Jumeirah Al Naseem is a luxury hotel located in Dubai, United Arab Emirates. It is part of the Jumeirah hotel chain, which also operates in the Middle East, Europe, and Asia. The main principle of the company is to provide luxury service while adhering to high standards of hospitality. Al Naseem offers numerous high-quality restaurants, swimming pools, beaches, spa and fitness centers, and much more (“Jumeirah Al Naseem,” n. d.). The hotel chain adopts various marketing strategies to maintain and expand the business. Although, as an individual hotel, Al Naseem is limited in the implementation of certain marketing options, some of them may be useful for the hotel in the post-pandemic period.
Intensive Growth Strategies
The primary task of marketing management for companies should be finding and using opportunities to improve the existing business. Intensive strategies imply the strategic growth of a company in relation to markets and products (Kotler et al., 2019). For the successful implementation of this approach, the product-market expansion grid is used, which includes several directions. In turn, each of them is aimed either at the improvement of existing markets and products or at the development of new ones.
Market Penetration Strategy
The marketing penetration strategy is aimed at the use of existing products in the current market by the company. This approach can include various instruments such as price changes, opening new branches of the organization, additional advertising, or acquisitions of other companies for expansion. The main goals of the strategy are to increase sales, influence, and share of an active market (Denault, 2018). An example of a strategy can be lowering the price compared to competitors to increase sales, which is useful when starting the business.
- It is recommended to increase visibility and use additional advertising since the hotel is not as popular as the other ones in the chain.
- Additionally, a temporary reduction in prices for services is possible.
Market Development Strategy
A market development strategy involves leveraging the company’s existing products in new markets. The use of the approach can serve three purposes: entering a new segment, acquiring new customers, or expanding into a new geographic region (Tajvidi & Karami, 2016). A classic example of the application of such a strategy is the expansion of the organization in the international space, in particular from the European to the Asian market.
- It is recommended to offer services to different demographic groups, such as those with comparatively lower income.
Product Development Strategy
A product development strategy involves introducing a new product to customers in an already active market. The approach is similar to market penetration in terms of goals, but instead of increasing volume through pricing, communication, and incentives, it focuses on expanding the offering (Chernev, 2020). An example of using this approach is the creation of a diet cola, which satisfied the female part of the company’s customers mostly.
- It is recommended to develop and implement new types of services in the hotel, including touristic ones.
This strategy is the riskiest, as it involves a company entering an unfamiliar market with a new product. Reasons for using this approach may be the desire to move to a more promising market from a declining one, directing the resources of the parent company to develop new territory, or expanding influence (Tajvidi & Karami, 2016). An example of the strategy application is Disney’s acquisition of ABC to expand its influence in television. It is important to note that related diversification is only possible in similar areas, such as films and television, for instance.
- It is recommended to develop new related areas under the brand of the hotel, for example, restaurant business or entertainment.
Integrative Growth Strategies
A company can take a different approach to increase its sales and revenues. Integration strategies involve the acquisition of another organization or supplier or the merger of two companies (Kotler et al., 2019). Thus, using the strategy, two firms in the same business can integrate to create a larger organization. The approach also consists of several directions, which involve acquiring or merging with different types of businesses. However, the application of the strategy requires a serious evaluation of risks and the current state of the market.
This type of integration consists of merging two competing companies in the same business. Nevertheless, the implementation can also occur through the acquisition of one firm by another. The main advantage of this approach is to simultaneously increase market share and eliminate a competitor (Chernev, 2020). The implementation of the strategy can also lead the organization to monopolize the production of goods or services. An example of using the strategy is the acquisition of Starwood Hotels by Marriott in 2016, resulting in the world’s largest hotel chain.
- Since Al Naseem is part of the Jumeirah chain, horizontal integration is not possible for it.
Vertical integration as a marketing strategy can be either forward or backward. Backward integration implies the acquisition by a company of a supplier organization or part of it to simplify and reduce the cost of supplying raw materials (Li & Chen, 2018). The acquiring firm may also seek to limit competitor companies’ access to a particular resource. An example of using this strategy is IKEA’s acquisition of forests in Romania in 2015 to maintain resources sustainability at affordable prices.
- It is recommended to purchase a travel agency, which will be a resource for the hotel to attract new customers.
- It is also possible to purchase local food producers for a more varied menu.
In contrast to backward integration, using forward one, the organization acquires a company related to the post-productive process. Thus, the firm eliminates the medium and becomes closer to the client, receiving increased profits (Cotterill, 2019). The acquiring organization extends its control not only over product distribution but also over local marketing. An example of the application of the strategy is Apple, which sells its products in branded stores, as any other major brand.
- The hotel is already part of the chain, providing direct services to customers. It is situated outside the production process, so forward integration is not available to it.
Unrelated Diversification Growth Strategy
The strategy is similar to related diversification but implies the introduction of a new product into an unfamiliar and unrelated to the current activity of the company market. Thus, neither the product nor the industry has a direct connection to the organization’s existing business (Oladimeji & Udosen, 2019). An example of the strategy is the development of a cruise ship chain by Disney. The filmmaking, television, and entertainment company expands its influence into the tourism and hospitality industry.
- Unrelated diversification is only possible for the hotel chain, whereas Al Naseem cannot make such decisions independently.
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Kotler, P., Keller, K. L., Brady, M., Goodman, M., & Hansen, T. (2019). Marketing management. Pearson UK.
Li, W., & Chen, J. (2017). Backward integration strategy in a retailer stackelberg supply chain. Omega, 75, 118-130. Web.
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Tajvidi, M., & Karami, A. (2016). Product development strategy: Innovation capacity and entrepreneurial firm performance in high-tech SMEs. Springer.