The Ritz Carlton: Service, Product, And Location

Their main areas of focus: service, product, and location

The model of Ritz Carlton is divided into three main areas: service, product and location.  They are well- known for their service which is the “ladies and gentlemen serving ladies and gentlemen”. Buildings and rooms are ensured to look perfect, starting from decorations to private baths, which costs them around $500,000 or more. Lewis (2014) mentioned that they find the best possible locations to satisfy customers with luxury demands. The Mariott International (2015) has stated that the purpose of Ritz Carlton is to promote the publicizing quality strategies that are successful quality awareness, and the quality of companies’ achievements.

The Ritz Carlton (2018) has mentioned that they have expanded to Singapore in 1996 and named their branch in Singapore as “The Ritz – Carlton, Millenia Singapore (RCMS). It was owned by the Pontiac Land Group and was managed by the Kwee brother, where there is a 32 floor high – rise luxury and leisure hotel. It has a total of 608 guest rooms and suites along with 2 panoramic view of Marina Bay and Kallang.

In this portfolio, the research will be based on both primary and secondary methods. The secondary method is used to research the company background, in order to have a better understanding about them. It is also used to do a research on the existing business positioning strategy and the future development plans of the hotel. A primary research has been done on the business operation and the services of the hotel.

Target market is where each of the market segments are being evaluated on their attractiveness, and will the selected segments will enter. Ritz Carlton starts off by targeting the four main segmentations, which includes personal travels like luxury and spas, weddings, special celebrations, business professionals, and residences and club. What consumers look for in hospitality are based from these four categories. To promote the products Ritz-Carlton has to offer, consumers are directed to a specific page depending on the groups available at the top of the website. It also gives information regarding the benefits of each of the amenities when a guest chooses to stay at Ritz-Carlton. In terms of marketing, Lewis (2014) has mentioned that the Ritz – Carlton uses several outlets and social media to connect with the customers for each segment.

The Ritz – Carlton(2018) has mentioned that they have a lot of strengths that includes brand image, gold standards, outstanding service and passionate employees. Their brand image is a major factor on their success, and its brand image was recognized around the world as the top luxury hotel chain that has amenities and high quality room offered, has an unbeatable customer service and superior locations. Both guests and employees are benefited from this service, as employees are more passionate and feel empowered when doing their jobs. This will make the experiences of the guests to be unforgettable.

Lewis (2014) stated that although the brand image of Ritz – Carlton is the major factor for them to be successful, it also disadvantages them by the costs for maintaining their brand image and it could discourage potential consumers. Arias (2016) has mentioned that since the Ritz – Carlton is a luxury hotel, spending the night there will cost starting from $500 to $10, 000 per night, which costs more expensive than they should be. Therefore, Lewis (2014) mentioned that the Ritz – Carlton needs to continue setting high standards on their brand and create more values for the guests, for them to stay being competitive. Other than that, employees need to have high-standards when hired. Therefore, Arias (2016) mentioned that it can be stressful as most employees might not match with their standards.

Target markets and marketing strategies

Arias (2016) stated that the opportunities of Ritz – Carlton involves in attracting new guests through adding the spa facility to existing and to new locations, through promoting and improving of the hotel security, by enhancing and expanding their corporate social responsibility, opening of new hotels in undeveloped countries and through sponsoring of events.

Arias (2016) mentioned that the Ritz – Carlton faces threats like pricing wars and tougher competitions from companies like Four Seasons Hotels Inc., Starwood Hotels & Resorts Worldwide, Inc and etc. Ritz – Carlton had a huge impact, for being a worldwide economic recessions, on profits and revenues when the vacancy rate increases because of guests travel cuts. It also increases terrorism threats which became a problem to the hospitality industry. Therefore, it directly and negatively affects the ability of Ritz – Carlton to generate the revenues.

In Singapore, the Ritz – Carlton was considered as a famous and a comprehensive hotel, where their main product has accommodation, catering, conference meeting venues, foodservice and Spa. What makes Ritz- Carlton famous in Singapore and in the region is because they draw guests with their supporting services and a complete variety of augmented services.

For their facility products, they have over 35 000 square feet of space for meeting that are equipped with the recent conference equipment.  The guest rooms are equipped with an exclusive bathroom along with iconic octagonal windows, or also known as Feng Shui. This hotel is the La Mer and the first cooperative hotel in the Asia Pacific region. It has 24 hours of outdoor swimming pool facilities and gym. Each guestroom and public area has a high speed and free internet access with 1Gbps bandwidth. It provides catering services and conference meeting venues. This hotel also has a gift shop that sells costumes, crystal utensils, designer jewelry and several signed items of Ritz – Carlton.

advertising team is prohibited to market to any companies for the hotel to maintain its brand standard. Their strategy is to not making mistakes when collaborating with some marketing channels. Arias (2016) mentioned that the company uses email promotion, advertisements on some magazines and their private magazine; like advertising network, as their marketing tool instead of utilizing televisions. The Ritz – Carlton (2018) mentioned that their company uses rewards programs for their loyal customers to promote and as partnerships with companies like Neiman Marcus and JP Morgan Chase & Co, collaborating for their products to be advertised.

