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MKT42290 - Digital Marketing Strategy & Campaign Planning 8 December 2016

Name: Gabriella De Domenico

Student Number: 16204455

Master: Msc Digital Marketing (Full Time)

Module: Digital Marketing Strategy & Campaign Planning (MKT42290)

Accor Hotels and the DigitalTransformation

INDIVIDUAL ASSIGNMENT

Critically evaluate what the problems were for Accor Hotels, the importance of
digital transformation & content, and how Olivier Arnoux developed his strategic
plan of attack for enriching customer experiences through the power of digital
marketing?

Outline:

1) Introduction

2) Accor Hotel profile


- Competitive Landscape

3) Digital Disruption variables


- New Actors
- New Content
- New Customer Journey

4) Main Problems assessment


- The shift of power and the content challenge
- SWOT Analysis

5) Strategic Plan Recommendations

6) Conclusions

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MKT42290 - Digital Marketing Strategy & Campaign Planning 8 December 2016

1) Introduction

The French hotel chain Accor has a global presence and a long history, with almost four

thousands hotels in the entire world and almost 50 years of experience. Accor has

experienced diverse market changes throughout the last decades, shaping differently its

Brand and targeting new market segments, and finally changing its leadership quite

frequently since 2005. One of the biggest challenge currently facing concerns the digital

transformation which has totally disrupted the hotel environment and changed the actors

playing in the market and the behavior of the users. As a result, the customer journey is

today totally transformed and involves numerous online platforms and new source of

contents, which have made the customer more informed and powerful. Consequently,

Accor needs to plan an innovative online and offline marketing strategy in order to add

value to the customer experience and to emerge from the competitors. In the following

analysis Accor Hotel strengths and weaknesses will be explored, and recommendations

for the future marketing strategy will be assessed, taking into account the challenges

offered by the digital era and the new external variables of the online customer journey.

2) Accor Hotel profile

Accors is an hotel chain founded in Lille, France, in 1967, which experienced a great

expansion of the market share throughout five decades, being currently present with

510,000 rooms in 92 countries in the world.

Accor addresses three market segments: the Luxury market (16%) with Sofitel, The Sebel,

Pullman, Mgallery and Grand Mercure brands; the midscale one (45%) with Novotel,

adagio, Mamashlter and Mercure brand; and the economy/basic segment (39%), with Ibis

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MKT42290 - Digital Marketing Strategy & Campaign Planning 8 December 2016

and HotelF1 brands. It is worth of notice that the above mention structure differs from the

market segmentation trends assessed in the hospitality sector (see following Exhibit 1).

Exhibit 1

After a long period of management changes, the CEO Sebastien Bazin introduced a more

efficient Asset light plan for the company, establishing from 2013 the following business

structure: 40% Manage hotels - 40% Franchised hotels - 20% Owned hotels.

Competitive Landscape

From the Accors competitor analysis emerged that competitors are the following

worldwide, structured and global hotel companies: Starwood Hotels and Resort worldwide

Inc., Marriott International Inc., Hilton Worldwide, InterContinental Hotel Group Plc and

Wyndham Worldwide Corp. All the five brands performed strong business figures and

long experience in the luxury, middle scale and budget market segments. An important

variable is represented by the partnership network developed by each competitor with

strategic company in the Tourism sector, as Airlines, Cruises lines, high profile Restaurant

and travel Agencies.

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MKT42290 - Digital Marketing Strategy & Campaign Planning 8 December 2016

3) Digital Disruption Variables

Nowadays the tourism and hospitality sector has been deeply shaped by the latest

technological wave which have transformed the competitive landscape, the amount and

the type of actors involved in the purchasing process as well as the consumer behavior.

The phenomenon is not new, similar transformations have been experienced by other

industries, and hotel one is currently facing an adaptation phase. The common disrupting

factors are the introduction in the market of the sharing platforms, the mobile payment and

the broad and fast connectivity opportunities, both for sellers and consumers.

The main digital variables are going to be analyzed as follows: new actors in the market

and new type of content production has influenced the customer journey in each phase.

New Actors New Content


- OTA
source source
- Review sites
Hotel User
-Social Media
- Aggregate MetaSearch Educational Intent of Help other
- Alternative Lodging Option Content
consumers
(altruistic action)
(entertain) Sense of
belonging to a
community
Persuasive
Content Intent of improve
the service/
(convert)
revenge

COSTUMER JOURNEY

Inspiration Comparison Booking Travel & stay Review

REACH ACT CONVERT ENGAGE

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MKT42290 - Digital Marketing Strategy & Campaign Planning 8 December 2016

New Actors

The market is nowadays composed by new digital players which have affected negatively

the former dominating role of the brick and mortar travel agencies. Social networsk as

Facebook, Twitter and Instagram, now play a huge role in inspiring with visual content,

engaging and informing consumers with reviews a useful guide content. Online Travel

Agency (OTA) gave the opportunity to compare benefits and experiences of each hotels

and book the best option; Metasearch sites have the aim of compare prices in the most

transparent way, Review sites give the chance to read peer-to-peer comments and have

some internal insights, Travel blogs and forum inspires the consumer about the whole

journey and sharing platform as Airbnb does not represent a minor competitor, since it has

overcome Marriott, Starwood and Hilton hotel chains in terms of capitalization of the

market. As a consequence, Accor should apply a omnichannel approach in order to

satisfying accurately each consumer need, in each phase of the purchase-cycle, through

the right channel.

New Content

The rapid production and accumulation of content online is the second main digital

variable which has a great impact on the customer journey. The online content production

can be divided by two groups, depending of the source: the content produced by the Hotel

and the content independently generated by the Users.

