In the emerging global economy, e-business has increasingly become a necessary component of business strategy and a strong catalyst for economic development. The integration of information and communications technology (ICT) in business has revolutionized relationships within organizations and those between and among organizations and individuals. Specifically, the use of ICT in business has enhanced productivity, encouraged greater customer participation, and enabled mass customization, besides reducing costs.
Marriott hotel has using latest e-business strategy. Marriott has more focus on e-business technology to acquire more satisfied customer. They create their web site such way that customer can find all information quick and easily. Online business of Marriott is good then other hotel business. They can keep contact their customer and give good services.
Marriott hotel is doing good customer relation with their e-business. They have provided all information to customer in one click of mouse because they create their web site such way that all information can find easily. They also use reward system to customer. They will give bonus system as well as free room to their loyal customers.
E-business is an important tool to make success their business. Use different types of e-business tools to expand your business and make loyal and satisfied customer. Marriott is using their online service such way that customer will know all information easily.
Objective of The study:
The objective is to understand and validate the use of an enabling strategy for the success of Services Marketing strategy using a real-life case of an organization in the Hospitality Industry, where the competition is fierce and their exist a lot of challenges. Additionally, it is also important to understand the importance of the HRM policies and Organizational coordination to make a strategy successful, which is also discussed, briefly.
The objective of the study will be accomplished by conducting a systematic design, collection, analysis and reporting of data and findings that are relevant to different situations facing by the company.
1. Data Collection: Primary data:• • • • • • Questionnaires Conduct interview of company’s employees
Secondary data:Magazines Journals Internet Books
2. Sampling Design:Type of sampling: •
Sample Size: • • 50 people
Sample Area: Ahmedabad
3. Data Analysis:The collected data analyses by using various formulas and methods i.e. correlation analysis, by defining dependent and independent variables will also make use
of graphs, tables, charts and pictures to make the reader understand it easily and less time consuming.
4. Presentation :-
Final report would be drafted by following the logical sequence. Presentation data would be such that it inculcates interest in the reader to read further.
5. References :-
The references would be provided as and when project proceed. Till now only company website and company journal have been referred.
Statement of the Problem:
In recent years, IT strategy has played a major role in the successes of the business strategies. Marketing of Hospitality services has been always challenging. To enable a successful Services Marketing strategy, the company needs to have enabling strategies and one of them may be EBusiness Strategy. Find out the effective implementation of E-Business strategy.
INTRODUCTION OF MAKETING OF SERVICES
“A form of product that consists of activities, benefits, or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything.”
“Services are deeds, processes, and performances”. - Valarie Zeithaml & Mary Jo Bitn “Something that can be bought and sold but which cannot be dropped on your foot”
Examples of Service Industries:
• Health Care o Hospital, medical practice, dentistry, eye care
• Professional Services o Accounting, legal, architectural
• Financial Services o Banking, investment advising, insurance
• Hospitality o o Restaurant, hotel/motel, bed & breakfast, Ski resort, rafting 5
• Travel o • Others: o Hair styling, pest control, plumbing, lawn maintenance, counseling services, health club. Airlines, travel agencies, theme park
Introductions of services:
Service plays an important role in every national’s economy and country economy
always depends on service infrastructure like transportation, communication, education and government services. In today's economy, you don't have to produce anything to get rich not have to employ anybody. Now day’s money rests on bigger markets and more ways to make money. Having a name, a status, an idea can be sufficient. E. g. entertainment and sports figures make money by bringing people happiness. A service is a financial activity that is basically intangible and does not result in the ownership of anything. Service can not be owned by anyone, The American economy is quickly becoming service leaning. According to the Monthly Labor Review Online, after Second World War factory jobs declined in figure, while service-based employment increased. And it is increasing with rapid growth. Difference between services and manufacturing processes comprises the nature of outputs and the primary production processes, which are closely related. Service inputs include the facility where the service is provided, any products that are essential in providing the service. Even product-based organizations must give and manage a service package for their clientele. The bunch of services might include pre-sale services such as technical advice and dependable delivery, as well as post-sale services such as prompt repair and training. Not like most products, services are intangible, inseparable, variable and perishable.
There is less intensity of human contact with low labour intensity and low interaction and
customization. Example for this kind of service are hotels, there is less of staff than customer like in a restaurant also one waiter takes care of many tables and customer have no customized service because they have to select from a menu and that only will be served, same in room sale variation is not there, guest has to choose from, what hotel have rooms are not customized as per guest choice., same in public transportation also less staff takes care of many customers and customer cannot customize the routes of transportation system. Insurance services, museums, airlines also come under the same classification. (Leask, A, 1999)
It is classified as high degree of variation and interaction but low labour intensity so there is high customization with less labour intensity examples like maintenance, servicing, where customer interaction is more and serviced as per customer’s choice and also no need of much man power, some other examples like hospitals, repairing of goods etc. (Anon, 2000)
It relates to high labour intensity and low variety and interaction, so customization is less but mass worker works in such organization e.g. banks, retailing industries, where enough man power is used but there is less of interaction between customer and bidder. Highly standardise with less of customization, customer have to pick up from what is available for them, same in banks also you have to choose from the selected scheme not what you want but, which one is
more nearer to your needs. And same thing applies to schools, collages also which are exampled as less interaction with high labour intensity. (Leask, A, 1999)
Service that can hardly be standardised with numerous human contacts, it can be customised and also some time one to one human interaction. Examples which are covered by this kind of services are professional jobs like lawyers, doctors, engineering, consulting etc. if light on to lawyers work, a lawyer interact with the client and do as the client ask for, as per the clients need. And same in the profession of engineer and doctor also. If examples take from the hospitality and tourism a boutique hotel and first class airline service are good example, in a boutique hotel rooms are smaller and can be customised as per guest need, so these are less standardised. And same in first class on airline with high customisation and one to one guest interaction. (Anon, 2000)
Services marketing is marketing based on relationship and value. It may be used to
market a service or a product. Marketing a service-base business is different from marketing a goods-base business. There are several major differences, including: 1. The buyer purchases are intangible 2. The service may be based on the reputation of a single person 3. It's more difficult to compare the quality of similar services 4. The buyer cannot return the service The major difference in the education of services marketing versus regular marketing is that apart from the traditional "4 P's," Product, Price, Place, Promotion, there are three additional "P's" consisting of People, Physical evidence, and Process Service marketing also includes the servicewomen referring to but not limited to the aesthetic appearance of the business from the outside, the inside, and the general appearance of the employees themselves. Service Marketing has been relatively gaining ground in the overall spectrum of educational marketing as developed economies move farther away from industrial importance to service oriented economies. What is marketing? Marketing is the flow of goods and services from the producer to consumer. It is based on relationship and value. In common parlance it is the distribution and sale of goods and services. Marketing can be differentiated as:
Marketing of products
Marketing of services. Marketing includes the services of all those indulged may it be then the wholesaler
retailer, Warehouse keeper, transport etc. In this modern age of competition marketing of a product or service plays a key role. It is estimated that almost 50% of the price paid for a commodity goes to the marketing of the product in US. Marketing is now said to be a term which has no particular definition as the definitions change everyday. "Managing the evidence" refers to the act of informing customers that the service encounter has been performed successfully. It is best done in subtle ways like providing examples or descriptions of good and poor service that can be used as a basis of comparison. The underlying rationale is that a customer might not appreciate the full worth of the service if they do not have a good benchmark for comparisons. However, it is worth remembering that many of the concepts, as well as many of the specific techniques, will work equally well whether they are directed at products or services. In particular, developing a marketing strategy is much the same for products and services, in that it involves selecting target markets and formulating a marketing mix. Thus, Theodore suggested that "instead of talking of 'goods' and of 'services', it is better to talk of 'tangibles' and 'intangibles'". Levitt also went on to suggest that marketing a physical product is often more concerned with intangible aspects (frequently the `product service' elements of the total package) than with its physical. Sales after service are very important in service sector properties. Charles Revson made a famous comment regarding the business of Revlon Inc.: `In the factory we make cosmetics. In the store we sell hope.' Arguably, service industry marketing merely approaches the problems from the opposite end of the same spectrum.
Service cannot be defined as physical attributes because it cannot be seen, tasted, felt,
Intangibility of service:
heard, touched or smelled before it is bought, so it is difficult for consumers to tell in advance what they will be getting. (Sheila Webber, 2001) The experience consumers obtain from the service has an impact on how they will perceive it. And perceived service is risky and difficult to evaluate, customer tend to rely more on personal references, reputation, facilities of the service provider as an indication of quality. Service marketers identify the feelings that they want the customer to experience as a result of the service. They stress the positive elements of tangibility in the service, make all communications with the customer very clear and focus constantly on service quality. For example when anybody buys a car, he/she takes it to test drive, if they like it than only pay and buy the car ,never pay for test drive. But if you buy a meal at a restaurant, you do not know what is going to serve. Now buyers only look at tangible evidence like cleanliness, decoration, staff movement, which provide the information of quality of intangible service. (Kotler et al. 1996, 61)
Inseparability of service:
Services cannot be separated from the service supplier. It is labour intensive. After it is sold, the customer can not be taken away from the producer it is simultaneously produced and consumed. It is being produced at the same time that the customer is receiving. So customer is also part of the product. For example in a restaurant, you order your meal, during the time of waiting and delivery of the meal, the service provided by the service provider is all part of the
service production process and is inseparable, the staff in a restaurant are as part of the process as well as the quality of food provided.