Arias (2016) mentioned that the company stays committed to their service and follows a brand standard which benefits them through positive customer ratings, a lot of high – ranking rewards and Word – To – Mouth marketing. Therefore, Ritz – Carlton will not have to spend too much on advertising through mass media channels compare to those companies that advertised through those channels.

If the Ritz – Carlton hotel holds events like Formula One Race or tourist peak, the price of the room will increase tolerably.  Nevertheless, Ritz – Carlton will have to offer promotions and discounts if it encounters a low occupancy rate. The prices of the room are divided into double or single occupancy, that exclude taxes, fees, tips, etc., which are not for groups or other offers are not to be combined with, appointment should be made beforehand, and it is not for reward exchange.

The Ritz – Carlton, Millenia Singapore (RCMS) is located at 7 Raffles Avenue, which is known to be at the heart of the Marina Bay in Singapore. This hotel is also close to the Skyscrapers of Singapore, the Museum of Arts and Sciences, and the Esplanade. Those are some of the tourist attraction in Singapore where Ritz – Carlton is located close to them. This location is convenient for the guests.

Based on Philip (2013), the differentiation strategy was known to be where the company decides on a product attribute to put their focus on. For this strategy to work, the company needs to select an attribute that has a huge section in the market care that is enough for their products to be paid at a premium price. This strategy allows some products to co – exist if they are being focus on different attributes. Therefore, the company should make sure that they charge at an enough premium price which covers the focusing costs for chosen attributes. If the market did not value their chosen attributes highly enough, they will be likely to be at below average returns.

Tulldahl (2012) has mentioned that the feature of differentiation, the company could deliver the product that is from the functionality perspective, and the product that looks quite similar compared to their competitors. In this case the differentiation features comes from the product feature instead of the fundamental functionality. As an example, this might include attributes like brand, price or quality. These days, the luxury hotel chain of the Ritz – Carlton has become famous for its outstanding service and is shown to be an example on how it effectively leverages the service with the mean of differentiating with another commoditized product.

The Ritz – Carlton (2018) mentioned that their Gold Standards has established necessary series of statements which defines which type of company it wants to be and containing several elements which outlines the significance of an outstanding service. Under the Gold Standards, there are the 6^th Diamond, Employee Promise, Motto, Three Steps of Service, Service Value, and the Credo. One of the Credos that were written in the Gold Standards is the aim of the service concept to be cleared:

“We pledge to provide the finest personal service and facilities for our guests who will always enjoy a warm, relaxed, yet refined ambience. The Ritz-Carlton experience enlivens the senses, instills well-being, and fulfills even the unexpressed wishes and needs of our guests.”

In Ritz – Carlton, the employees will need to gather for around 15 minutes for the ‘line-up’ daily. This was done to resolve any possible matters, and is also used for as an effective vehicle for implementing and improving the service concept. Daily, the Ritz – Carlton will update on their page about the new success story. The story posted will be describing about the employees that have made outstanding efforts when delivering an exceptional service for the Ritz – Carlton guests.

Their main areas of focus: service, product, and location

The Ritz-Carlton Hotel Company, L.L.C., of Chevy Chase, Md., operates over eighty – five hotels currently, in Africa, America, Asia, the Caribbean, and the Middle East. There are over thirty hotels and residential projects under development around the world. It is located at prime destinations around the world, offering luxury hotels where it sets high standards along with superior service for the hospitality industry.

The model of Ritz Carlton is divided into three main areas: service, product and location.  They are well- known for their service which is the “ladies and gentlemen serving ladies and gentlemen”. Buildings and rooms are ensured to look perfect, starting from decorations to private baths, which costs them around $500,000 or more. Lewis (2014) mentioned that they find the best possible locations to satisfy customers with luxury demands. The Mariott International (2015) has stated that the purpose of Ritz Carlton is to promote the publicizing quality strategies that are successful quality awareness, and the quality of companies’ achievements.

