Case Study: Marriott’s Market Segmentation and Market Research
Marriott is one of the most renowned hotels in the world with more than 3,800 properties across 72 countries and territories. However, the chain of hotels did not just appear overnight. What started off as a root-beer stand by J.W. Marriott, evolved into a chain of restaurants. Later on, Bill Marriott, son of J.W. Marriott, managed to expand the family’s business from a chain of restaurants to a chain of hotels in a period of over 50 years. Bill Marriott has achieved great success by expanding the Marriott portfolio which now comprises of 16 different hotel brands which include Ritz Carlton, Renaissance, Springhill Suites, Gaylord Hotels and many more (Jr, 2013).
The underlying factor to Marriotts success is the marketing plan that Marriott has which involves effective market segmentation. Market segmentation refers to the process of classifying customers and prospects into groups with similar needs and purchasing behaviour (Morritt, 1997). The reason for segmentation of the hotel industry is to define the major types of demand, identify characteristics of customers as well as estimate future growth trends (D'Antonio, 2013). Market segments has to possess the following criteria; identifiable, measurable, significant, accessible and actionable (Samli, 2013). Segmentation has to be “post-hoc” whereby market research is done in order to identify market segments (Morritt, 1997). A company may choose on focusing on a single market segment or go for multiple market segments. The former is rare while the latter is common in order for the company to meet the diverse needs of different market segments.
Marriott focuses on multiple market segments. Thus, it is important to note that in order for Marriott to be successful in targeting customers through market segmentation, a proper market research has to be carried out. For this case study, we will look at how Marriott segmented the market through the market research that they have done to cater to the wide range of customers’ needs.
Market segmentation in Marriott
According to Morritt, (Morritt, 1997) in order for the hotel industry to target segments and niche markets, the segmentation variables that are put into focus are price segmentation, benefit segmentation, psychographic segmentation, demographic segmentation, usage segmentation, and special interest segmentation. Marriott managed to penetrate into the niche markets by targeting the right segments as mentioned by Morritt. We will look into each segment and the examples of brands under Marriott that classify under each segment.
Price segmentation refers to the segmentation of the product or services to cater to diverse economic segments of customers. The hotel industry had developed four price segments which are luxury, convention, first class and economy (Morritt, 1997). Marriott brands that target the luxury segment are The Ritz-Carlton, Bvlgari and J.W. Marriott...