Perishability of service:
A characteristic of services unused capacity cannot be stored or saved for future sale or use; it perishes after a specific time. (Sheila Webber, 2001) For example a 200 room hotel that only sells about 160 rooms for particular night. It can not inventory the remaining 40 rooms and sell them next night; revenue lost from these 40 unsold rooms is gone forever, because of perishable character of service. Same in a play ground or airlines, where if a match is held today and few seats are not sold lets take because of less popular team are playing these seats can not be sold in next match. And in airlines also for a destination all seats are not sold, revenue will be gone once journey over, so if these seats were sold even at low price some revenue could have earn. Thus service is perishable; it perishes if it is not used at particular time.
Heterogeneity or variability of service:
It is very difficult to make each service experience identical, since services are not produced by a single entity and then distributed to consumers, the quality of services may vary depending on who provides the service as well as when, where, and how they are provided. There is a strong possibility that the same question would be answered slightly differently by different people and even by the same person at different times. (Wolak. R, 1998) A guest can receive excellent service one day and not that good another day from the same person, because service person may have some personal problem or not have felt well. If travelling by plane the service quality may differ from the first time you travelled by that airline to the second, because the airhostess is more or less experienced. (Kotler et al. 1996, 61)
Simultaneity of service:
PServices are being produced and consumed at the similar time. You buy not just the service but also a section of how the service is created and delivered. Services companies cannot classify functions like sales, customer service, etc. like you can in manufacturing. Yes, they still possibly need a marketing department, but all workforce who deal with customers need to be
FIGURE: 1 SERVICE CHARECTERISTICS
Service Marketing Mix:
Having discussed the characteristics of a service, let us now look at the marketing mix of a service. The service marketing mix comprises off the 7’p’s. These include: • • • • • • • Product Price Place Promotion People Process Physical evidence.
An Object or Service - Mass Produced on Large Scale - With a Specific volume of units A global company is one that can create a single product and only have to tweak elements for different markets. For example, Coca-Cola uses two formulas (one with sugar, one with corn syrup) for all markets. The product packaging in every country incorporates the contour bottle design and the dynamic ribbons in some way, shape, or form. However, the bottle or can also includes the country’s native language and is the same size as other beverage bottles or cans in that country.
Amount/Consideration paid by Customer for services or product. It can vary from location to location & based on the demand in the local markets. Price will always vary from market to market. Price is affected by many variables: cost of product development (produced locally or imported), cost of ingredients, cost of delivery (transportation, tariffs, etc.), and much more. Additionally, the product’s position in relation to the competition influences the ultimate profit margin. Whether this product is considered the high-end, expensive choice, the economical, low-cost choice, or something in-between helps determine the price point.
How the product is distributed is also a country-by-country decision influenced by how the competition is being offered to the target market. Using Coca-Cola as an example again, not all cultures use vending machines. In the United States, beverages are sold by the pallet via warehouse stores. In India, this is not an option. Placement decisions must also consider the product’s position in the market place. For example, a high-end product would not want to be distributed via a “dollar store” in the United States. Conversely, a product promoted as the low-cost option in France would find limited success in a pricey boutique.
After product research, development and creation, promotion (specifically advertising) is generally the largest line item in a global company’s marketing budget. At this stage of a company’s development, integrated marketing is the goal. The global corporation seeks to reduce costs, minimize redundancies in personnel and work, maximize speed of implementation, and to speak with one voice. If the goal of a global Company is to send the same message worldwide, then delivering that message in a relevant, engaging, and cost-effective way is the challenge. Effective global advertising techniques do exist. The key is testing advertising ideas using a marketing research system proven to provide results that can be compared across countries. The ability to identify which elements or moments of an ad are contributing to that
success is how economies of scale are maximized. Market research measures such as Flow of Attention, Flow of Emotion and branding moments provide insights into what is working in an ad in any country because the measures are based on visual, not verbal, elements of the ad.
ESSENTIAL ELIMANTS BEYOND THE 4P’s
Resources: Include: finances, physical, human, organizational, informational resources More resources: Better competitive advantage. Relationships: Four types: 1) Win-win, 2) Win-lose, 3) Lose-lose, & 4) Lose-Win (Cust-vndr) Community marketing: Strategy that focuses and leverages win-win relationships. Community marketing may not be created but can be considered as cultivation of a natural social response. Business models: Business model innovation can make the competitions’ product superiority irrelevant. Business model allows the marketer to change the game rather than competing on a level playfield. Customer Focus: Companies focus their activities and products based on customer demands. Three ways of doing this: Customer-driven approach, sense of identifying market changes,and product innovation approach.
Let’s now look at the remaining 3 P’s:
SERVICE PERSONNEL 1. Careful Selection and Training 2. Laying Down Norms, Rules, Procedures for Persistence Performance 3. Constitant Appearance
4. Reduce Human Interface – Automation computerization
An essential ingredient to any service provision is the use of appropriate staff and people. Recruiting the right staff and training them appropriately in the delivery of their service is essential if the organization wants to obtain a form of competitive advantage. Consumers make judgments and deliver perceptions of the service based on the employees they interact with. Staff should have the appropriate interpersonal skills, attitude, and service knowledge to provide the service that consumers are paying for. Many British organizations aim to apply for the Investors In People accreditation, which tells consumers that staff are taken care off by the company and they are trained to certain standards. E.g.: Customer, service employees, other customers
An organize flow of tasks which have to be or have been completed to provide services to the consumer. Production/delivery of service/customer interface Processes Should Be:
• • • •
COMPUTERISED (wherever feasible) MECHANIZED RATIONALISED SIMPLE Refers to the systems used to assist the organization in delivering the service.
Imagine you walk into Burger King and you order a Whopper Meal and you get it delivered within 2 minutes. What was the process that allowed you to obtain an efficient service delivery? Banks that send out Credit Cards automatically when their customer’s old one has expired again require an efficient process to identify expiry dates and renewal. An efficient service that replaces old credit cards will foster consumer loyalty and confidence in the company. E.g. Service delivery systems • • Back stage Front stage
Where is the service being delivered? Physical Evidence is the element of the service mix. Which allows the consumer again to make judgments on the organization? If you walk into a restaurant your expectations are of a clean, friendly environment. On an aircraft if you travel first class you expect enough room to be able to lie down. Physical evidence is an essential ingredient of the service mix; consumers will make perceptions based on their sight of the service provision which will have an impact on the organizations perceptual plan of the service. E.g., Atmosphere like Décor, music etc., equipment, facilities, Uniforms.
FIGURE:2 SERVICE MARKETING MIX
CHAPTER 2 E-BUSINESS 2.1
E-business (electronic business) , derived from such terms as “e-mail” and “e-commerce”, is the conduct of business on internet, not only buying and selling but also servicing customers and collaborating with business partners
E-business is just business using electronic network to transform a business process or business system to create superior value for current or potential customers Companies are using the web to buy parts and supplies from other companies, to collaborate on sales promotion and to do joint research. Electronic commerce or e-commerce refers to a wide range of online business activities for products and services. It also pertains to “any form of business transaction in which the parties interact electronically rather than by physical exchanges or direct physical contact.”
E-commerce is usually associated with buying and selling over the Internet, or conducting any transaction involving the transfer of ownership or rights to use goods or services through a computer-mediated network. Though popular, this definition is not comprehensive enough to capture recent developments in this new and revolutionary business phenomenon. A more complete definition is: E-commerce is the use of electronic communications and digital information processing technology in business transactions to create, transform, and redefine relationships for value creation between or among organizations, and between organizations and individuals.
