guests might
ensure Marriott’s sustainable growth and competitive position in the
market.

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