Accor Hotel Case Study [PDF]

Zitiervorschau

MKT42290 - Digital Marketing Strategy & Campaign Planning

th

8 December 2016

Name: Gabriella De Domenico Student Number: 16204455 Master: Msc Digital Marketing (Full Time) Module: Digital Marketing Strategy & Campaign Planning (MKT42290)

Accor Hotels and the DigitalTransformation INDIVIDUAL ASSIGNMENT

Critically evaluate what the problems were for Accor Hotels, the importance of digital transformation & content, and how Olivier Arnoux developed his strategic plan of attack for enriching customer experiences through the power of digital marketing?

Outline: 1) Introduction 2) Accor Hotel profile - Competitive Landscape

3) Digital Disruption variables - New Actors - New Content - New Customer Journey

4) Main Problems assessment - The shift of power and the content challenge - SWOT Analysis

5) Strategic Plan Recommendations 6) Conclusions

Gabriella De Domenico – 16204455 – Third Individual Assignment

1

MKT42290 - Digital Marketing Strategy & Campaign Planning

th

8 December 2016

1) Introduction The French hotel chain Accor has a global presence and a long history, with almost four thousands hotels in the entire world and almost 50 years of experience. Accor has experienced diverse market changes throughout the last decades, shaping differently its Brand and targeting new market segments, and finally changing its leadership quite frequently since 2005. One of the biggest challenge currently facing concerns the digital transformation which has totally disrupted the hotel environment and changed the actors playing in the market and the behavior of the users. As a result, the customer journey is today totally transformed and involves numerous online platforms and new source of contents, which have made the customer more informed and powerful. Consequently, Accor needs to plan an innovative online and offline marketing strategy in order to add value to the customer experience and to emerge from the competitors. In the following analysis Accor Hotel strengths and weaknesses will be explored, and recommendations for the future marketing strategy will be assessed, taking into account the challenges offered by the digital era and the new external variables of the online customer journey.

2) Accor Hotel profile Accors is an hotel chain founded in Lille, France, in 1967, which experienced a great expansion of the market share throughout five decades, being currently present with 510,000 rooms in 92 countries in the world. Accor addresses three market segments: the Luxury market (16%) with Sofitel, The Sebel, Pullman, Mgallery and Grand Mercure brands; the midscale one (45%) with Novotel, adagio, Mamashlter and Mercure brand; and the economy/basic segment (39%), with Ibis

Gabriella De Domenico – 16204455 – Third Individual Assignment

2

MKT42290 - Digital Marketing Strategy & Campaign Planning

th

8 December 2016

and HotelF1 brands. It is worth of notice that the above mention structure differs from the market segmentation trends assessed in the hospitality sector (see following Exhibit 1).

Exhibit 1

After a long period of management changes, the CEO Sebastien Bazin introduced a more efficient “Asset light plan” for the company, establishing from 2013 the following business structure: 40% Manage hotels - 40% Franchised hotels - 20% Owned hotels. Competitive Landscape From the Accor’s competitor analysis emerged that competitors are the following worldwide, structured and global hotel companies: Starwood Hotels and Resort worldwide Inc., Marriott International Inc., Hilton Worldwide, InterContinental Hotel Group Plc and Wyndham Worldwide Corp. All the five brands performed strong business figures and long experience in the luxury, middle scale and budget market segments. An important variable is represented by the partnership network developed by each competitor with strategic company in the Tourism sector, as Airlines, Cruises lines, high profile Restaurant and travel Agencies.

Gabriella De Domenico – 16204455 – Third Individual Assignment

3

th

MKT42290 - Digital Marketing Strategy & Campaign Planning

8 December 2016

3) Digital Disruption Variables Nowadays the tourism and hospitality sector has been deeply shaped by the latest technological wave which have transformed the competitive landscape, the amount and the type of actors involved in the purchasing process as well as the consumer behavior. The phenomenon is not new, similar transformations have been experienced by other industries, and hotel one is currently facing an adaptation phase. The common disrupting factors are the introduction in the market of the sharing platforms, the mobile payment and the broad and fast connectivity opportunities, both for sellers and consumers. The main digital variables are going to be analyzed as follows: new actors in the market and new type of content production has influenced the customer journey in each phase.