In the emerging global economy, e-commerce and e-business have increasingly become a necessary component of business strategy and a strong catalyst for economic development. The integration of information and communications technology (ICT) in business has revolutionized relationships within organizations and those between and among organizations and individuals. Specifically, the use of ICT in business has enhanced productivity, encouraged greater customer participation, and enabled mass customization, besides reducing costs. With developments in the Internet and Web-based technologies, distinctions between traditional markets and the global electronic marketplace-such as business capital size, among others-are gradually being narrowed down. The name of the game is strategic positioning, the ability of a company to determine emerging opportunities and utilize the necessary human capital skills (such as intellectual resources) to make the most of these opportunities through an e-business strategy that is simple, workable and practicable within the context of a global information milieu and new economic environment. With its effect of leveling the playing field, ecommerce coupled with the appropriate strategy and policy approach enables small and medium scale enterprises to compete with large and capital-rich businesses. On another plane, developing countries are given increased access to the global marketplace, where they compete
with and complement the more developed economies. Most, if not all, developing countries are already participating in e-commerce, either as sellers or buyers. However, to facilitate ecommerce growth in these countries, the relatively underdeveloped information infrastructure must be improved. Among the areas for policy interventions are: ● High Internet access costs, including connection service fees, communication fees, and hosting charges for websites with sufficient bandwidth; ● Limited availability of credit cards and a nationwide credit card system; ●Under developed transportation infrastructure resulting in slow and uncertain delivery of goods and services; ● Network security problems and insufficient security safeguards; ● Lack of skilled human resources and key technologies (i.e., inadequate professional IT work force) ● Content restriction on national security and other public policy grounds, which greatly affect business in the field of information services, such as the media and entertainment sectors; ● Cross-border issues, such as the recognition of transactions under laws of other ASEAN member-countries, certification services, improvement of delivery methods and customs facilitation; and ●The relatively low cost of labor, which implies that a shift to a comparatively capital intensive solution (including investments on the improvement of the physical and network infrastructure) is not apparent. It is recognized that in the Information Age, Internet commerce is a powerful tool in the economic growth of developing countries. While there are indications of ecommerce patronage among large firms in developing countries, there seems to be little and negligible use of the Internet for commerce among small and medium sized firms. E-commerce promises better business for SMEs and sustainable economic development for developing countries. However, this is premised on strong political will and good governance, as well as on a responsible and supportive private sector within an effective policy framework. This primer seeks to provide policy guidelines toward this end.
• • •
Features of E-business:
Links their internal and external data processing systems more efficiently and flexibly. E-business refers to more strategic focus with an emphasis on the functions that occur E-business involves business processes spanning the entire value chain: electronic
using electronic capabilities. purchasing and supply chain management, processing orders electronically, handling customer service, and cooperating with business partner.
• • •
Special technical standards for e-business facilitate the exchange of data between E-business can be conducted using the Web, the Internet, intranets, extranets, or some One of the first to use the term was IBM, when, in October, 1997, it launched a thematic
companies. combination of these. campaign.
2.2.2. Application of E-Business:
Manufacturing sector Tourism Telecommunication Hospitals Retail Customer service Auction Hotels
• • •
E-business Benefits Include:
Highly Accessible -Businesses can operate 24 hours a day, 7 days a week, 365 days a year Increased Customer Loyalty -Additional channels to contact, respond to, and access customers helps contribute to customer loyalty Improved Information Content-In the past, customers had to order catalogs or travel to a physical facility before they could compare price and product attributes. Electronic catalogs and Web pages present customers with updated information in real-time about goods, services, and prices Increased Convenience –e-business automates and improves many of the activities that make up a buying experience Increased Global Reach -Businesses, both small and large, can reach new markets Decreased Cost -The cost of conducting business on the Internet is substantially smaller than traditional forms of business communication
• • •
Benefits to Organizations
Global reach Cost reduction
• • • • •
Supply chain improvements Extended hours: 24/7/365 Customization Efficient procurement No city business permits & fees.
Benefits to Society • • • • Telecommuting Higher standard of living Hope for the poor Availability of public services
Benefits to Consumers • • • • • Ubiquity More products & services Cheaper products & services Instant delivery “Get it your way”
• • • •
Limitations of E-Business:
Host of security Legal & financial problems The incoherence of the web Concerns about security & flexibility In using web as a purchasing tool.
E-business vs. E-commerce:
• Electronic business transactions involving money are “E-Commerce" activities.
• E-commerce refers to online transactions – buying and selling of goods and/or services
over the Internet, E-business covers online transactions, but also extends to all Internets based interactions with business partners, suppliers and customers such as: selling direct to consumers, manufacturers and suppliers; monitoring and exchanging information; auctioning surplus inventory; and collaborative product design. These online interactions are aimed at improving or transforming business processes and efficiency. • Improved accuracy, quality and time required for updating and delivering information on products and/or services. • Access for customers to catalogues and prices - 24 hours x 7 days. • Improved ease, speed and immediacy of customer ordering. • Enhanced market, industry or competitor intelligence acquired gathering and research activities. through information
• New distribution channels via the electronic delivery of some products and services, for
example, product design collaboration, publications, software, translation services, banking, etc.
• Expansion of customer base and growth in export opportunities.
• Reduces routine administrative tasks (invoices and order records) freeing staff to focus on
more strategic activities.
2.4.1. How do e-commerce and e-business differ?
• E-commerce–the buying and selling of goods and services over the Internet.
• E-business –the conducting of business on the Internet including, not only buying and selling, but also serving customers and collaborating with business partners.
How E-business differs From Normal Business While Considering Consumer Behaviour Model
2.4.2 E-BUSINESS MODEL:
E-business Models (Traditional)
TRADITIONAL E-BUSINESSES MODEL
New Trends in E-business: E-government
NEW MODEL OF E-BUSINESS
How is the Internet relevant to e-commerce?
The Internet allows people from all over the world to get connected inexpensively and
reliably. As a technical infrastructure, it is a global collection of networks, connected to share information using a common set of protocols. Also, as a vast network of people and information,
the Internet is an enabler for e-commerce as it allows businesses to showcase and sell their products and services online and gives potential customers, prospects, and business partners access to information about these businesses and their products and services that would lead to purchase. Before the Internet was utilized for commercial purposes, companies used private networks-such as the EDI or Electronic Data Interchange-to transact business with each other. That was the early form of e-commerce. However, installing and maintaining private networks was very expensive. With the Internet, e-commerce spread rapidly because of the lower costs involved and because the Internet is based on open standards.
Ways to make your business successful through internet:
Internet the way we do business today. It has broken physical boundaries and has provided each small, big and mega businesses a global business opportunity. Your online presence, your website provides you an equal opportunity to have your presence felt. The irony those among the millions of websites ruling the internet world only thousands are successful. As they say you not only need a quality product or service, you need to package and most importantly sell it. That leads us to the question how to get successful online? Simple answer packages your website and makes people aware of it. The basic rules of business apply here too with the difference that here you cater to a global market. The internet offers you with a variety of tools which applied correctly can make the winning difference.
Process of making effective web site:
Your website needs a design and for this you need a web designer. Correct web design, colours and correct placement of web elements on your web page are important aspects for your site to succeed.
Remember to maintain a contact page which mentions your contact details on the site have a sitemap and design the site for users. It is of utmost importance that you keep search engine optimisation factors in mind. Have your pages titled. For more on this contact a web designer. If you are in business retail or manufacturing a good idea is to have your site e-com enabled. You must have shopped on the internet, if not you are among the chosen few. If you have you must be aware of the shopping cart on the e-commerce site. The shopping cart enables your visitors to manage their shopping well. You will need a payment gateway and a merchant account to receive money for sales. To test out your site integrate it with PayPal and try out the shopping experience. • • • • So your site seems to be ready now. Next step. Make your site presentable and make it known. So we are now into advertising and marketing of your website. Here note this that 95% of websites gets visitors from referred from search engines. These search sites work like a gateway to the internet world. Your next step towards making your site known to others is to follow the search engine optimization tips offered by the search engines while making your site. You should look for the terms people use to search your type of service or product and create your site around it. As in the advertising world headings for your pages should be catchy. Internet visitors scan web pages for information instead of reading through them, so all the rules of advertising world which helps in writing the content for the advertisement apply here. Do it yourself, get to know what the inverted pyramid style of writing is or hire a web designer, see specialist to do it for you.
With pay per click, the internet advertising world has revolutionized. It offers you advertising opportunities on the net for a few shillings. Check out Google Ad sense or Overture PPC campaigns. These are offered by mostly the leading search engines and your advertisements are displayed on the search result pages of these sites for keywords you choose. If controlled optimally you can benefit from these. Use PPC to get visitors to your site during the launching period. Dual benefits. One you get visitors though your site is too new and second due to advertising, your site gets noticed. If you are not aware of this, use the services of a PPC management company to do this for you.
So what else to look out for? Interaction. Give reasons to your visitors to come back to your site. Start a newsletter campaign. Offer your visitors something free. Give them tips. Start a blog. Make your visitors come back to your site.
Give them options to sign up for your newsletter free. You get their emails and use a mailer program to send out regular mails to them.