The Ritz Carlton (2018) has mentioned that they have expanded to Singapore in 1996 and named their branch in Singapore as “The Ritz – Carlton, Millenia Singapore (RCMS). It was owned by the Pontiac Land Group and was managed by the Kwee brother, where there is a 32 floor high – rise luxury and leisure hotel. It has a total of 608 guest rooms and suites along with 2 panoramic view of Marina Bay and Kallang.

• Methodology

In this portfolio, the research will be based on both primary and secondary methods. The secondary method is used to research the company background, in order to have a better understanding about them. It is also used to do a research on the existing business positioning strategy and the future development plans of the hotel. A primary research has been done on the business operation and the services of the hotel.

2. Business Positioning Strategy

• Target Market

Target market is where each of the market segments are being evaluated on their attractiveness, and will the selected segments will enter. Ritz Carlton starts off by targeting the four main segmentations, which includes personal travels like luxury and spas, weddings, special celebrations, business professionals, and residences and club.

What consumers look for in hospitality are based from these four categories. To promote the products Ritz-Carlton has to offer, consumers are directed to a specific page depending on the groups available at the top of the website. It also gives information regarding the benefits of each of the amenities when a guest chooses to stay at Ritz-Carlton. In terms of marketing, Lewis (2014) has mentioned that the Ritz – Carlton uses several outlets and social media to connect with the customers for each segment.

• Competitor Analysis

Among the most significant competitors of the Ritz Carlton company such as Hyatt, Hilton, Accor Hotel is on the top. The Accor Hotels is the only hotel groups recently that is present in all the market segments. This group fulfills all the special treatment, comfort, leisure and services that the customers need. The annual revenue the group earns by serving in the hotel industry is $ 3.9B and almost 250,000 employees work over here. Sebastien Bazin is he chairman and CEO of the company. The group is so popular that it has more than 62.9 K followers on Facebook and Twitter.

Target markets and marketing strategies

The group is adopting sustainable development initiatives such as child protection, engaging in local development, advocate fight against epidemics, promote balanced nutrition for the workers of the company, the host communities and the customers. The group is also stepping towards spreading environmental awareness, AIDS and malaria protection awareness which makes them unique from the other hotel companies in the industry (Accorhotels.group, 2018).

• SWOT Analysis

• Strength

The Ritz – Carlton(2018) has mentioned that they have a lot of strengths that includes brand image, gold standards, outstanding service and passionate employees. Their brand image is a major factor on their success, and its brand image was recognized around the world as the top luxury hotel chain that has amenities and high quality room offered, has an unbeatable customer service and superior locations. Both guests and employees are benefited from this service, as employees are more passionate and feel empowered when doing their jobs. This will make the experiences of the guests to be unforgettable.

• Weaknesses

Lewis (2014) stated that although the brand image of Ritz – Carlton is the major factor for them to be successful, it also disadvantages them by the costs for maintaining their brand image and it could discourage potential consumers. Arias (2016) has mentioned that since the Ritz – Carlton is a luxury hotel, spending the night there will cost starting from $500 to $10, 000 per night, which costs more expensive than they should be. Therefore, Lewis (2014) mentioned that the Ritz – Carlton needs to continue setting high standards on their brand and create more values for the guests, for them to stay being competitive. Other than that, employees need to have high-standards when hired. Therefore, Arias (2016) mentioned that it can be stressful as most employees might not match with their standards.

• Opportunities

Arias (2016) stated that the opportunities of Ritz – Carlton involves in attracting new guests through adding the spa facility to existing and to new locations, through promoting and improving of the hotel security, by enhancing and expanding their corporate social responsibility, opening of new hotels in undeveloped countries and through sponsoring of events.

• Threats

Arias (2016) mentioned that the Ritz – Carlton faces threats like pricing wars and tougher competitions from companies like Four Seasons Hotels Inc., Starwood Hotels & Resorts Worldwide, Inc and etc. Ritz – Carlton had a huge impact, for being a worldwide  economic recessions, on profits and revenues when the vacancy rate increases because of guests travel cuts. It also increases terrorism threats which became a problem to the hospitality industry. Therefore, it directly and negatively affects the ability of Ritz – Carlton to generate the revenues.

• Product Positioning

The term product positioning refers to the qualities that distinguish the company product or services from services that the competitors offer to the customers. It is the position where the company product or services fit in. The well reputation of a company service enables them to pose in a broader success scale. The Ritz Carlton company communicates properly with their customer via their personal magazines, social media sites to make them aware of their newly launched products and services. They have a great social media presence and their cost-friendly services attract the customers more than other companies (ritzcarlton.com, 2018).

• Marketing Mix

• Product

Strengths and weaknesses of Ritz Carlton

In Singapore, the Ritz – Carlton was considered as a famous and a comprehensive hotel, where their main product has accommodation, catering, conference meeting venues, foodservice and Spa. What makes Ritz- Carlton famous in Singapore and in the region is because they draw guests with their supporting services and a complete variety of augmented services.

