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Situation Analysis

Describe about marketing strategies of Travelodge?

Travelodge is a private company, which operates in the hotel industry all through the United Kingdom. Travelodge is ranked the second largest in the economy hotel sector and it is also the third largest hotel in terms of rooms it has. Travelodge has 31,600 rooms in its hotel as per the data until 2010. The United States operation and the United Kingdom of Travelodge have separate operations. In 1980, Lord Forte bought it and again opened a branch in Britain. It owns 380 branches in United Kingdom, Ireland, and in Spain. The hotels in total have 20,000 rooms due to which it has become the third largest hotel chains in the United Kingdom. It has an employee number of 5500. The company claims that 16.5 million visitors stayed in their hotels in the past year. Mostly all the reservations are done through online mode.

The situation analysis of Travelodge will include an analytical study of its Micro and Macro environment. Situation analysis will also reveal the internal and service description. Out of all the marketing mix product, place, price, promotion Travelodge emphasizes on price. It has attained market leadership only because of this factor of pricing (Clow & Baack, 2012).

1. Economic: Travelodge is a budget hotel with many facilities like a 3 star hotels. This is benefitting the company. The economy can make a little impact even if the economy is at crisis, Travelodge is certain to make profits.

2. Environmental: The company has faced many complaints as being non-environment friendly. In the year 2007, the Hotel was also penalised for contributing to air pollution by emitting carbon by excessive usage of air conditioners in the hotel rooms. The company has to take certain steps regarding this. This can be preceded by being cautious in their energy consumption (Dahlstrom, 2011).

3. Technological: The change in technology does not have a big impact on the company as it is not and IT enabled company. The technology that they are using is just by using laptops, computer, and the amenities in the rooms (Kotabe & Helsen, 2011).

4. Political: The employees in the industry are demanding some changes in the working conditions, protection of the employees and legislations but Travelodge has a lower rate of turnover and the employees are more loyal to the customer. The political environment affects the business organizations. Travelodge will be affected by the legislations taken by the Government. The political factors affect the business of the hotel industry. But UK is a relatively free market economy and the Government measures are in favour of the private sector. The political factors are favourable for the growth of Travelodge. However the introduction of Digital Economy Act of 2010, the parliament has introduced several measures to reduce the illegal activities using internet. This may put the hotel industry in a disadvantageous situation as most of the hotels offer internet connection free of cost to the clients.


1. Customers: Travelodge has a very long list of happy and satisfied customers. It offers a wide range of packages for its rooms. They also promote their facilities of available rooms with convenient booking system.

2. Competition: Despite of the unstable nature of the economy, Travelodge has maintained itself to be one of the major economic hotels in the United Kingdom and Ireland. It has partnership with many other firms like the Diners club, Virgin wines etc which gives the customers discounts and this is what differentiates it from its competitors and gives it an edge over them.

3. Employees: The Company has a good line of working professionals. The middle level employees are mostly from hospitality background. The efficiency of their employees has taken the company to this height (Kotler & Keller, 2012).

4. Publics: Travelodge has a complete website, which is a medium for their marketing. On the website, Travelodge promotes their services, information of their Green programme in order to become an environmentally friendly company (Kotler & Keller, 2012).

Strength:

1. The rooms are affordable and in good condition which attracts customers easily. These affordable prices are its main marketing strategies. These strategies attract the customers every year. The company claims that around 16 million people stay in the Travelodge hotels every year.

2. It offers its Business account card for its business travellers and it offers convenient and fast booking to them (Sheehan, 2011).

3. The company is also committed towards maintaining a clean and healthy environment. Travelodge has spent an amount of £25 million on advertisement to inspire the people of Britain to maintain a healthy environment (Dines, 2014).

Weakness:

1. Travelodge does not provide its customers with room service, porter service or a concierge service. This is a shortcoming of a budget hotel.

2. The hotels are not ideal for parties or functions. They are typically travellers oriented and do not focus to expand.

3. The hotels are not so well decorated and aesthetic. This is because the rents are less. This does not mean that the hotels are filthy. They are well furnished and up to date.

Threats:

1. There are other economic hotels too with better facilities at the same cost in Britain. The customers can get attracted to those hotels too. The competition is too high in the industry.

2. Travelodge has an image to accommodate customers with less budgets but the economy is trending upwards and people are earning more which in turn has made them rent good and luxurious hotels. This can be a threat to the organization.

3. The company focuses only on the travellers with low budget and less stay. They do not have any plans to expand the nature of the business. They do not want to diversify or change the nature of the services.

Macroenvironment

Opportunities:

1. The company can expand in abroad. They are focussed only in the U.K/ Ireland. They should try to focus on other European market because the travellers from all round the globe come to visit other countries in Europe.

2. Although, the company has many partnerships with other firms but in expanding such relations the firm will not lose anything. It would be very profitable for the company to expand its partnership with other firms.

