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Marketing Audit and Marketing Objectives for Holiday Inn - Essay Example

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This essay "Marketing Audit and Marketing Objectives for Holiday Inn" presents Holiday Inn as an international hotel brand that serves more than 100 million customers annually and offers calm, relaxing, and convenient services to the guests…
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Marketing Audit and Marketing Objectives for Holiday Inn
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Marketing Audit and Marketing Objectives for Holiday Inn Executive summary Holiday Inn marketing audit andobjectives report will provide a in-depth analysis of the current strengths, weaknesses, opportunities and threats that are facing the company. Hotel Inn offers comfortable and calm relaxing environment and is currently the largest midscale hotel by number of rooms. The hotel chain has strong presence in USA and UK markets and is currently expanding its market in Asia. The hotel has benefited from talented employees who offer quality customer services and transformational leaders that are committed to offering differentiated services and expanding the brand globally. The report will highlight how Holiday Inn can utilise its strengths to exploit opportunities such as high growth in business and leisure travel, emerging Asian markets and advancements in technology in attaining its mission. The company should increase its market presence in Asia, increase the bed occupancy levels and offer additional physical evidence in its services. The hotel faces significant threats due to stringent visa and travel regulations due to diseases such as Ebola, possible terror attacks and high competition in the domestic market. Table of contents Table of contents: page number: 1.0 Introduction………………………………………………………………………….... 4 2.0 Internal environment (Strengths and weaknesses) analysis using people, process and physical evidence…………………………………………………………………………..…....5 3.0 External environment (Opportunities and threats) analysis using PESTLE ………………………………………………………………………………………....8 4.0 Summary of analysis results (SWOT).…………………………………………….… 12 5.0 Marketing objectives……………………………………………………………….....13 6.0 Conclusion …………………………………………………………..……………..…15 7.0 References…………………………………………………………………………….16 Marketing Audit and Marketing Objectives for Holiday Inn 1.0 Introduction Holiday Inn Inc is a global brand of hotels that forms part of InterContinental Group of Hotels and hosts more than 100 million guests annually (Russell & Cohn 2012). The hotel brand is recognised for its superior quality service, comfort and customer value since it offers differentiated services in its more than 1,200 hotels and 219,000 hotel rooms across world (InterContinental Hotels Group 2012 annual report, 2014). The Holiday Inn chain of hotels and resorts comprises of Holiday Inn, Holiday Inn Club Vacations, Holiday Inn Resort and Holiday Inn Express has grown to become the largest midscale hotel by the number of rooms (Lee 2007). The hotel chain offers high-rise and full size plat hotels and the low-rise and full-service hotels that offer additional customer services such as room service, exercise facilities, comfortable rooms and restaurants (Onkvisit and Shaw 2004). Most of the hotels are conveniently located in the major cities, airports, and roadways in order to cater for the business travel needs (Russell & Cohn 2012). The global hospitality industry has remained resilient despite the recent challenging economic conditions occasioned by the Eurozone crisis and financial crisis in USA and UK markets (Yu 2012). In 2012, the industry revenues per available room (RevPAR) increased by 4.5 percent in 2012 (InterContinental Hotels Group 2012 annual report, 2014). The hotel attained global reputation after being appointed the official partner for London 2012 Olympics and Paralympics games. The hotel chain has learning experience in the hospitality industry since it celebrated 60 years of existence in 2012 and opened the largest and stunning Holiday Inn Macao Cotai Central in China that has a capacity of 1,224 rooms (InterContinental Hotels Group 2012 annual report, 2014). Holiday Inn offers the guests a casual relaxation atmosphere and has strong market presence in Atlanta, London and Rio De Janeiro (InterContinental Hotels Group 2014). Holiday Inn is ideal for contemporary travelers who require relaxation hotel environment since the hotel provides convenience, familiar and reliable services that meet the guests’ needs (Proctor 2014). 2.0 Internal environment (Strengths and Weaknesses) analysis The SWOT (strengths, weaknesses, opportunities and threats) analysis is useful in understanding the internal environment of Holiday Inn. The strengths are the core competencies or resources that Holiday Inn can use to exploit the opportunities in the external market and control the adverse effect of the threats on the competitive advantage of the company. Clarke and Chen (2009) outlines that weaknesses are disadvantages or internal shortcomings that face the firm and have the potential of leading to decline in market share and negative brand reputation of Holiday Inn. Strengths Holiday Inn has various internal resource, capabilities and characteristics that will facilitate the attainment of the marketing objectives. A major strength of Holiday Inn is the high brand recognition and awareness since the hotel has more than 700 outlets in the US market and substantial number of hotels in the UK (InterContinental