CHAPTER 3 MARRIOTT BACKGROUND
MARRIOTT INTERNATIONAL, INC. – CORPORATE PROFILE Marriott International, Inc. is a worldwide hospitality leader with operations in the United States and 67 other countries and territories. The company had approximately 137,000 associates at 2009 yearend and is headquartered in Bethesda, Md. Its operations include:
Marriott Lodging, at the end of the fourth quarter 2009, operates or franchises 3,420 hotels, residences, services apartments and resorts totaling 595,461 rooms, including 12,891 timeshare villas, worldwide. Its portfolio of lodging brands includes: Marriott Hotels & Resorts (upperupscale full service brand, 545 hotels including 43 JW Marriott Hotels and Resorts, and 11 Marriott Conference Centers) The Ritz-Carlton Hotels (luxury, 103 hotels, residences and services apartments) Bulgari (luxury, 2 hotels); Renaissance Hotels & Resorts (upper upscale full-service brand, 143 hotels) Courtyard (upper moderate-price limited service brand, 858 hotels); Residence Inn (extendedstay limited service brand, 608 inns); Fairfield Inn (lower moderate-price limited service brand, 629 inns) The Ritz-Carlton Destination Club and Residences (fractional and residential timeshare, 13 resorts) Grand Residences by Marriott (fractional and residential timeshare, 4 resorts); and Marriott
Executive Apartments (upscale serviced apartments, 23 properties including 3 other Serviced Apartments). In addition, ExecuStay by Marriott provides 2,072 furnished corporate housing units, and Marriott Golf operates 41 golf course facilities around the world. Synthetic Fuel consisted of four coal-based synthetic fuel production facilities (the “Facilities”). Because tax credits under Section 45K of the IRC are not available for the production and sale of synthetic fuel produced from coal after calendar year-end 2007, and because high oil prices during 2007 were expected to result in the phase-out of a significant portion of the tax credits available for synthetic fuel produced and sold in 2007, on November 3, 2007, we shut down the Facilities and permanently ceased production of synthetic fuel. Accordingly, we now report this business segment as a disc Nontinued operation. The book value of the Facilities was zero at year-end 2007, as the Facilities have been transferred to third parties. Under the site leases for the Facilities, we were required to restore the leased premises to substantially the condition the premises were in when the leases were originally executed. However, we executed agreements with the lessors of the sites pursuant to which we transferred the Facilities to the lessors in exchange for the release of our obligations to restore the leased premises to their original conditions. Costs associated with shutting down the synthetic fuel operation and transferring the Facilities to the site lessors was not material.
Corporate Office Marriott International, Inc. 10400 Fernwood Road Bethesda, MD 20817 (301) 380-3000
Investor Contact Laura Paugh, Senior Vice President, Investor Relations (301) 380-7418 Betsy Dahm, Senior Director, Investor Relations (301) 380-3372 (301) 380-5067 fax
Background of Marriott:
In 1927, J.William Marriott set up a nine-seat rootbeer shop in Washington and after some time started serving hot food and named the shop ‘The Hot Shoppe.
In 1937, it entered into airline catering at Washington Airport. In November 1967 the name was changed to Marriott Corporation. Marriott ventured into economy lodging by launching the first Fairfield Inn in Atlanta, Georgia in 1987. In 1993 the operations of Marriott were split into two companies- Marriott International Inc and In 1997 Marriott completed the $1 bn acquisition of the Renaissance Hotel Group. Marriott had a presence in vacation ownership resorts through its Marriott vacation Club International As part of its proactive efforts to improve customer service, Marriott launched its website www.marriott.com in 1996.
The website in its homepage had five Icons Hotel Directories- This section had details such as the name of the hotel, the address and the phone numbers of all the hotels in the Marriott chain across the world.
Reservations: By clicking the ‘Make Reservations’ that led to the ‘click hotel availability’ page. Then after entering the date of arrival and departure and the number of people the page displays the type of rooms and their.
Meeting Planner: This section targeted business customers to conducted frequent meetings. These clients could book a min and max number of rooms and meeting rooms. Travel Agent: This section was targeted at travel agents providing them with the information regarding the codes of hotels and to know the availability of the hotels. Suggestion Box : Through this the users could e-mail their suggestions on improving services.
John Willard “Bill” Marriott, Sr. (September 17, 1900 – August 13, 1985)
John Willard "Bill" Marriott, Jr. (b. March 25, 1932, Washington, D.C.) is the Chairman and CEO of Marriott International.
LIFE AND SUCCESS J.W. Marriott, Jr. is Chairman and Chief Executive Officer of Marriott International, Inc., one of the world’s largest lodging companies. His leadership spans more than 50 years, and he has taken Marriott from a family restaurant business to a global lodging company with more than 3,200 properties in 67 countries and territories. Mr. Marriott’s vision for the company is to be the world’s lodging leader. It is grounded in his intense focus on taking care of the guest, extensive operational knowledge, the development of a highly skilled and diverse workforce, and offering the best portfolio of lodging brands in the industry.
Under his leadership, Marriott continues to enjoy strong customer, owner and franchise preference, steady growth and profitability.
Known throughout the industry for his hands-on management style, Mr. Marriott has built a highly regarded culture that emphasizes the importance of Marriott’s people and recognizes the value they bring to the organization. Marriott International’s “spirit to serve” culture is based on a business philosophy originated more than 80 years ago by his parents, J. Willard and Alice S. Marriott – “Take care of the associate, and they’ll take care of the guest.” Today, approximately 300,000 Marriott associates are serving guests in Marriott managed and franchised properties throughout the world. Marriott International is also well known as a great place to work and for its commitment to diversity, social responsibility and community engagement. It has consistently been named to Fortune’s lists of most admired companies, best places to work and top companies for minorities. At an early age, Mr. Marriott developed a passion for the business and worked in a variety of positions in the Hot Shoppes restaurant chain during his high school and college years. He joined the company full-time in 1956 and soon afterward, took over management of Marriott’s first hotel. Mr. Marriott became executive vice president of the company, then its president, in 1964. He was elected chief executive officer in 1972, and chairman of the board in 1985. Regarded as a lodging innovator, Mr. Marriott began shifting the company in the late 1970s from hotel ownership to property management and franchising. His strategic decision allowed the company to accelerate its growth and broaden its leadership position. That transformation culminated in the company’s split into Marriott International, a hotel management and franchising company, headed by Mr. Marriott, and Host Marriott International, a hotel ownership company chaired by his younger brother, Richard Marriott. Mr. Marriott has also worked to compile a family of 18 lodging brands that range from limited service to full service luxury hotels that meet the needs of any traveler. Today, the company manages and franchises hotels and resorts under the Marriott, JW Marriott, Renaissance, Bulgaria, The Ritz-Carlton, Courtyard, Residence Inn, Springhill Suites,
Town Place Suites, and Fairfield Inn brand names; develops and operates vacation ownership resorts under the Marriott Vacation Club International, The Ritz-Carlton Club, Grand Residences by Marriott, and Horizons brands; operates Marriott Executive Apartments; provides furnished corporate housing through its Marriott Executes division; operates conference centres; and manages golf courses. Mr. Marriott serves on the board of The J. Willard & Alice S. Marriott Foundation. He is a member of the National Business Council and the Executive Committee of the World Travel & Tourism Council. He also serves as the chairman of the Mayo Clinic Capital Campaign. Mr. Marriott recently served on the Board of Trustees of the National Geographic Society, director of the United States Naval Academy Foundation, chairman of the President’s Export Council (PEC) and member of the Secure Borders Open Doors Advisory Committee (SBODAC) and the U.S. Travel and Tourism Advisory Board (TTAB). He is an active member of The Church of Jesus Christ of Latter-day Saints. He is married to the former Donna Garff. They have four children and 15 grandchildren and three great grandchildren. On May 4, 2006, Marriott received an honorary doctorate of humanities from Weber State University during the university's 127th commencement. He also delivered the commencement address during these proceedings. Marriott's book The Spirit To Serve (1997), written with Kathi Ann Brown and with a Foreword by James C. Collins, is a personal view of the rise of the Marriott company and outlines principles of business success. JW Marriott Jr. is a 2006 nominee for the Hotel Travel Personality of the Year award from World Travel Awards. While CEO of Marriott International in 2008, J. Willard Marriott Jr. earned a total compensation of $8,314,136, which included a base salary of $1,253,654, a cash bonus of $904,700, no stock, options granted of $5,750,012, and other compensation of $405,77.
1927 • At age 27, J. Willard Marriott enters business with the opening of a nine-seat root beer stand in Washington, DC. Hot food later added and name changed to The Hot Shoppe. 1929 • Marriott officially incorporated in the state of Delaware as Hot Shoppes, Inc. 1937 • Marriott pioneers airline catering at Washington’s old Hoover Airfield (current site of the Pentagon) serving Eastern, American and Capital Airlines. 1939 • Beginning of food service management business with account at the U.S. Treasury building. Other accounts soon followed at government defense plant cafeterias. 1953 • Company stock first offered to the public at $10.25 per share. Offering sold out in two hours of trading. 1955 • Highway division begins with several shops on the New York State Thruway. 1957 • Marriott opens first hotel, the Twin Bridges Marriott Motor Hotel, in Arlington, Virginia.