New Actors

New Content

- OTA - Review sites -Social Media - Aggregate MetaSearch - Alternative Lodging Option

source

source

Hotel

User

Educational Content

Intent of Help other consumers (altruistic action) Sense of belonging to a community

(entertain)

Persuasive Content (convert)

Intent of improve the service/ revenge

COSTUMER JOURNEY Inspiration REACH

Comparison ACT

Booking

Travel & stay

CONVERT

Gabriella De Domenico – 16204455 – Third Individual Assignment

Review ENGAGE

4

MKT42290 - Digital Marketing Strategy & Campaign Planning

th

8 December 2016

New Actors The market is nowadays composed by new digital players which have affected negatively the former dominating role of the brick and mortar travel agencies. Social networsk as Facebook, Twitter and Instagram, now play a huge role in inspiring with visual content, engaging and informing consumers with reviews a useful guide content. Online Travel Agency (OTA) gave the opportunity to compare benefits and experiences of each hotels and book the best option; Metasearch sites have the aim of compare prices in the most transparent way, Review sites give the chance to read peer-to-peer comments and have some internal insights, Travel blogs and forum inspires the consumer about the whole journey and sharing platform as Airbnb does not represent a minor competitor, since it has overcome Marriott, Starwood and Hilton hotel chains in terms of capitalization of the market. As a consequence, Accor should apply a omnichannel approach in order to satisfying accurately each consumer need, in each phase of the purchase-cycle, through the right channel. New Content The rapid production and accumulation of content online is the second main digital variable which has a great impact on the customer journey. The online content production can be divided by two groups, depending of the source: the content produced by the Hotel and the content independently generated by the Users. The owned content has the aim of educate the audience about the hotel characteristics and benefit, with descriptions, photos, videos, available extra-services, engaging the target with added value information and emotional inspirations. On the other hand, the content could be also persuasive, orientated towards the conversion (i.e. transparent price list, promotional content, targeted deals).

Gabriella De Domenico – 16204455 – Third Individual Assignment

5

MKT42290 - Digital Marketing Strategy & Campaign Planning

th

8 December 2016

The content produced by the consumers has a crucial role because it involves the trust among users, which has always impacted largely the social dynamics andnespecially the consumer behavior. Authentic photographs and honest reviews are the main ingredient of the e-reputation of hotels. This phenomenon is driven by altruistic purposes, since users do not have a direct benefit from it, they post reviews in order to help other consumers feeling part of the community, on the one hand, and to share good and bad experiences in order to help the hotel to improve services or report a failure experience, on the other hand. New Customer Journey The above mentioned two variables affect the costumer journey in each phase. The consumer could be indirectly and direclty influenced by visual and descriptive content (photos, story-telling video and texts, “how to” guide, etc.) when the holiday destination has to be decided and the hotel still have to be booked. Travel Blog and Forums, as well as Social channels plays a great role during this inspiration phase. When the active research begins, the user will take advantage from OTAs and Metasearch site in order to read review, compare price and book the best offer. During this phase the user is driven by different need, not only price related, since the main concerns regard also the risk of choosing a poor quality option. Also social media play a role because can generate brand awareness and sense of loyalty towards a brand which is recognized by the community influencers. It is worth of notice that the booking through a third party sites has high commission costs for the hotel, which have the interest of keeping the consumer on the website after the first purchase through loyalty program. Finally during and after the staying period the hotel should encourage the consumer to give feedbacks and share positive reviews, engaging the user and apply remarketing tactics.