Travelodge is the second largest hotel chain in the United Kingdom. Premier inn is its first and Holiday inn is the second big competitor. Travelodge has very innovative services. The low and affordable prices are its main marketing strategy. It satisfies its customers by providing good value to the money that they put in Travelodge (Travelodge.co.uk, 2015). Premier inn also has the same range of services at the same prices but in addition to that, Premier inn also plans trips for it foreign tourists which neither Travelodge nor Holiday inn does for its customers. The frequency of advertisements of Premier inn and Holiday inn are also more than Travelodge. However, Travelodge make very attractive and customer oriented advertisements

The competitor analysis can be done by using the Porter‘s model.

The degree of rivalry – The rivalry and competition is fierce in the hotel industry in UK. Travelodge receives tough competition from Premier Inn, Holiday Inn and other hotel chains in UK. Travelodge has been competing with them for long period.

Threat of entry – Travelodge has been in the hotel industry for several years. Although the hotel industry in UK is a lucrative business, it is tough for the new hotel chains to establish themselves. A new entrant will not be able to establish themselves as big players.

Threat of substitutes – Travelodge uses recreational vehicles in order to establish itself in the hotel sector in UK. But Travelodge faces the threat from the substitutes. The customers may search for cheaper alternatives. But Travelodge offers high standard service at cheap prices. Thus the threat of substitute is low.

Buyer power – The power of the buyer is low in Travelodge since it offers accommodation at cheap prices. Thus the bargaining power of the buyer is less as they are satisfied with the pricing strategy of Travelodge (Grundy, 2006).

Supplier power - The power of the supplier in the hotel industry is low as the supplier do not have autonomy. There are large numbers of suppliers and there is big competition among the suppliers so the bargaining power is low (Karagiannopoulos, Georgopoulos and Nikolopoulos, 2005).

 The marketing strategy of Travelodge mainly focuses on promotion of its main features and specialities. The company focuses on good facilities at very affordable and low prices. This attracts the tourists because they provide good facilities at a cheap rate. The promotion of its cheap rates has made it possible to attract foreign tourists too. There are other hotels too with same facilities and prices but differentiates it from them are its promotion activities and customer relationships. The relationship with the customers makes the trip memorable for the tourists (Travelodge.com, 2015).

Microenvironment

The 7 P’s of marketing model can be used to analyse the marketing strategies of Travelodge.

Product – The need of the customers can be met by offering valuable products to the customers. Travelodge can increase the number of rooms available currently for the customers in order to address to their needs. They have planned to open new chains of hotels across UK in order to meet the expectations of the customers. Digital communication can be introduced by Travelodge so that the customers can book a seat in the restaurant with a single click using the help of digital media. For this purpose the website of Travelodge has to be developed. The website should display the necessary information regarding the bookings in the restaurant.

Price – Travelodge operates in a highly competitive market in UK. There are a chain of well established hotels in UK. Thus Travelodge has to maintain a competitive pricing strategy in order to increase the market share. The price currently offered by Travelodge is lucrative and is value for money for the customers (Ivy, 2008).

Place – One of the best ways to attract maximum customers is to Travelodge is by placing itself in the convenient places in UK. The new chain of hotels can be established near the tourist places in UK. The use of internet and mobile technology to book the hotels has to be enabled. The customers will be able to gain better access to the hotel. This will improve the market share of Travelodge.

Promotion – Travelodge will be able to attract potential customers by using new and innovative ways of sales promotion. This will build a positive reputation of the hotel. Social media can be used as an effective platform for the promotional activities. This will increase the sales of the hotel. The discounts offered by the hotel during lean season have to reflect in the advertisements. This will help Travelodge to maintain its business even during lean periods and during peak seasons.

People – The service industry relies on the customers. Thus in order to satisfy the customers, the best services has to be provided to them. The staff members are responsible for providing best service to the customers. Travelodge must train the staff members so that they provide best service to the customers (Ciriković, 2014).

Physical evidence – Travelodge maintains a well decorated interior in their hotel chains at present. They can introduce new ways in which to decorate their interior. This will remove the monotony of the hotel and the customers will be lured by the interior decoration of the hotel. The hotel rooms should meet each and every need of the customers so that it is a luxurious experience for the customers at Travelodge (Yoo, Donthu and Lee, 2000).

Process - Travelodge must follow a certain guideline to maintain the process of their hotel. There must be specific schedules and routines that have to be followed by each staff member towards their clients. The staff members at Travelodge have to be trained effectively so that they are aware of the guidelines. The maintenance of the process is an important factor for deriving customer satisfaction. This will generate good will for Travelodge. Each and every aspect of the process of Travelodge has equal importance. Travelodge must take regular feedback from the customers for process improvement (Andereck, 2009).