1964 • Company name changes to Marriott-Hot Shoppes, Inc. and J.W. Marriott, Jr. elected president at age 32. 1966
• Marriott becomes international, acquiring airline catering kitchen in Caracas, Venezuela. 1967 • Marriott acquires 22-unit Big Boy restaurant chain from founder, Bob Wian. • Corporate name changes from Hot Shoppes, Inc. to Marriott Corporation at annual shareholders meeting. 1968 • Marriott begins Roy Rogers fast food restaurant division with first location in Falls Church, Virginia. • Stock first listed on the New York Stock Exchange – ticker symbol MHS. 1972 • J.W. Marriott, Jr. succeeds his father as chief executive officer 1979 • Company moves to new international headquarters in Bethesda, Maryland. 1982 • Marriott acquires Host International, and becomes the country’s largest operator of airport terminal food, beverage and merchandise facilities. • Marriott acquires Gino’s fast food restaurant chain, and plans to convert most units to Roy Rogers restaurants. 1983 • First Courtyard by Marriott, moderate price segment hotels, opens near Atlanta, Georgia. 1984 • Marriott enters vacation timesharing business with acquisition of American Resorts Group.
• Marriott completes acquisition of Gladieux Corporation, a diversified food service company. • Marriott completes acquisition of Service Systems, a contract food service company. • J. Willard Marriott passes away at age 84. J.W. Marriott, Jr. named chairman of the board. • Marriott acquires Howard Johnson Company, selling hotels to Prime Motor Inns and keeping 350 restaurants and 68 turnpike units. 1986 • Marriott acquires Saga Corporation, a diversified food service management company, making Marriott the largest food service management company in the United States. 1987 • Marriott completes expansion of its Worldwide Reservation Center in Omaha, Nebraska, making it the largest single-site reservations operation in U.S. hotel history. • Marriott acquires The Residence Inn Company, an all-suite hotel chain targeted toward extended stay travelers. • Marriott stock listed on the Tokyo Stock Exchange. • Marriott enters economy lodging segment with the opening of the first Fairfield Inn in Atlanta, Georgia. • Marriott transfers Big Boy restaurant system franchise rights to Elias Brothers of Warren, Michigan. 1988 • Marriott acquires Basic American Retirement Communities (BARC) of Indianapolis, giving Marriott a major presence in the rental retirement market. • Marriott’s Senior Living Services division announces development plans for assisted living/personal care complexes called Brighton Gardens. 1989 • Marriott acquires United Healthserv, Inc., a major provider of housekeeping, maintenance and laundry services.
• Marriott completes transfer of airline catering division to CaterAir International, a private company led by several members of Marriott’s In-flite Services division senior management. • Marriott announces corporate restructuring. Plan includes sale of company’s fast food and family restaurants. Company plans to sharpen focus on mega-markets in lodging and contract services. 1990 • Marriott sells its Roy Rogers restaurant division to Hardee’s Food System for $365 million. 1992 • Host completes acquisition of Dobbs airport concessions. • Marriott Corporation announces plan to divide its operation into two separate companies through a special dividend. 1993 • Marriott completes split of its operations into two companies – Marriott International and Host Marriott Corporation. 1995 • Marriott International completes acquisition of 49 percent interest in The Ritz-Carlton Hotel Company. • Host Marriott Corporation announces plan to divide, through a special dividend, its operations into two separate companies. • Marriott Management Services acquires Taylorplan Services, a custodial and Food Service Company based in the United Kingdom.
1996 • Host Marriott Corporation divides into two separate companies. Host Marriott continues to own hotels and real estate; Host Marriott Services Corporation will operate concessions at airports, on toll roads and at sports and entertainment attractions. • Marriott introduces its new all-suite economy hotel – Fairfield Suites by Marriott. • Marriott International acquires Forum Group, Inc., a leading operator of senior housing, and merges it with Marriott’s Senior Living Services business. • Marriott Management Services acquires Russell & Brand, Ltd., a UK-based food services company. • Marriott International awarded nationwide food service distribution contract for Boston Market and Einstein/Noah Bagel Corporation. 1997 • Marriott International reports net income soared 24% in 1996 as sales top $10 billion. • William J. Shaw named president and chief operating officer of Marriott International. Bill Marriott retains position of chairman and chief executive officer. • Marriott introduces a new brand, Marriott Executive Residences. • Marriott opens its first Towne Place Suites in Newport News, Virginia. • Marriott International acquires Renaissance Hotel Group for approximately $1 billion. Adds three brands (Renaissance, Ramada International and New World) and doubles Marriott’s presence overseas. • Marriott International launches “Marriott Rewards,” the world’s largest multi-brand frequent guest program. • Marriott International announces plans to merge its food service and facilities management business with Sodexho Alliance’s North American operations, and spin off to shareholders a new company comprised of its lodging, senior living and distribution service businesses. 1998 • Marriott International increases its ownership interest in The Ritz-Carlton Company LLC to approximately 98 percent.
• Marriott International completes spin off and merger transactions resulting in “New” Marriott International and Sodexho Marriott Services. • Marriott International announces it converted the Parc 55 Hotel in San Francisco to a Renaissance hotel and designated it as Marriott’s 1,500th hotel world-wide. • Marriott International announces conversion to single class of common stock effective May 21st. • Marriott International confirms plans to convert Fairfield Suites to Spring Hill Suites by Marriott. New product positioned to capture share in the upper moderately priced all-suite lodging segment. 1999 • Marriott International completes acquisition of ExecuStay; launches corporate housing business ExecuStay by Marriott. • Marriott International named to Fortune 500 list of the largest U.S. companies – leads hotel industry category. • Marriott Vacation Club International launches new moderately priced resorts, Horizons by Marriott Vacation Club, and luxury resorts, The Ritz-Carlton Club. • ExecuStay by Marriott acquires Executive Living, Inc. of Columbus, Ohio, and enters into exclusive agreement with JBI-Dallas. • Marriott International, Inc. announces that its Marriott Rewards program is tripling the number of hotels offering frequent flyer miles and more than doubling the number of miles previously offered at nine different brands, representing 1,650 hotels. • The last operating Hot Shoppe closes as Marriott tops 1,800 worldwide hotels – a historic mark for Marriott. 2000 • Marriott announced the board of director’s approval of the purchase of an additional 25 million shares, or about 10% of outstanding shares, through the company's ongoing share repurchase program. • Marriott is named the official lodging supplier of the 2002 Winter Olympics and the 2000, 2002 and 2004 U.S. Olympic Teams.
• Marriott announces the formation of a joint venture with Hyatt and Club Corporation to create the largest, most comprehensive electronic procurement network. • Marriott celebrated the opening of its 2,000th property with the Tampa, Florida Marriott Hotel. 2001 • Travel industry impacted by difficult economic climate and events of September 11, 2001. • Marriott restructuring and other charges in 2001 totaled $271 million, pretax. Net Income totaled $236 million. • Marriott opened nearly 50,000 lodging rooms worldwide in 2001. • Marriott Rewards membership reaches 16 million travelers, remaining the largest and most preferred loyalty program in the lodging industry. 2002 • Marriott sold the businesses at nine distribution centers and closed four other centers, exiting Marriott Distribution Service. • Announced the plan to sell Marriott Senior Living Services to Sunrise Assisted Living, Inc. • Marriott.com reached six million visits in one month. Reservations through Marriott.com grow 53% versus 2001. • With other lodging companies, Marriott formed travelweb.com for consumers who wish to comparison shop. • Opened the 2,500th hotel, the 950-room J.W. Marriott Desert Ridge Resort & Spa in Phoenix. 2003 • Launched Marriott’s Look No Further, Best Rate Guarantee. • One third of our room expansion (over 31,000 rooms) was from conversions to Marriott brands by owners and franchisees of competitor brands. • High-speed internet access available in 1400 hotels, far outpacing our competition. We also introduced wireless internet access in lobbies, meeting rooms and public spaces in over 900 hotels. • Marriott.com booked revenues of $1.4 billion, 25 percent more than the prior year.
