Hotel Marketing Strategies: Differentiate, Blue Ocean, Social Media

Introduction

When deciding upon marketing strategies for a hotel business in order to attract new clients, a hotel must identify what sets it apart from competing hotels. The essence of any successful marketing campaign is the ability to differentiate oneself. Trout and Rivkin (2006) state that a company must "differentiate or die" (p. 2), meaning that if a business cannot distinguish itself from its nearest competitor it will never succeed—precisely because it has not shown consumers that it is offering something uniquely special. Thus, for a hotel, it is critical to consider the things that define it and make it uniquely attractive. Whether it is setting, dining, history, environment, proximity, attractions, luxury, style, class, or some other feature, the hotel's first priority is to identify its strengths.

If a hotel finds that it cannot offer anything new to guests, its second priority is to find out what guests need or want that no other hotel is offering and provide exactly that. This is called the "blue ocean strategy" (Kim & Mauborgne, 2005). It is based on the idea that "blue oceans denote all the industries not in existence today—the unknown market space, untainted by competition" (Kim & Mauborgne, 2004, p. 77). In other words, if a business cannot differentiate itself based on what it already has, it must hit upon something entirely new to offer.

A third strategy that hotel businesses can use to attract new clients is grounded in the reality that today's travelers and tourists are part of the Digital Age, where social media is the primary place people turn for information. A hotel can use social media platforms like Twitter, Facebook, Instagram, YouTube, and Pinterest to attract attention, create buzz, engage with users, and develop a following. This paper discusses these three strategies and shows how they can be used effectively by hotel businesses to attract new clients in the 21st century.

Differentiate or Die

The concept of marketing warfare is straightforward: a business must first know itself, then know the competition, and then know the consumer and which customers it can successfully target. In order to successfully attract new clients, a hotel must be able to offer them something new, something different, something no other hotel is offering—whether it is proximity to a nearby attraction, stellar service, a unique dining experience, or perfect ambiance. Once it identifies its unique strengths, a hotel can define a target market: this can be a niche market, a wider market, or a market it has never before targeted.

When Carnival Cruise (essentially a floating hotel) decided to pursue a new target market, it first examined what made it unique and what made it similar to its competitors. It then set about differentiating itself in small but memorable ways (Applegate, Kwortnik & Piccoli, 2006). This aligned with the "Differentiate or Die" strategy: "if you can't be first in a category, set up a new category you can be first in" (Ries & Trout, 2009, p. 17). By differentiating itself in ways that stuck in clients' minds, Carnival Cruise was able not only to win new clients but to win back former ones as well.

The key to marketing warfare is finding a way to enter the market in a manner that ensures success. A business should not engage in battles it cannot win. For example, if a small independent hotel tries to target clients who typically only stay at chain hotels, it is likely to fail in winning those clients and may even attract the negative attention of a much larger chain—which could respond by increasing advertising, offering lower prices, or opening a competing property nearby. A hotel must be strategic about how it engages in marketing warfare. If it cannot win clients who only stay in chains, it can seek out niche-market clients who are open to new concepts and independent properties.

The "Differentiate or Die" strategy can also help a company develop the right strategic posture, as Ries and Trout (1997) explain: this involves deciding which of four approaches to take when entering a market. Depending on the type of hotel business, the right approach will be: 1) defensive, 2) offensive, 3) flanking, or 4) guerrilla.

Defensive positions are adopted by dominant players in the market. A hotel that already commands the market does not need to do anything drastic to attract new clients. It can rely on word of mouth and traditional advertising to maintain its position, and it can offer promotions and incentives that lesser hotels with thinner margins cannot match. For a hotel seeking to take market share from a dominant player, the offensive strategy is the best approach. This allows an up-and-coming hotel to challenge the dominant player directly by cutting prices, offering unique promotions, or deploying creative marketing strategies such as humorous commercials or innovative online campaigns.

For a lower-tier hotel, directly challenging the largest competitor is unwise, because the larger business can sustain discounted prices far longer. The lower-tier hotel must therefore use the flanking approach—chiseling away at the competitor's edges bit by bit, winning new clients that the dominant player is unlikely to notice at first. A brand-new hotel with no market share will need to rely on the guerrilla method, which is essentially aligned with the blue ocean strategy discussed in the next section. It focuses on finding new clients that no other hotel is pursuing and going after them directly.