Hotels Group 2014). The Hotel has attained considerable market share in China midscale hotel industry and has outlined plans of future expansion (Bamford & West 2010). The hotels and resorts owned by Holiday Inn are conveniently located in high customer traffic areas such as airports, highways and shopping centers thus attracting a high number of guests (Hagele 2010). The hotel has existed for more than 60 years due to the high customer satisfaction and ability to enter emerging markets that offer high growth opportunities. Holiday Inn enjoys good reputation and customer loyalty since it is a member of InterContinental Hotels Group (IGH) that is globally recognised for their excellent services. The hotel is capable of sharing promotional resources with related franchises such as Crowne Plaza,l Holiday Inn Express, Holiday Inn Resort, EVEN Hotels, Staybridge suites, and Hualuxe since all the hotel brands are members of International Group of Hotels (InterContinental Hotels Group 2013 annual report, 2014). Holiday Inn is capable of easily penetrating new markets as evidenced by the recent opening of Holiday Inn Manhattan-Financial District that will cater for travelling guests and offer warm and contemporary design amenities that create relaxation environment for the customers (Harrison 2013). Holiday Inn has highly qualified employees that are able to offer customer-centred services and satisfy the unique needs of each customer (Daft 2011). The people strategy of the hotel aims at developing brand-hearted culture and strong leadership teams that will respond to changing hospitality needs in the market. Holiday Inn offers a great workplace that allows employees to exercise their creativity and recognises the employees’ efforts through celebrating the Service Week (Gill 2010). Another strength of the hotel is the secure environment for the guests, employees and visitors since the company has put in place health and safety procedures and policies that has minimised risks of injury while at the hotel surrounding (King 1995, p 223). Holiday Inn has established and maintained close working relationships and partnerships with contractors, lenders, suppliers and third-party intermediaries that are essential in providing consistent quality services to the guests (Aaker 2012). The good relationships have contributed to higher performance, good brand reputation and pleasant behaviours of the employees thus enhancing the competitive edge of the hotel in the hospitality industry (Bhattacharjee 2006). Holiday Inn has a preferred guest loyalty program that ensures guests earn rewards for their lodging and use of other services at the hotel (InterContinental Hotels Group 2013 annual report, 2014). The loyalty program is critical in attracting new customers and retaining existing customers since it offers discounts at the hotel and other selected partner companies such as airlines and fuel stations (Middleton and Clarke 2012). Holiday Inn has collaborated with various credit card companies to offer Holiday Inn credit card that offers additional benefits to the guests. Weaknesses The increased dependence on online travel agents for bookings will reduce the prices charged by Holiday Inn. According to Sanyal (2001), the guests have access to volumes of information offered by various websites search engines and online travel engine and thus driving sales will require the hotel to offer attractive discounts and loyalty points to its customers. The hotel relies on proprietary reservations system (HolidexPLus reservation system) that is linked to various sales channels, call centres, travel agents and third party intermediaries and thus Holiday Inn has no absolute control of the reservation system (InterContinental Hotels Group 2012 annual report, 2014). The failure by the third party technology providers and lack of investment in own system has the possibility of exposing customers’ confidential credit information and personal data and this could significantly affect the reputation of the hotel (Hudson 2008). Holiday Inn is a mid-scale brand thus does not cater for the needs of the high-end luxury customers and economy customers. The hotel is not ideal for luxury business and leisure customers who prefer luxury accommodation, private charters and yachts during their stay at the hotels next to ocean views (Peng 2011). Holiday Inn has strong market presence only in USA and UK markets and its success depends purely on the booming economic and stable political conditions prevailing in these two markets (Proctor 2014). In this case, the hotel brand will experience decline in revenues if US and UK economic growth stagnates or when the prevailing climatic conditions do not favour leisure travel. The company is facing a weakness of possible lawsuits due to breach of customer credit card confidentiality by the third party reservation software provider. There is a high possibility of employees disclosing personal data and confidential customer information that can lead to cyber fraud on the customer credit cards (Proctor 2014). Holiday Inn has not differentiated its service offering to its target customers thus the hotel is unable to create switching barriers to the customers (Proctor 2014). Although Holiday Inn is part of InterContinental Hotels Group (IHG), the target customers are incapable of differentiating the services offered by the hotel from those of related franchise chains such as Crowne Plaza, Hotel Indigo and Even hotels. The hotel chain is experiencing high operating costs due to inability to attain economies of scale in serving its customers (Peng 2011). The hotel has a high number of employees and its bed occupancy has remained low due to negative perceptions of being expensive. The company should increase the bed occupancy and control the high costs of operation in order to attain higher profits (Peng 2011). 