Positioning strategy in competitive markets

Positioning Strategy of the Ritz-Carlton

To continually improve their premier brand status as a luxury hotel, Ritz-Carlton needs to continually strive to exceed customer expectations by delivering excellent customer service and experiences. Part of this positioning is creating premium hotel locations that are elegant and opulent. The most critical however is the training and development that the Ritz-Carlton staff receives in customer relationship management and customer service. The greatest innovations to premium brands occur when customer experience management becomes the primary priority over pricing or promotion alone as parts of the marketing mix (Salazar, Costa, Rita, 2010). The intent of this analysis is to show how Ritz-Carlton can continually gain greater market share by concentrating on the customer experience, modifying their services strategies to align with customer needs and requirements.

Analysis

Luxury hotels compete on service more than any other dimension of their marketing, selling, service and strategies aimed at increasing lifetime customer value. This is a direct result of standardizing and streamlining the most complex customer processes they have with a continual focus on making them exceed customer expectations while also ensuring efficiency and profitability over time (Luk, Layton, 2004). Ritz-Carlton has done this by creating a series of methodologies for measuring customer satisfaction and comparing those to the expectations customers have of their experiences at hotel locations (Chesbrough, 2011). The methodology used by Ritz-Carlton to accomplish this is called Service Quality Methodology or SERVQUAL (Getty, Getty, 2003). Using SERVQUAL, Ritz-Carlton is able to know exactly what parts of their service strategies need to be changed, which ones can stay the same, and which need to be discontinued. This precise definition of services strategies and their optimal mix will determine the long-term customer satisfaction of the chain, providing the hotel with direct feedback on how effective their selections are (Salazar, Costa, Rita, 2010).

Ritz-Carlton is unique in the use of this strategy, as they seek to define the optimal or perfect customer experience for each customer. The role of SERVQUAL is critical to this strategy, as is the need for continual training and development of the staffs at each hotel. All of these factors are capturing in the customer experience management rating systems the hotel chain uses to guide their marketing strategy.