Such is the essence of the "Differentiate or Die" strategy. A hotel must be innovative and original to compete, just like any other business. As Schewe and Hiam (1998) put it, imagination and innovation are what allow marketers to use the other tools of marketing most effectively. Those other tools include the 4 P's—price, product, promotion, and place—through which a hotel can certainly differentiate itself to obtain new clients. For instance, by setting the right price, offering a product or service that is unique, creating a promotion that catches the attention of new tourists and travelers, or advertising proximity to a notable destination, a hotel has many avenues through which to distinguish itself.

Blue Ocean Strategy

The Blue Ocean Strategy was developed by Kim and Mauborgne (2005) as a new way for organizations to attract clients outside the existing competitive space. Rather than looking at what all competitors are doing and trying to do it better or slightly differently, the strategy asks a business to look at what competitors are not doing and consider whether there is an opportunity to do that and attract entirely new business. It invites creativity and out-of-the-box thinking—qualities from which a hotel business could profit substantially.

The "blue ocean" metaphor refers to the vast, open sea of ideas that companies are not currently exploring when deciding how to market themselves. In that ocean there are all manner of diverse potential clients ready to be attracted. Instead of seeking them out, however, companies within a sector typically fight over the same groups of customers using the same tactics. The Blue Ocean Strategy allows a company to leave that competitive struggle behind and venture into the unknown to find new clients. For a hotel, this means engaging travelers who may never have considered visiting the region before, or who had no idea there was a reason to do so. The strategy enables a hotel to be inventive, identify clients that other hotels have ignored, and engage them with tailored incentives.

One way to get to know a target market in the blue ocean is to conduct surveys of the people within it. A hotel could accomplish this online, through an email campaign, via phone calls, through incentives, or in person by stationing surveyors in areas where the target market is likely to be found—such as malls, arcades, theaters, urban centers, or parks. The goal is to understand the client so that the hotel can then build its brand around appealing to that person.

Designing a new brand based on what appeals to those clients is another important element of this strategy. It allows the hotel to envision itself in a new way and build its business model around data gathered through surveys, questionnaires, random sampling, or other research methods. Developing a client-oriented brand—rather than a business-oriented one—will not only attract new clients that no other hotel has thought to engage, but will also allow the hotel to differentiate itself substantially from competitors.

The Four Actions Framework is a tool within the Blue Ocean Strategy that Kim and Mauborgne (2005) developed to guide businesses through four action-oriented steps toward success in new markets. The four steps are: eliminate, raise, create, and reduce. This means the hotel should identify what in the industry can be eliminated because it is unnecessary or outdated, since technology and tastes are always shifting. The hotel should also identify ways to raise itself above others, ways to create something that has never been seen before, and ways to reduce the importance of certain services in the eyes of new clients so that the hotel is not burdened by excessive costs or unrealistic expectations.

Kim and Mauborgne (2005) suggest that the Four Actions Framework can be put to use by asking four straightforward questions:

"1) Which of the factors that the industry takes for granted should be eliminated? 2) Which factors should be raised well above the industry's standard? 3) Which factors should be created that the industry has never offered? 4) Which factors should be reduced well below the industry's standard?" (p. 114).

Answering these questions sets the hotel on the right path to finding new clients by giving them what they want and what no other hotel has thought to provide. In doing so, the hotel builds a new identity and a new brand that it can then promote through traditional marketing methods in order to secure its position among its new clientele.

Conclusion

The three strategies that a hotel business can utilize in order to attract new clients are: 1) the "Differentiate or Die" strategy, 2) the Blue Ocean Strategy, and 3) social media. The first strategy enables the hotel to focus on doing something unique that no other hotel is offering—whether it is a distinctive restaurant, an exceptional staff, a remarkable view, or proximity to a special attraction. Whatever it may be, the essence of this strategy is that the hotel must stand out. The second strategy invites the hotel to look outward rather than inward: to discover what clients want and to find entirely new client segments that no other hotel has thought to target. It requires the hotel to think creatively and engage with brand-new clientele in innovative ways. The third strategy calls for the use of social media—a revolutionary channel for information sharing in the 21st century. Social media users develop followers who respond to uploads of pictures and videos, sharing their experiences and comments with millions of others. Hotels must get ahead of the social media phenomenon in order to remain relevant. Together, these three strategies provide a comprehensive and adaptable marketing framework for hotel businesses seeking to grow their client base in an increasingly competitive and digital marketplace.

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