2004 • Marriott added the 500,000th room to the system with the opening of the West India Quay Marriott in London’s Canary Wharf. (Number of rooms at year end fell below 500,000 due to sale of the Ramada International brand.) • Marriott sold Ramada International brand to Cendant. • Marriott.com booked revenues of $1.8 billion, 41 percent more than the prior year. • A record $650 million was returned to shareholders through the repurchase of 14 million shares of stock. • Announced Courtyard Joint Venture restructuring, which will result in a reduction of Marriott’s interest in the joint venture to 21%, Host 4% and Sarofim 75%. 2005 • Marriott formed a joint venture with Whitbread PLC to acquire Whitbread’s portfolio of 46 franchised Marriott and Renaissance hotels of over 8,000 rooms, and Marriott took over management of the entire portfolio. • Marriott, along with Sunstone Hotel Investors, Walton Street Capital and Tarsadia Hotels entered into an agreement to purchase 32 hotels and certain joint venture interests from CTF Holdings. The transaction was substantially completed in June 2005. • Marriott repurchased a record $1.65 billion of its stock. • Internet sales totaled $3.2 billion in 2005, 42 percent over 2004 levels. Nearly 85 percent of internet sales were booked on Marriott.com. 2006 • Marriott acquired the largest hotel in Paris; the 782 room Paris Rive Gauche Hotel and Conference Center. • Joint venture formed with Whitbread PLC sold to RBS. • Internet sales totaled $4.3 billion in 2006, 35 percent over 2005 levels. Nearly 87 percent of internet sales were booked on Marriott.com. • Marriott repurchased $1.58 billion of the company’s common stock.
2007 • Marriott announced partnerships with Nickelodeon and Miller Global Properties, LLC, to co develop a new lodging resort brand and concept for travelers seeking fun and adventure, ‘Nickelodeon by Marriott.’ • Marriott announced a partnership with the pioneer of the lifestyle boutique hotel, Ian Schrager, to create Edition, the first truly global boutique lifestyle hotel brand on a large scale. • Marriott celebrated the opening of its 3,000th property with the JW Marriott Hotel Beijing. • Internet sales totaled $5.4 billion in 2007, 26 percent over 2006 levels. Over 87 percent of internet sales were booked on Marriott.com. • Marriott repurchased $1.78 billion of the company’s common stock.
2008 • The travel industry was impacted by the significant economic decline affecting worldwide demand and turmoil in the financial markets. • Marriott restructuring and other charges in 2008 totaled $192 million pretax. Net income totaled $362 million. • Marriott Rewards celebrated 25 years. With membership of 30 million, the program has 2,900 participating hotels in 65 countries. • The company announced its five-point environmental plan to address climate change. As part of that plan, Marriott committed $2 million to the Amazonas Sustainable Foundation to help protect 1.4 million acres of endangered rainforest. • Marriott opened over 33,000 rooms in 2008; nearly 25 percent of those rooms were outside North America. • Internet sales totaled $6.4 billion in 2008, 19 percent over 2007 levels. Over 87 percent of internet sales were booked on Marriott.com. The company’s blog “Marriott on the Move” generated $2.6 million in gross property-level sales, while guests booked over $2 million using the new Marriott Mobile booking engine.
2009 • William J. Shaw named vice chairman of Marriott International, Arne M. Sorenson named president and chief operating officer and Carl T. Berquist named executive vice president and chief financial officer. J. W. Marriott, Jr. retains position of chairman and chief executive officer and J.W. Marriott III continues to serve as vice chairman of the board of directors. • Marriott Vacation Club celebrated 25 years. With nearly 400,000 owners, the division has more than 50 Marriott Vacation Club resorts throughout the US, Caribbean, Europe and Asia. • Marriott restructuring and other charges in 2009 totaled $213 million pretax. The company also recorded non-cash pretax timeshare impairment changes of $752 million largely related to the plans to reduce prices and development at luxury fractional and residential resorts to accelerate cash flow. Net losses totaled $346 million. • Marriott opened over 38,000 rooms in 2009; nearly 25 percent of those rooms were outside North America. • Internet sales totaled $6.0 billion in 2009, a 6 percent decline from 2008 levels. Nearly 85 percent of internet sales were booked on Marriott.com.
MARRIOTT INTERNATIONAL REPORTS THIRD QUARTER RESULTS: BETHESDA, MD – October 8, 2009 – Marriott International, Inc. (“Marriott”) (NYSE:MAR) today reported third quarter 2009 adjusted income from continuing operations attributable to Marriott of $53 million, a 57 percent decline over the year-ago quarter, and adjusted diluted earnings per share (“EPS”) from continuing operations attributable to Marriott shareholders of $0.15, down 55 percent. The company’s EPS guidance for the 2009 third quarter, disclosed on July 16, 2009, totaled $0.09 to $0.14. The reported loss from continuing operations attributable to Marriott was $466 million in the third quarter of 2009 compared to reported income from continuing operations attributable to Marriott of $94 million in the year-ago quarter. Reported diluted losses per share from continuing operations attributable to Marriott shareholders was $1.31 in the third quarter of 2009 compared to diluted EPS from continuing operations attributable to Marriott shareholders of $0.25 in the third quarter of 2008. Adjusted results for the 2009 third quarter exclude $752 million pretax ($502 million after-tax and $1.41 per diluted share) of impairment charges, which Marriott previously disclosed, related to the timeshare segment. See the table on page A-14 of the accompanying schedules for the detail of these impairment charges and their placement on the Consolidated Statements of Income. Adjusted results for the 2009 third quarter also exclude $8 million pretax ($4 million after-tax and $0.01 per diluted share) of restructuring costs and other charges. Restructuring costs totaled $9 million pretax and primarily included severance costs and timeshare facilities exit costs. Other charges totaled $1 million of pretax earnings and primarily reflect the $3 million favorable impact of the revaluation of residual interests from prior timeshare note sales due to
three default triggers curing in the quarter, partially offset by $2 million of reserves for guarantees and contract cancellations. Of the total restructuring costs and other charges in the third quarter, cash payments are expected to be $5 million. See the table on page A-13 of the accompanying schedules for the detail of these restructuring costs and other charges and their placement on the Consolidated Statements of Income. Finally, adjusted results for the 2009 third quarter also exclude$13 million after-tax noncash charge ($0.03 per diluted share) in the provision for income taxes primarily related to the treatment of funds received from certain foreign subsidiaries that is in ongoing discussions with the Internal Revenue Service. Adjusted results for the 2008 third quarter exclude a $29 million after-tax non-cash charge ($0.08 per diluted share) in the provision for income taxes primarily related to a 1994 tax planning transaction. J.W. Marriott, Jr., chairman and chief executive officer of Marriott International, said, “Revenue per available room across our North American system declined less than expected during the third quarter as leisure travelers responded to attractive promotions and great values in our hotels. With solid cost controls, our hotels translated better than expected occupancy rates to stronger than expected fee revenue and earnings.
“The hotel industry has been challenged by the economic environment. We’ve worked hard to rein in costs and right-size our businesses and those efforts are paying off. Our hotels are in great shape; owners and customers prefer our brands; and we enjoy very strong market share premiums. As we look ahead, while the recovery may be slow and perhaps uneven, our continued focus on driving revenue, controlling costs and strengthening our balance sheet will position us to benefit from an improving economy.” In the 2009 third quarter (12-week period from June 20, 2009 to September 11, 2009), REVPAR for the company’s worldwide comparable company-operated properties declined 23.5 percent (21.1 percent using constant dollars) and REVPAR for the company’s worldwide comparable System wide properties declined 21.4 percent (19.9 percent using constant dollars).