SWOT Analysis

Travelodge has segmented its customers in two major parts. The market for Travelodge canbe segregated into the families, business users. The families will visit Travelodge with their relatives and friends. Travelodge may be a place for relaxing after a long journey. Thus it has to meet the need of the customers according to their requirements. The place of location of Travelodge becomes an important aspect in such case. It has to locate itself near the important tourist spots. This will ensure maximum customers in the hotel. During lean season discounts can be offered in order to maintain the inflow of customers to avoid loss. The rooms of the hotel must be separately made for families and couples. There must be separate television in each room. Other amnesties that can be provided in the rooms include machines to make tea and coffee, news paper (Palmer, McMahonâ€ÂBeattie and Beggs, 2000). The atmosphere must be friendly. The staff members have to be cordial with the families so that feel safe and have a pleasant time in the hotel.  This is Families and business customers. Those families that look for leisure holidays, on the other hand, the business customers look for accommodations at a cheap rate near the business offices. The business customers prefer Travelodge because they do not have to live in the hotel for the whole day they just need to accommodate themselves for spending nights (Bowie and Buttle, 2004). For the business users, providing luxury to the clients is the principal aspect. This can be met by providing rooms to the business people with luxurious and comfortable beds. The other necessary amnesties have to be available in the room. This will generate good will for the customers. More business users will opt for Travelodge for their business meetings. The restaurant facilities at the restaurant must be able to meet the need of the customer (Cai and Hobson, 2004). They are busy with their work and taking an expensive hotel will not be of any use. For families, Travelodge provides them a good short stay facility and it connects nationwide motorways in towns and cities. Travelodge hotels are also located near tourist attractions and scenic beauty (Winer & Dhar, 2011).

Conclusion:

The marketing strategies implied by Travelodge are excellent and its customer following is amazing. The company has believed upon its idea of sticking to its roots. The company does not focus on diversifying right at the moment. There many scopes to expand in the global market. The European market is full of tourist and the company can focus on capturing them. There are strong competitors in the market but the scope of development still lies around the corner. The main marketing strategy of the company is affordable pricing. This pricing has led the company attain such heights in the list of small budget hotels.  The services of the company are excellent at such cheap rates and the company claims to benefit from the investment of 223 million euros and grow its business.

References

Andereck, K. (2009). Segmentation Strategies for Hospitality Managers: Target Marketing for Competitive Advantage. Annals of Tourism Research, 36(1), pp.155-156.

Bowie, D. and Buttle, F. (2004). Hospitality marketing. Amsterdam: Elsevier Butterworth-Heinemann.

Cai, L. and Hobson, J. (2004). Making hotel brands work in a competitive environment. Journal of Vacation Marketing, 10(3), pp.197-208.

Ciriković, E. (2014). Marketing Mix in Tourism. Academic Journal of Interdisciplinary Studies.

Clow, K., & Baack, D. (2012). Cases in marketing management. Thousand Oaks, Calif.: SAGE.

Dahlstrom, R. (2011). Green marketing management. Mason, Ohio: South-Western / Cengage Learning.

Grundy, T. (2006). Rethinking and reinventing Michael Porter's five forces model. Strat. Change, 15(5), pp.213-229.

Ivy, J. (2008). A new higher education marketing mix: the 7Ps for MBA marketing. International Journal of Educational Management, 22(4), pp.288-299.

Karagiannopoulos, G., Georgopoulos, N. and Nikolopoulos, K. (2005). Fathoming Porter's five forces model in the internet era. INFO, 7(6), pp.66-76.

Kotabe, M., & Helsen, K. (2011). Global marketing management. Hoboken, N.J.: Wiley.

Kotler, P., & Keller, K. (2012). A framework for marketing management. Boston: Prentice Hall.

Kotler, P., & Keller, K. (2012). Marketing management. Upper Saddle River, N.J.: Prentice Hall.

Palmer, A., McMahonâ€ÂBeattie, U. and Beggs, R. (2000). A structural analysis of hotel sector loyalty programmes. Int J Contemp Hospitality Mngt, 12(1), pp.54-60.

Sheehan, B. (2011). Marketing management. Lausanne, Switzerland: AVA Pub.

Travelodge.co.uk,. (2015). Travelodge | Cheap hotels throughout the UK & Ireland. Retrieved 13 March 2015, from https://www.travelodge.co.uk/

Travelodge.com,. (2015). Travelodge Hotels and Motels | Great Deals, Cheap Rooms & Rewards. Retrieved 13 March 2015, from https://www.travelodge.com/

Winer, R., & Dhar, R. (2011). Marketing management. Boston: Prentice Hall.

Yoo, B., Donthu, N. and Lee, S. (2000). An Examination of Selected Marketing Mix Elements and Brand Equity. Journal of the Academy of Marketing Science, 28(2), pp.195-211.

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