For their facility products, they have over 35 000 square feet of space for meeting that are equipped with the recent conference equipment.  The guest rooms are equipped with an exclusive bathroom along with iconic octagonal windows, or also known as Feng Shui. This hotel is the La Mer and the first cooperative hotel in the Asia Pacific region. It has 24 hours of outdoor swimming pool facilities and gym. Each guestroom and public area has a high speed and free internet access with 1Gbps bandwidth. It provides catering services and conference meeting venues. This hotel also has a gift shop that sells costumes, crystal utensils, designer jewelry and several signed items of Ritz – Carlton.

• Promotion

The advertising team is prohibited to market to any companies for the hotel to maintain its brand standard. Their strategy is to not making mistakes when collaborating with some marketing channels. Arias (2016) mentioned that the company uses email promotion, advertisements on some magazines and their private magazine; like advertising network, as their marketing tool instead of utilizing televisions. The Ritz – Carlton (2018) mentioned that their company uses rewards programs for their loyal customers to promote and as partnerships with companies like Neiman Marcus and JP Morgan Chase & Co, collaborating for their products to be advertised.

Arias (2016) mentioned that the company stays committed to their service and follows a brand standard which benefits them through positive customer ratings, a lot of high – ranking rewards and Word – To – Mouth marketing. Therefore, Ritz – Carlton will not have to spend too much on advertising through mass media channels compare to those companies that advertised through those channels.

• Price

If the Ritz – Carlton hotel holds events like Formula One Race or tourist peak, the price of the room will increase tolerably.  Nevertheless, Ritz – Carlton will have to offer promotions and discounts if it encounters a low occupancy rate. The prices of the room are divided into double or single occupancy, that exclude taxes, fees, tips, etc., which are not for groups or other offers are not to be combined with, appointment should be made beforehand, and it is not for reward exchange.

• Place

The Ritz – Carlton, Millenia Singapore (RCMS) is located at 7 Raffles Avenue, which is known to be at the heart of the Marina Bay in Singapore. This hotel is also close to the Skyscrapers of Singapore, the Museum of Arts and Sciences, and the Esplanade. Those are some of the tourist attraction in Singapore where Ritz – Carlton is located close to them. This location is convenient for the guests.

• Competitive Advantage

Based on Philip (2013), the differentiation strategy was known to be where the company decides on a product attribute to put their focus on. For this strategy to work, the company needs to select an attribute that has a huge section in the market care that is enough for their products to be paid at a premium price. This strategy allows some products to co – exist if they are being focus on different attributes. Therefore, the company should make sure that they charge at an enough premium price which covers the focusing costs for chosen attributes. If the market did not value their chosen attributes highly enough, they will be likely to be at below average returns.

Opportunities and threats

Tulldahl (2012) has mentioned that the feature of differentiation, the company could deliver the product that is from the functionality perspective, and the product that looks quite similar compared to their competitors. In this case the differentiation features comes from the product feature instead of the fundamental functionality. As an example, this might include attributes like brand, price or quality. These days, the luxury hotel chain of the Ritz – Carlton has become famous for its outstanding service and is shown to be an example on how it effectively leverages the service with the mean of differentiating with another commoditized product.

The Ritz – Carlton (2018) mentioned that their Gold Standards has established necessary series of statements which defines which type of company it wants to be and containing several elements which outlines the significance of an outstanding service. Under the Gold Standards, there are the 6^th Diamond, Employee Promise, Motto, Three Steps of Service, Service Value, and the Credo. One of the Credos that were written in the Gold Standards is the aim of the service concept to be cleared:

“We pledge to provide the finest personal service and facilities for our guests who will always enjoy a warm, relaxed, yet refined ambience. The Ritz-Carlton experience enlivens the senses, instills well-being, and fulfills even the unexpressed wishes and needs of our guests.”

In Ritz – Carlton, the employees will need to gather for around 15 minutes for the ‘line-up’ daily. This was done to resolve any possible matters, and is also used for as an effective vehicle for implementing and improving the service concept. Daily, the Ritz – Carlton will update on their page about the new success story. The story posted will be describing about the employees that have made outstanding efforts when delivering an exceptional service for the Ritz – Carlton guests.

3. Existing & Future Development Strategy

• Diversification

Grimsley (2018) has mentioned that as the business expands to a new market or develops new products is where diversification happens. Businesses might frequently diversify when managing the risks through the minimization of potential harm towards the business when there is an economic downturn. Basically, this was done to expand the business for business activities that will not react negatively towards the same economic downtowns to be the current business activities. If one of the business enterprises making a hit in the market, one of the other business enterprise might help to balance out the losses and keeping on making the company manageable. The business can use diversification as their growth strategy.