3.0 External environment (Opportunities and threats) analysis-PESTLE analysis The PESTLE (political, economic, social-cultural, technological, legal and ecological) environment analysis is useful in identifying the macro-environment of hotel and resort industry in the UK. The PESTLE analysis outlines the opportunities and threats that exist in the market and how Holiday Inn can utilise its strengths to exploit the opportunities and minimise the threats facing the hotel brand (Proctor 2014). Opportunities The current political environment in the UK and USA is stable and thus Holiday Inn is capable of tapping the growing tourism market that is fueled by the recovery of the UK economy and sequent easing of Eurozone financial crisis. The hotel brand has the opportunity of n expanding its market presence in the fastest growing Asian market especially in China and Dubai. The Asian domestic economies are currently diversifying from the traditional oil-based economies to service economies due to growth in business travel and thus Holiday Inn should use its technical capabilities and market experience to expand its presence in China (Hemmington 2007, p 749). The United Arab Emirates offer high growth opportunities due to the booming infrastructure construction, the emergence of global financial centers and entry of multinational companies in the market and thus Holiday Inn should set up more hotels in that market. China has a high population and urbanisation will contribute to high demand of leisure hotels by the middle-income class and high-income citizens (Proctor 2014). China is the second largest economy and has demonstrated resilience against global financial recession and crisis due to its high trade balance, stable currency, high consumer income levels and consistent increase in the economic output that is fueled by booming infrastructure sector and tourism (Proctor 2014). Proctor (2014) asserts that the recent advancements in communication technologies have led to high usage internet technologies, smart devices, and high usage of the social media that are critical in digital marketing and reaching high number of potential customers. Holiday Inn can take advantage of internet advertising platforms and social media to create brand awareness and reduce the overall costs of promotion. Accordingly, the use of new technologies will enable the hotel brand understand the changing customer behaviours and preferences and offer services that cater for the customer needs (Prasad 2010). The company is capable of establishing a guest database and use technology to maintain customer relationships and make advance reservations thus improving the customer experience (Rarick 2004). Another opportunity that exists in the market is the high growth in tourism related travel due to changes in social-cultural attitudes. Woodside and Martin (2008) asserts that the global tourism has grown immensely due to desire to learn more about history, art, cultures and attain international travel experience. The growth in international tour and travel infrastructure and ecological conservation efforts in the UK has led to increase in the number of tourists interested in learning about ancient British traditions and lifestyles, art and other places of archaeological attractions. Holiday Inn should take advantage of this social-cultural trend to set up hotels near the places of tourism attraction in order to increase the number of bed occupancy (Page 2011). Holiday Inn has an opportunity of partnering with leading credit card companies and airlines in order to increase the customer base (Peng 2011). The company should implement Holiday Inn credit card in partnership with major financial institutions such as American Express, Barclays Bank and other leading airlines in order to attract international travelers through discounted hotel packages for paying using the cards (Peng 2011). Threats There are various threats in the external environment that may hinder the attainment of Holiday Inn’s mission, vision and objectives. The hotel is exposed to political, economic and financial market changes such as inflation, recession and currency fluctuations that may lead to decline in revenues and income (Han & Ryu 2009, p 504). The political unrests in Asian market and Euzone financial turmoil may affect the existing hotel business thus leading to decline in number of hotel occupancy. The economic crisis and currency movements reduce the demand for business and leisure travel. The hotel faces threats of reduced international and domestic travel customers due to high terrorism threats, civil unrests, epidemics like Ebola and natural disasters. Terrorism related threats lead to high fuel costs and transportation costs thus leading to decline in the volume of international business and leisure travelers in the US and UK markets (Lumsdon 1997). Accordingly, the high threats of Ebola disease outbreak in UK, USA and UK market has led to stringent travel requirements and closure of certain airline destinations thus affecting the ability to travel to US and UK (Proctor 2014). Holiday Inn faces harsh competition from other midscale hotels that offer similar services such as Hilton hotel, Ritz Charlton, Starwood hotels and resorts and Four Seasons Hotels (Chon 2012). The competitors have started