Gabriella De Domenico – 16204455 – Third Individual Assignment

6

MKT42290 - Digital Marketing Strategy & Campaign Planning

th

8 December 2016

4) Main Problems assessment Taking into account the above mentioned variables, Accor is facing numerous challenges because of the current digital disruption, and the main problem can be grouped as follows:

1.

The shift of power

Institutional trust has been substituted by peer trust: the consumer has gained power (see exhibit 2) and the company has to focus on a customer-centric approach transformation. The users have more information and can influence other users sharing experiences and comments, influencing negatively or positively the company reputation online.

Exhibit 2

2.

The content challenge

The great accumulation of content online comes from different sources, is posted on numerous channels, and is produced with different aims. Accor has to plan a digital marketing strategy able to tackle each of the following aspect: - Monitoring the bran reputation and receive the feedbacks - Producing content for each channel for each aim - Encouraging users to share positive experience

Gabriella De Domenico – 16204455 – Third Individual Assignment

7

th

MKT42290 - Digital Marketing Strategy & Campaign Planning

8 December 2016

SWOT Analysis

SWOT STRENGHTS - Global Presence - Target each Market Segment - Asset-light management - Good level of feedbacks

WEAKNESSES - Other players in the market have stronger partnership - Old Style feedback collection - Accor team is not incorporating digital variable into in the everyday duties - Online Information about the Brand are not completely under Accor control

OPPORTUNITIES - Leveraging the interaction and feedbacks with guests in order to improve the service - Encouraging satisfied and loyal customer to share the experience becoming influencers

THREATS - The market is highly competitive with strong push to innovate - New competitor with light asset costs, as Airbnb -Customer gaining more power

5) Strategic Plan Recommendations In order to complete the transformation towards a customer centric business, and tackle the first identified problem (the shift of power), firstly, Accor should use social channels and review site as a source of honest feedback in order to improve its product and service. Secondly, Accor should improve and leverage the loyalty programs, addressing each satisfied customer with personalized and targeted deals in order to encourage to use the owned booking platform on the website (saving commissions costs to OTAs), and to share the positive experience with other users. The content challenge should be tackled on each phase (Monitor, Produce, Encourage) addressing the consumer need with the right content and channel. Firstly, Social Media Listening activities should be put in place in order to monitor the ereputation. Secondly, the Accor staff should be trained in order to integrate digital capabilities and consume behavior understanding within the everyday duties.

Gabriella De Domenico – 16204455 – Third Individual Assignment

Thirdly,

8

MKT42290 - Digital Marketing Strategy & Campaign Planning

th

8 December 2016

each phase of the customer journey should be addressed with specific actions, targeting each stage with the content and the platform above mentioned.

6) Conclusions Accor is an established worldwide 50-years-experience hotel chain currently facing numerous digital challenges, represented by new actor in the market, as OTAs, Review site, Travel blogs and Social network and the rise of mobile connectivity, which have influenced the costumer journey in the hotel and tourism sector and shaped and empowered the customer. The competition has risen, with new actor as Airbnb, and the costs have grown due to the commission for third party websites. Accor’s needs are to assess an innovative online marketing strategy with the aim of enriching the customer experience and emerging from the competitors. After the analysis of the emerging digital threats and Accor Hotel strengths and weaknesses, two main problems have been identified: the shift of power and the content issue. For these reasons, Accor’s digital marketing strategy should be focused on two main aspects: on the one hand, Accor should adopt a customer-centric approach, integrating feedbacks and review and follow its e-reputation in order to improve the services. On the other hand Accor should put in place marketing tactics in order to Monitor (i.e. SML tools), Produce and Encourage content creation, in order to preserve the brand awareness.

Reference: Dubois D., InYoung C., Niessing J., Wee J., (2016) AccorHotels and the Digital Transformation: Enriching Experiences through Content Strategies along the Customer Journey, INSEAD

Gabriella De Domenico – 16204455 – Third Individual Assignment

9