The owned content has the aim of educate the audience about the hotel characteristics

and benefit, with descriptions, photos, videos, available extra-services, engaging the target

with added value information and emotional inspirations. On the other hand, the content

could be also persuasive, orientated towards the conversion (i.e. transparent price list,

promotional content, targeted deals).

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MKT42290 - Digital Marketing Strategy & Campaign Planning 8 December 2016

The content produced by the consumers has a crucial role because it involves the trust

among users, which has always impacted largely the social dynamics andnespecially the

consumer behavior. Authentic photographs and honest reviews are the main ingredient of

the e-reputation of hotels. This phenomenon is driven by altruistic purposes, since users

do not have a direct benefit from it, they post reviews in order to help other consumers

feeling part of the community, on the one hand, and to share good and bad experiences in

order to help the hotel to improve services or report a failure experience, on the other

hand.

New Customer Journey

The above mentioned two variables affect the costumer journey in each phase. The

consumer could be indirectly and direclty influenced by visual and descriptive content

(photos, story-telling video and texts, how to guide, etc.) when the holiday destination

has to be decided and the hotel still have to be booked. Travel Blog and Forums, as well

as Social channels plays a great role during this inspiration phase. When the active

research begins, the user will take advantage from OTAs and Metasearch site in order to

read review, compare price and book the best offer. During this phase the user is driven by

different need, not only price related, since the main concerns regard also the risk of

choosing a poor quality option. Also social media play a role because can generate brand

awareness and sense of loyalty towards a brand which is recognized by the community

influencers. It is worth of notice that the booking through a third party sites has high

commission costs for the hotel, which have the interest of keeping the consumer on the

website after the first purchase through loyalty program. Finally during and after the

staying period the hotel should encourage the consumer to give feedbacks and share

positive reviews, engaging the user and apply remarketing tactics.

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MKT42290 - Digital Marketing Strategy & Campaign Planning 8 December 2016

4) Main Problems assessment

Taking into account the above mentioned variables, Accor is facing numerous challenges

because of the current digital disruption, and the main problem can be grouped as

follows:

1. The shift of power

Institutional trust has been substituted by peer trust: the consumer has gained power

(see exhibit 2) and the company has to focus on a customer-centric approach

transformation. The users have more information and can influence other users sharing

experiences and comments, influencing negatively or positively the company reputation

online.

Exhibit 2

2. The content challenge

The great accumulation of content online comes from different sources, is posted on

numerous channels, and is produced with different aims. Accor has to plan a digital

marketing strategy able to tackle each of the following aspect:

- Monitoring the bran reputation and receive the feedbacks


- Producing content for each channel for each aim
- Encouraging users to share positive experience

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MKT42290 - Digital Marketing Strategy & Campaign Planning 8 December 2016

SWOT Analysis

SWOT

STRENGHTS OPPORTUNITIES
- Global Presence - Leveraging the interaction and feedbacks with guests
- Target each Market Segment in order to improve the service
- Asset-light management - Encouraging satisfied and loyal customer to share the
- Good level of feedbacks experience becoming influencers

WEAKNESSES THREATS
- Other players in the market have stronger partnership - The market is highly competitive with strong push to
- Old Style feedback collection innovate
- Accor team is not incorporating digital variable into in - New competitor with light asset costs, as Airbnb
the everyday duties -Customer gaining more power
- Online Information about the Brand are not completely
under Accor control

5) Strategic Plan Recommendations

In order to complete the transformation towards a customer centric business, and tackle

the first identified problem (the shift of power), firstly, Accor should use social channels

and review site as a source of honest feedback in order to improve its product and service.

Secondly, Accor should improve and leverage the loyalty programs, addressing each

satisfied customer with personalized and targeted deals in order to encourage to use the

owned booking platform on the website (saving commissions costs to OTAs), and to share

the positive experience with other users.

The content challenge should be tackled on each phase (Monitor, Produce, Encourage)

addressing the consumer need with the right content and channel.

Firstly, Social Media Listening activities should be put in place in order to monitor the e-

reputation. Secondly, the Accor staff should be trained in order to integrate digital

capabilities and consume behavior understanding within the everyday duties. Thirdly,

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MKT42290 - Digital Marketing Strategy & Campaign Planning 8 December 2016

each phase of the customer journey should be addressed with specific actions, targeting

each stage with the content and the platform above mentioned.

6) Conclusions

Accor is an established worldwide 50-years-experience hotel chain currently facing

numerous digital challenges, represented by new actor in the market, as OTAs, Review

site, Travel blogs and Social network and the rise of mobile connectivity, which have

influenced the costumer journey in the hotel and tourism sector and shaped and

empowered the customer. The competition has risen, with new actor as Airbnb, and the

costs have grown due to the commission for third party websites. Accors needs are to

assess an innovative online marketing strategy with the aim of enriching the customer

experience and emerging from the competitors. After the analysis of the emerging digital

threats and Accor Hotel strengths and weaknesses, two main problems have been

identified: the shift of power and the content issue.

For these reasons, Accors digital marketing strategy should be focused on two main

aspects: on the one hand, Accor should adopt a customer-centric approach, integrating

feedbacks and review and follow its e-reputation in order to improve the services. On the

other hand Accor should put in place marketing tactics in order to Monitor (i.e. SML tools),

Produce and Encourage content creation, in order to preserve the brand awareness.

Reference:
Dubois D., InYoung C., Niessing J., Wee J., (2016) AccorHotels and the Digital Transformation: Enriching
Experiences through Content Strategies along the Customer Journey, INSEAD

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