offering value-added services such as free membership to health and fitness clubs, transport services to the nearest airports and discounted rates for longer stay in the rooms (Brassington & Pettitt 2006). The competition in the hotel industry is attributed to the high fixed costs, less service differentiation and high exit cost since the leading hotels have invested substantially in conventional buildings and facilities (Han & Ryu 2009, p 490). The social-cultural changes such as increase in higher education levels have led to growth in new consumer buying behaviours and preferences. The 21st consumer is difficult to understand and satisfy due to unique and personalised demands. In this case, it is difficult to segment guests depending on their social class, geography and income levels since the customers require physical evidence and value for their money after using the services (Hemmington 2007, p 753). Holiday Inn faces the threats of increased stringent regulatory due to the current global fears of outbreak of the deadly Ebola disease in UK. The hotel brand will have to put in health and safety measures that will ensure all guests are screened and have the necessary travel documents in order to control the threat of the disease. Accordingly, the increased health diet-consciousness across the UK due to increase in the number of diet-related diseases and sedentary lifestyles will force the company to upgrade their exercise facilities and ensure their menu has low-calorie and low-fat foods in order to attract high number of customers (Bohm 2009). 4.0 Results of analysis Strengths Weaknesses Opportunities Threats High brand recognition in USA and UK markets since it is part of InterContinental Group of Hotels (IGH) High dependency of proprietary reservations software Increased demand for business and leisure travel due to high growth in international tourists and global trade Possible, terror attacks, political turmoil and unrests in some markets Highly talented employees and excellent customer service Poor performance in high-end luxury market and economy market segments Attractive Asian market such as China and Dubai Stringent travel restrictions due to new diseases such as Ebola High physical evidence since the hotels offer convenience, comfortable and relaxing environment High dependency of traditional USA and UK markets for guests Advancements in hotel booking and reservation systems and high global internet penetration that will facilitate promotion High competition from other hotels such as Hilton, and Four Seasons hotel Good cash flow and learning experience Possible lawsuits due to breach of customer credit confidentiality and privacy High interest in tourism and leisure due to ecological and archaeological sites conservation Changing consumer attitudes and purchasing behaviours and new hotel service demands 5.0 Marketing objectives Effective marketing objectives must be specific, measurable, attainable, realistic and timely (SMART). The marketing objectives should be based on the situational analysis of the internal and external environment of the company. The company should use its strengths to eradicate its weaknesses and respond to threats in the industry. The company marketing objectives should aim at exploiting market opportunities that will enable the company compete effectively and attain higher market share in the industry. The first marketing objective of Holiday Inn should be increase its presence in emerging markets such as China and Dubai by increasing the number of hotels in those markets by 15 percent in the next five years. The Asian market offers great growth and profitability opportunities due the high growth in consumer revenues, good infrastructure and growth in tourism numbers and thus Holiday Inn should expand its presence in those markets. The hotel brand has huge financial resources and human talent thus it is possible to use its learning experience in the hospitality market to attain high market share in Asia (Ariffin & Maghzi 2012, 194). The second marketing objective for Holiday Inn is to increase the current bed occupancy by 25 percent in the next five years. The objective is specific and attainable since the global tourism travel numbers are increasing while the booming global economy will lead to increase in international business travels. Previous research by Bowie and Buttle (2013) has demonstrated that hotels earn most of their revenues from room occupancy and related services and thus Holiday Inn should focus on improving this aspect of its service offering. The advancements in online reservation systems and growth of social media can be harnessed to promote the hotel to millions of potential customers across the world. The hotels are located near airports and highways thus it is possible to attain this objective within the next five years. The third marketing objective of Holiday Inn is to extend the physical evidence of the services and provide additional benefits to consumers. Although Holiday Inn hotels offer calm, convenient and relaxing environment. The current consumers are interested in sleeping in stylish designed and modern architecture hotels that has attractive and appealing exteriors. The hotel industry in the UK is highly competitive and Holiday Inn should differentiate its service offering through using attractive lighting, ample parking lots, nice furniture, free cable TV connection, laundry services, cool music and air conditioning (Morritt & Weinstein 2012). The hotel can start offering related services such as free airport transfers, limousines rides and secretarial services for the guests (Lamb 2002). The hotel should position itself and promote its theme as the most convenient and comfortable hotel for business and luxury travels in order to differentiate its services from its competitors (Ariffin & Maghzi 2012, p 196). The fourth marketing objective of Holiday Inn is to diversify its service offerings to both the high-end luxury segment. Currently, Holiday Inn is a midscale hotel and is not ideal international high-end customers such as sports and music celebrities who desire exclusive hotel and resort services that offer more comfort, status and privacy. The current increase in the number of wealthy individuals across the world will lead to increased demand for high-end luxury hotel services (InterContinental Hotels Group 2014). 