Markets outside North America were impacted by the difficult economic climate, the Olympics, the timing of holidays and concerns about the H1N1 virus. International comparable company3 operated REVPAR declined 28.9 percent (22.3 percent using constant dollars), including a 22.7 percent decline in average daily rate (15.5 percent using constant dollars) in the third quarter of 2009. In North America comparable company-operated REVPAR declined 20.6 percent and comparable system wide REVPAR declined 19.3 percent. REVPAR at the company’s comparable company-operated North American full-service and luxury hotels (including Marriott Hotels & Resorts, The Ritz-Carlton and Renaissance Hotels & Resorts) was down 20.2 percent driven by a 14.6 percent decline in average daily rate. Marriott added 79 new properties (10,380 rooms) to its worldwide lodging portfolio in the 2009 third quarter, including over 8,600 North American limited-service rooms. Three properties (503 rooms) exited the system during the quarter. At quarter-end, the company’s lodging group encompassed 3,362 properties and timeshare resorts for a total of over 586,000 rooms. As of the end of the third quarter, the company’s worldwide pipeline of hotels under construction, awaiting conversion or approved for development totaled approximately 105,000 rooms. The company expects to open over 33,000 rooms in 2009. Reported results for the 2009 third quarter, the adjusted results and the associated reconciliations are shown on pages A-1, A-11, A-13, A-14 and A-17 of the accompanying schedules. The following paragraphs reflect adjusted results where indicated. MARRIOTT REVENUES Totaled approximately $2.5 billion in the 2009 third quarter compared to $3.0 billion for the third quarter of 2008. Base management and franchise fees declined 14 percent to $216 million reflecting worldwide declines in REVPAR in all brands offset in part by fees from new hotels. With continued soft lodging demand trends worldwide, third quarter incentive management fees declined 67 percent. The percentage of company-operated hotels earning incentive management fees declined to 20 percent in the 2009 third quarter compared to 55
percent in the year-ago quarter. Year-to-date 25 percent of company-operated hotels earned incentive management fees compared to 62 percent in the prior year. Nearly all incentive management fees came from hotels outside of North America in the 2009 quarter compared to 68 percent in the 2008 quarter. Worldwide comparable company-operated house profit margins declined 490 basis points in the third quarter reflecting weak REVPAR offset by continued efficiency improvements at the property level. House profit margins for comparable companyoperated properties outside North America declined 430 basis points. North American comparable company-operated house profit margins declined 520 basis points from the year-ago quarter. Owned, leased, corporate housing and other revenue, net of direct expenses, declined $8 million in the 2009 third quarter, to $12 million, primarily reflecting weaker operating results at owned and leased properties and lower corporate housing profits partially offset by a $6 million transaction cancellation fee. Third quarter adjusted Timeshare segment contract sales declined 42 percent to $176 million excluding a $24 million allowance for fractional and residential contract cancellations recorded in the quarter. Contract sales of core one-week timeshare intervals totaled $164 million as marketing incentives encouraged demand. In the third quarter of 2009, adjusted Timeshare sales and services revenue declined 35 percent to $251 million and, net of expenses, declined to $13 million from $47 million in the 2008 third quarter. Adjusted results reflected lower development profit due to continued soft demand for timeshare, fractional, and residential products, and unfavorable report ability. Services profit was also lower largely due to higher maintenance costs associated with unsold inventory and lower rental rates. Adjusted Timeshare segment results, which includes Timeshare sales and services revenue, net of direct expenses, as well as base management fees, equity earnings, non controlling interest and general, administrative and other expenses associated with the timeshare business, totaled $9 million in the 2009 third quarter compared to $49 million in the prior year
quarter. The 2008 third quarter segment results reflected a net $10 million pretax impairment charge for a fractional and residential consolidated joint venture project. The $10 million charge in 2008 included a $22 million negative adjustment in timeshare direct expenses partially offset by a $12 million pretax ($8 million after-tax) benefit associated with the joint venture partner’s share, which is reflected in net losses attributable to non controlling interest, net of tax. ADJUSTED GENERAL, ADMINISTRATIVE AND OTHER expenses for the 2009 third quarter totaled $143 million, a 14 percent decline from the year-ago quarter largely reflecting cost reductions throughout the organization. The quarter also included a $15 million unfavorable impact associated with deferred compensation compared to the 2008 quarter (offset by a similar decrease in the provision for taxes) and $5 million of certain litigation expenses. Excluding these items, general, administrative and other expenses for the third quarter of 2009 declined 25 percent compared to the third quarter of 2008. (LOSSES) GAINS AND OTHER INCOME totaled a loss of $1 million and included a $5 million impairment charge on an investment partially offset by $3 million of gains on the sale of real estate and a $1 million gain on the extinguishment of debt. The prior year’s third quarter gains totaled $7 million and included $2 million of gains on the sale of real estate, a $2 million gain from the sale of the company’s interest in a joint venture and $3 million of returns from joint venture investments. INTEREST EXPENSE decreased $6 million in the third quarter primarily due to lower interest rates on short-term borrowings and lower debt balances partially offset by lower capitalized interest associated with construction projects. ADJUSTED EQUITY IN (LOSSES) EARNINGS totaled an $11 million loss in the quarter compared to $2 million in earnings in the year-ago quarter. Losses in the 2009 quarter primarily reflected losses in four joint ventures and the impairment of one investment. NET LOSSES ATTRIBUTABLE TO NONCONTROLLING INTERESTS, NET OF TAX totaled $3 million in the quarter compared to $10 million in the year-ago quarter.
BALANCE SHEET At the end of third quarter 2009, total debt was $2,660 million and cash balances totaled $130V million, compared to $3,095 million of debt and $134 million of cash at year-end 2008. COMMON STOCK Adjusted weighted average fully diluted shares outstanding totaled 366.3 million in the 2009 third quarter compared to 368.0 million in the year-ago quarter. The remaining share repurchase authorization, as of September 11, 2009, totaled 21.3 million shares. No share repurchases are planned in 2009. On August 6, 2009, the Board of Directors declared the issuance of a stock dividend payable on September 3, 2009, to shareholders of record on August 20, 2009. For periods prior to the stock dividend, all share and per share data in our condensed consolidated financial statements and related notes have been retroactively adjusted to reflect the stock dividend. FOURTH QUARTER 2009 OUTLOOKS While Marriott typically provides a range of guidance for future performance, the current global economic and financial climate continues to make predictions very difficult. Therefore, the company is unable to give its typical guidance. Instead, the company is providing the following assumptions which it is using for internal planning purposes. For the fourth quarter, the company assumes North American comparable system wide hotel REVPAR declines of 13 to 16 percent. For comparable system wide hotels outside North America, the company assumes REVPAR declines of 16 to 18 percent on a constant dollar basis. Total fee revenue could be $310 million to $320 million. Owned, leased, corporate housing and other revenue, net of direct expenses, could total $15 to $20 million. In the fourth quarter, the company assumes Timeshare sales and services revenue, net of direct expenses, will total approximately $15 million, including a note sale gain of approximately $10 million to $15 million. Fourth quarter Timeshare contract sales could total $185 million to $195 million.
The company anticipates that general, administrative and other expenses will total about $185 million to $190 million in the fourth quarter of 2009, a roughly 20 percent decline from the adjusted 2008 fourth quarter amount. Based upon the above assumptions and a 38 percent tax rate, adjusted diluted EPS from continuing operations attributable to Marriott shareholders for the 2009 fourth quarter could total $0.20 to $0.23. The company expects investment spending in 2009 will decline by more than 50 percent from 2008 levels to approximately $325 million to $375 million. This investment spending estimate includes $145 million to $155 million for capital expenditures and maintenance capital spending, $20 million to $30 million for net timeshare development, $90 million to $100 million in new mezzanine financing and mortgage loans, $35 million to $45 million for contract acquisition costs and $35 million to $45 million in equity and other investments (including timeshare equity investments). 2010 OUTLOOK As in 2009, the company is unable to provide its typical guidance for 2010. Instead, Marriott is providing the following assumptions, which it is using for internal planning purposes. For the full year 2010, the company expects the business climate, particularly the pricing environment, to remain difficult. For worldwide comparable system wide hotels, the company assumes full year 2010 REVPAR will be flat to down 5 percent (on a constant dollar basis) with performance strengthening over the year. The company expects REVPAR in international markets to show greater relative year over year strength than North American markets. The company expects to open 25,000 to 30,000 rooms in 2010 as most hotels expected to open are already under construction or undergoing conversion from other brands. Given these assumptions, full year 2010 fee revenue could total $1,050 million to $1,110 million. The company estimates that, on a full-year basis, one point of worldwide system wide REVPAR impacts total fees by approximately $10 million to $15 million pretax. For its timeshare business, the company assumes 2010 timeshare contract sales could be in line with 2009 levels.
The company expects to adopt FAS 166 and 167 at the beginning of 2010, which will impact its accounting for securitized timeshare loans. Assuming the consolidation of the existing portfolio of securitized loans, the company expects assets to increase by $950 million to $1,025 million, liabilities to increase by $1,020 million to $1,120 million, and shareholders’ equity to decline by $70 million to $95 million. Pretax earnings in 2010 would increase by $30 million to $50 million as a result of the accounting change, but no change in cash flow is anticipated. The company expects its 2010 general and administrative costs to be modestly higher than in 2009. As part of its ongoing budget process, the company continues to evaluate its timeshare earnings outlook and investment spending estimates for 2010. Based on its preliminary outlook for 2010, excluding the impact of FAS 166 and 167, the company anticipates continued meaningful reductions in debt levels in 2010.
CHAPTER 4 MARRIOTT E-BUSINESS STRATEGY
Web Sites & E-Business System:
Design a user friendly web portal to enhance customer service and thereby increase the customer retention and attract new customers. 1990: Through IT services can be made easily accessible & boost revenues Need of a single-point interface for all customer transaction 1996: Very Basic Web Site launched – very user friendly Functionalities: Hotel Directories, Reservations, Meeting Planner, Travel Agent Realization and Suggestion Box Unique Features: Meeting Planners and Travel Agent 1998: Siebel Systems, CRM vendor engaged. Investment: $70MM over 2 year period "Take care of your employees and they'll take care of your customer” J.W.MERRIOTT “We wanted same system globally so we could execute our VISION consistently around the world” – Michael Dalton, Sr. VP, Corporate Sales.