Poplawska (2016) mentioned that the Mariott uses the diversification strategy as they are the corporate- level strategy. Firstly, it partner up with well – known airlines like the British Airways, on the rewards programs. The customers are allowed to use their membership number of Mariott to get cheaper prices for their tickets. They also have the authority on the used incorporate miles by air travel to gain reward points and use those points for discounts and upgrades for their future travels.

Additionally, the Mariott linked their own reward program to the Ritz – Carlton rewards program and it has recently acquired the rewards program of Starwoods. This benefits the customers and the company. The Mariott will gain new and loyal customers while the customer will have more chances of earning and using their travel points. In general, the guests will have more ways on earning points through the diversification partnering up with airlines. It will build scope economy by sharing resources, transferring of core competencies, knowledge, and value chain activities. As both airlines and hotels are part of the hospitality industry, they have the same customer base. As a result, the Mariott partnering up with most airline organizations will benefit both companies for a bigger market power which offers them more profits and being more competitive.

• Business Model

Amenities and services at the Ritz-Carlton, Millenia Singapore

Bandyopadhyay (2014) has stated that the business model of the Ritz Carlton can generally be focused on the three main areas, which are the experience, affiliated partnership and people. Firstly, the chosen business model will want to have many attentions for the preparation and the quality of the hotel personnel, and as a result the Human Resource Management (HRM) is the company’s heart when plan for long-term.

Personal preparation and the training will come when the time consuming site selection, concept development and the renovation of the facilities, as this is important in order for the company to succeed. Next is that the Ritz – Carlton follows the market customization strategy which allows personalized and unique experiences for each hotels, to make sure that the guests will feel that their experience is unique. Last, Jeszey and Dunk (2003) mentioned that the development strategy of the business model and the HRM is part of the strategic partnerships with the nongovernmental bodies and local government, that lets the different services and hotel staffing like bars, unique restaurants and other facilities in the hotel.

• Recommendations for Future Development Plans

The Ritz – Carlton sets high standards when services are delivered to each guest that walks to the hotel. Nevertheless, in the hospitality industry business, every guest will experience a negative and/or a positive stay. The reason is that there are two most visited websites like Yelp and TripAdvisor, where the guests can rate the properties in the hotel and give comments on the hotel. In the TripAdvisor website, the guests can write recommendations or problems encountered when they are staying in the hotel.

There was a guest who complaint on the noises from the walls and hallways, not good enough warning when there is a private event, and closing time of pools, written on 6^th March 2014. The hospitality industry is expanding in the 21^st century, especially when the use of social medias has become viral. Arias (2016) mentioned that before the guests decide on where to stay, current guests or new guests will firstly look at social media to see reviews and ratings for enjoying their stay in that particular hotel. This is the reason social media affects the business.

References

Anakin. (2009, February 3). The Ritz-Carlton Launches Online Retail Store. 

Arias, G. (2016, April 2). Marketing strategy final draft 

Bandyopadhyay, D. (2014, August 10). Ritz-Carlton Hotel Company ? Debadip Bandyopadhyay ? Medium. 

Grimsley, S. (2018, March 15). What Is Diversification of Business?

Jaszey C., and Dunk P. (2003). Training Design for the Hospitality Industry. Toronto, CA: Thomson Delmar Learning. Print.

Lewis, L. (2014). lewis ritz-carlton marketing paper.

Mariott International. (2015, June 5). A Legend Rises Again With The Nile Ritz-Carlton, Cairo - Marriott News Center. 

Philip, B. (2013, May 22). Differentiation and it's role in Competitive Advantage. Retrieved August 20, 2018

Poplawska, N. (2016, December 11). Marriott International Capstone Research Paper. 

Ritz Carlton Leadership Center. (2013, September 30). brand Archives

ritzcarlton.com. (2018). Luxury Hotels & Resorts | The Ritz-Carlton. 

The Ritz Carlton. (2009). Ritz-Carlton Hotel Shop – Luxury Hotel Bedding, Linens and Home Decor. 

The Ritz Carlton. (2018). Factsheet | Luxury Hotels & Resorts | The Ritz-Carlton.

The Ritz Carlton. (2018). Luxury Hotels & Resorts | The Ritz-Carlton.

The Ritz-Carlton. (2018). Gold Standards | Luxury Hotels & Resorts | 

Tulldahl, J. (2012, May 22). Insight on strategy: Competitive advantage.