5.0 Conclusion Holiday Inn is an international hotel brand that serves more than 100 million customers annually and offers calm, relaxing and convenient services to the guests. The hotel has highly talented employees who offer superior customer management and able leadership that has guided the company in international expansion. The hotel marketing objectives should aim at increasing the new hotel openings in China and Dubai by 15 percent in the next five years due to the significant growth in infrastructure and business travel in these hospitality markets. The hotel should increase the bed occupancy by 25 percent from the current levels in the next five years since this business segment accounts for a huge percent of the hotel revenues and income. The hotel should also provide additional physical clues that will differentiate guest services such as free laundry, secretarial services and contemporary architecture designs that are appealing to the customers in order to control the threat of competition. The hotel should diversify its services to the high-end luxury customer segment in order to benefit from the increase in the number of wealthy individuals across the world. 7.0 References Aaker, D.A. 2012. Building strong brands. London: Simon and Schuster. Ariffin, A.M & Maghzi, A. 2012. ‘A preliminary study on customer expectations of hotel hospitality: influences of personal and hotel factors’, International journal of hospitality management, Vol 31, Issue 1, pp 191-198. Bamford, C.E & West, P.G. 2010. Strategic management. New York: Cengage Learning. Bhattacharjee, C. 2006. Services marketing concepts, planning and implementation. New Delhi: Excel Books. Bohm, A. 2009. The SWOT analysis. Muchen: GRIN Verlag. Bowie, D & Buttle, F. 2013. Hospitality marketing. London: Taylor & Francis. Brassington, F & Pettitt, S. 2006. Principles of marketing. London: Prentice Hall. Chon, K.S. 2012. The growth strategies of hotel chains: best practices by leading companies. New York: Routledge. Clarke, A & Chen, W. 2009. International hospitality management. New York: Routledge. Daft, R.L. 2011. Understanding management. Mason, OH: South-Western Cengage Learning. Gill, R. 2010. Theory and practice of leadership. London: Sage Publications Ltd. Hagele, K.C. 2010. International management. Muchen: GRIN Verlag. Han, H & Ryu, K. 2009. ‘The role of the physical environment, price perception, and customer satisfaction in determining customer loyalty in the family restaurant industry’, Journal of hospitality and tourism research, Vol 33, no. 4, pp 487-510. Harrison, A.L. 2013. Business environment in a global context. Oxford: Oxford University Press. Hemmington, N. 2007. ‘From service to experience: understanding and defining the hospitality business’, The service industries journal, Vol 27, no. 6, pp 747-755. Hudson, S. 2008. Tourism and hospitality marketing: a global perspective. London: Sage. InterContinental Hotels Group. 2014. ‘Annual Report 2012’, Accessed on 31st October, 2014 from www.ihgplc.com/files/reports/ar2012/docs/IHG_Report_2012.pdf. InterContinental Hotels Group. 2014. ‘Annual Report 2013’, Accessed on 31st October, 2014 from http://www.ihgplc.com/index.asp?pageid=56&data=Reports#ref_reports. King, A.C. 1995. ‘What is hospitality?’ International journal of hospitality management, Vol 14, no. 3, pp 219-234. Lamb, C.W. 2002. The subject is marketing. London: Nelson Thomson Learning. Lee, J. 2007. Brand extension in the upscale hotel industry; conceptual model, industry trends and consumer perceptions. London: ProQuest. Lumsdon, L. 1997. Tourism marketing. London: International Thomson Business Press. Middleton, V.T.C & Clarke, J.R. 2012. Marketing in travel and tourism. New York: Routledge. Morritt, R & Weinstein, A. 2012. Segmentation strategies for hospitality managers: target marketing for competitive advantage. New York: Routledge. Onkvisit, S and Shaw, J.J. 2004. International marketing: analysis and strategy. London: Psychology Press. Page, S. 2011. Tourism management: an introduction. New York: Routledge. Peng, M.W. 2011. Global business. Mason, Ohio: Cengage Learning. Prasad, V. 2010. Business environment. New Delhi: Next Generation. Proctor, T. 2014. Strategic marketing: an introduction. New York: Routledge. Rarick, C.A. 2004. Cases and exercises in international management. Bloomington: Russell, J & Cohn, R. 2012. SWOT analysis. Oxford: Oxford University Press. Sanyal, R.N. 2001. International management: a strategic perspective. London: Prentice Hall. Woodside, A.G and Martin, D. 2008. Tourism management: analysis, behaviour and strategy. Cambridge: Cambridge University Press. Yu, L. 2012. The international hospitality business: management and operations. New York: Routledge. Read More
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