The E-Business Strategy
Marriott’s e-business strategy aimed at transforming itself from a property-focused to customer focused company Previously, Marriott measured its financial performance on the basis of the revenues earned for each of its individual property. The e-business strategy emphasized on increasing revenues earned per customer. The four key objectives of the e-business strategy included serving customers proactively, personalizing the service offerings according to the needs and preferences of the customers, enhancing brand loyalty and awareness, and cross-selling...
The Website and E-Business System
The website’s home page had five main icons including hotel directories, reservations, meeting planners, travel agents and a suggestion box. The hotel directories section had details such as the name of the hotel, the address and phone numbers of all the hotels in the Marriott chain across the world. Clients could select the city and the hotel where they wanted accommodation, on the screen. 4.1.3 INFORMATION TECHNOLOGY USAGE:
• Web Site Enhancements: Based on Sales, Customers’, & Operation’s input enhanced the Web Site. • Technology Upgrades: Remains to be Leader in technology throw usage of latest and faster available infrastructure in it segment. • Department of Work & Family: Addresses the home and work balance issues • Staff Skills: Marriot’s approach is not to focus on skills instead on the attitudes & behavior technology thru’ usage of latest and fastest available infrastructure in its segment.
• Fast Pace: Does not waste time on automation and development of most needed and foreseen functionalities. • User Friendliness: Conducts internal/external QC audits on the enhanced/new functionalities prior to deployment. • Support: 24x7 around the year.
4.2 The Benefits:
In 1999, Marriott earned revenues of $150 million from online bookings through its website. Estimates for the year 2000 indicated that every month, the website received three million hits, making it one of the largest viewed websites in the US hospitality industry. By 2002, the website emerged as a money-spinner for Marriott with online sales of $1 bn. On August 25, 2003 Marriott was given the prestigious CIO-100 award and became the only company in the hospitality industry win the award for the fourth time. Marriott was also ranked as the most admired company in the lodging industry in 2003 by the Fortune magazine. Fortune magazine selected Marriott on various criteria such as innovativeness, quality of Management, employee talent, use of technology, social responsibility, financial soundness, long-term value and quality of products and services
Marriott International Case:
(This case discusses the customer-focused e-business strategy of Marriott International (Marriott), a world leader in the hospitality industry and franchisor of a broad portfolio of hotels and related lodging facilities. Founded by J. Willard Marriott, the company is now led by son J.W. (Bill) Marriott Jr. Today, Marriott International has about 3,150 lodging properties located in the United States and 67 other countries and territories. In year 2003, it had a network in excess of 2,600 operating units in the US and a workforce of 145,000 employees, spread over 65 countries across the world. Marriott’s diverse portfolio of popular hotel brands included leading brands such as Marriott, JW Marriott, Renaissance, Ramada International, Courtyard, Residence Inn, and The Ritz-Carlton, among others. Delighting Customers Since its inception, Marriott has focused on providing excellent customer service. The company offered personalized services to its clients, whom it referred to as its ‘guests.’ It had introduced several innovative technologies and implemented them even before its competitors did. For instance, in the 1980’s, the company launched Marriott Automated Reservation System for Hotel Accommodation (MARSHA), a totally new concept of hotel reservation in the hospitality industry at that time. Marriott made continuous improvements in its business processes in its efforts to ‘delight’ its customers. In 1998, the company adopted an e-business strategy to reorient itself to serve its customers better. The company was operational zing a strategy to switch over from a decentralized propertyorientation to a centralized customer-orientation in its services.
CHAPTER 5 PROJECT IMPLEMENTATION
5.1 Data Analysis:
On the basis of questionnaire I have analyze the response of 50 respondents and try to put analysis in tabular form. In this I will deal with questions one by one.
Are you regular customer of Marriott? (A) (B)
50 45 40 35 30 25 20 15 10 5 0 YES 5 NO 45 NO YES
According to [Graph: 1] that most of the customers were regular customer of Marriott hotel. They use hotel frequently on time. One of the important reasons of using Marriott hotel was their e-business strategy and customer relationship. 2 When you visited hotel last time?
(A) Last Week (B) Last month (C) Last 6 month (D) Last Year (E) More than 1 Year
According to [Graph: 2] that customer of Marriott hotel used on different time period. In that survey customer used Hotel like this, 5 customers used Hotel since last week, 15 customers
used hotel since last month, 10 customers used hotel since last 6 months, 15 customers used hotel since last year and 5 customers used hotel since more than 1 year.
3 (A) (B)
Are you using online services of Marriott? Yes No
According to [Graph: 3] that maximum customer used online service of Marriott hotel. 40 people believed that Marriott online services are good and they provide fantastic online services while 5 people did not like online services.
If yes which service you like most? (A) (B) (C) (D) (E) Advance Booking Mail Services Room information Message services Mobile alert
According to [Graph: 4] that customers who like to used online services they preferred different types of services. Marriott provides different services to customer. Customers using different services according their test and preference.
Are you satisfied with online booking?
(A) Yes (B) No
According to [Graph: 5] that Marriott online booking service is good and 46 people would like to used online booking. While 4 people didn’t like it out of 50 peoples.
Do you like e-business of Marriott?
(A) Yes (B) No
According to [Graph: 6] that Marriott e-business is providing good and useful data for the customer. 42 peoples like it while 8 people didn’t like it out of 50 peoples.
Is the web site of Marriott providing useful information?
(A) Yes (B) No
According to [Graph: 7] that Marriott designed their web site such way that customer can easily find all data from their site as well as they provides their financial data on their web site. So that 43 people like web site while 7 people didn’t like out of 50 peoples.
If no then give your opinion for improving the web site?
(A) Website design (B) Information about vacant room (C) Update information (D) Specific ____________
According to [Graph: 8] that Marriott web site was created good but some customer didn’t like it because of some reasons. They provide some useful information to improve it.
Duration of online queries response? (A) (B) (C) On that day Within two days Week
According to [Graph: 9] that Marriott did good while fulfill the customers queries. Most of the customer got their queries on that day. 5 customers didn’t get their queries on that day.
Your suggestion for improvement of Marriott e-business. ___________________________________________
Search Engine Optimization can further enhance the customer experience None keep up the good work Online Payment Quick information provide of queries
SEO 15 KEEP UP GOOD WORK ONLINE PAYMENT INFORMATION ABOUT QUERIES 20
According to [Graph: 10] that most of the customer would like to use Marriott e-business. Different people use different services of e-business. Some customer gives suggestion to add some more services.
FINDING AND SUGGESTIONS
The strategies that have been adopted by Marriott are excellent compared to other service providers.
E-business strategy of Marriott hotel is good then other service industry. The respondents have got good impression about Marriott E-business strategy.
Most of the respondents of Ahmedabad have used Marriott hotel frequently because of their online services.
The customers of Marriott are satisfied their services and care of customer through e-business.
• The customers of Marriott are brand loyal and they prefer their online business.
Marriott should expand Search Engine Optimization can further enhance the customer experience.
Marriott should update their web site and provide their financial position. Marriott should use online services to attract their customer.
Marriott using latest technology but they have to improve it make customer satisfied.
Marriott should expand their message and mail system to make customer awareness about new services.
The feeding frenzy surrounding e-business may be new to this generation, but the same patterns of behavior occurred in the development of earlier technologies, including the steam engine, telegraphy, automobiles, airplanes, and radio. Marriott has followed same strategy of e-business. They used latest technology as well as online services. So customer would like to use their e-business. Customer uses different services of e-business like online booking, online payment and vacant room information. Many hotels their in world but due to strong e-business strategy Marriott make their name top. Surely, it’s confusing, too many thought everything “e” was a magic bullet. But the technology that fueled that initial Internet bubble is what fuels the successful businesses of today. So, in the long term, e-business changed how business is conducted and it is here to stay. We are looking at the future business of the world.
BOOKS: PHILIP KOTLER (13th EDITION) NEWS PAPER: BUSINESS STANDARAD
Marriott international case study
WEB SITE: www.marriotthotels.com www.learnmarketing.com www.e-business.com www.wikipedia.com
(Questionnaire) MERRIOTT SURVEY
Name: Age: Gender: Type of Business: Mobile No:
Are you regular customer of Marriott? (A) (B) Yes No
When you visited hotel last time? (A) (B) (C) (D) (E) Last Week Last month Last 6 month Last Year More than 1 Year
3 (C) Yes
Are you using online services of Marriott?
No If yes which service you like most? (F) (G) (H) (I) (J) 5 Advance Booking Mail Services Room information Message services Mobile alert
Are you satisfied with online booking? (A) (B) Yes No
Do you like e-business of Marriott? (C) Yes (D) No
7 (C) (D) 8
Is the web site of Marriott providing useful information? Yes No If no then give your opinion for improving the web site? (A) (B) (C) (D) Website design Information about vacant room Update information Specific ____________
Duration of online queries response? (A) (B) (C) On that day Within two days Week
Your suggestion for improvement of Marriott e-business. ___________________________________________