COURTYARD By MARRIOTT

Presented By – Dhara MadhvaniJanhobi DeyAbhishek Hawal Saurav Kumar

New Product Development Process

Opportunity scan• Large urban hotels would reach saturation

by mid- 1980s• Moderately priced hotel constituted 45% of

all hotels• Competition was not doing well

Creation of a small cross-functional team• Small team was formed to execute the plan

Analyzing the industry and competition Identifying different types of customers

• Security seekers • Functional roomers

Identifying major facets •External Surroundings, room, lounge, services,

•leisure activities and security

Implementation of Preference measurement approach- Marketing research.Developing a core conceptConstructing a prototypeTest marketing Launching

Study Surveyed : (1982)263 Middle Level Business Travelers

83 High End Business Travelers

255 Business Travelers

(Avg $35 for filling questionnaires)

Location : Atlanta , Dallas , San Francisco & Chicago

Within Each Above Market (Suburban Areas & Nearby Small Towns

Randomly)

Each Sub Area Respondents were selected Randomly By Telephone

(Types Of Trips they took , Income , Accommodations they usually choose)

CRITICAL APPRECIATION OF RESEARCH TECHNIQUES USED

Seven Facets for Optimal Hotel Design1. External Factors

2. Room

3. Food Related Services

4. Lounge Facilities

5. Services

6. Facilities for Leisure

7. Security

Problem In 80’s : 8. Running Out Of Good Sites For Continues High Growth Rate

9. Develop New Hotel Chain For Travelers who were not satisfied with Current Hotel Offerings

10.What can Be done to attract 2 specific types of Travelers: Business Travelers (6 Times a year ), Pleasure Traveler (2 times in a Year)

11.To Provide Value For Money

12.Minimize CANNIBALIZATION of other Marriot Hotels

13.Marketing Positioning for Competitive Advantage

Data Collection :

Pretest was conducted before final survey (both Administered , supervisors available to guide them)

•Categorical Conjoint Analysis:

Characteristics of the Hotel (chose Single

comparison of features )

•Seven Card (Seven Facets)

Each Card had 9 more attributes with the associated price

Respondents had to Compare with the usual hotel

Best Describe the current hotel mark

Completely Unacceptable

What you want or willing to Pay

ELASTICON Model : Price Elasticity for Various Hotel Concepts

•Compare with new existing hotels (Marriots , Holiday Inns , La Quinta) and tested new concept hotel of various prices on basis of price , external factors , food , beverages , security , etc)

•Respondents received 5 cards ( each card 4 existing , 2 new concept hotels with prices with 32 combinations )

•Allocate 100 points to hotel price combinations for how likely they would stay on that hotel with those price combinations

LOCATION Analysis

•Allocate 100 points to different chosen locations based on closeness to business , shopping , sightseeing ,night life etc)

Positioning

•Locations were on the basis of closeness to business, shopping, sightseeing, nightlife, theaters, airport and highways.

•Reaction to various statements which suited the hotel features most

•(“A Special Little Hotel at A Very Comfortable Price” )

MDS (Multi Dimensional Scaling )

•Visualizing the various similarities, perceptions & preferences from different Hotel Features & and services.

MDA (Multi Discriminant Analysis)

•To find Discrimination in various segments ( low business vs. high business vs. Pleasure)

PROTOTYPING

•Prototype room was constructed with 3 possible designs at Gaithersburg , Maryland.

•Movable walls , room layout and size to test customer preferences

Study findings :

People did not mind smaller rooms than the intended designs , as long as the rooms were shorter and not narrower, this discovery help Marriot to decrease the depth of the rooms which saved companies $80,000 in construction costs

TEST MARKETING

Georgia opened its first COURTYARD in October 1983

Reasons for selecting Atlanta :

•Demographically Favorable (Business Travelers)

•Marriot had 4 hotels (Cannibalization of Sales could measured)

•Had Many competitors like Holiday INN & Ramada Inn

•Construction could begin soon, less approvals

RESULTS

•Occupancy in first six months : 90 %

•No Signs of Cannibalization

•High marks from guests comparing with high priced competitors

•85% Occupancy Rate in 2 years

•Feedback in few changes in room designs

LAUNCH OF PRODUCT •Launched in 1985

• Seven Major & Seven Secondary Market

•Goal of opening 30-40 Courtyard’s a Year in 1990’s

•Marketing : PR & Direct Mail , Limited use of outdoor

advertisements

•Mail campaign : Business Travelers for Word of Mouth

Advertising

•Print Advertisement: “ A hotel you will proudly recommend”

with main functional features

•Build in Cluster (8-10 Courtyards in Metropolitan Area) with a

central administration office for cost cutting 

SUCCESFUL ROLE OF MARKET RESEARCH

•The research driven process was a success in hotel designing

•Since 1986 no “Core” Changes were made in the Courtyard Concept

•Changes Depending on Weekend Pleasure Travelers & Business Travelers

•1992’s Advertising : “Courtyard : The hotel designed by Business Travelers”

•Marriot has taken customer satisfaction Surveys continuously since 1984

•Spent $5,00,00 - $ 1 Million a year for such researches throughout middle & Late 1980’s

ORGANISATIONAL ISSUESDuring the development of Courtyard

conflicts arose internally due to:

•Fear of damaging the image of Marriott

•Fear of cannibalizationMany employees found difficult to adjust to the culture of courtyard

Take away

• In depth analysis and various market research techniques

• Importance of customer oriented product

• Articulation of concepts from the case

• Taking risks

Sirs learnings

• To identify mgmnt problem

• Strategic problem

• Npd process

• Mkt research

• Research design

• STP

• Value creation

• Organizational issue

Thank You