BHM206 Case Study of Banyan Tree on Service Marketing Principles and Theories Assessment Answer

Executive Summary

The concept of services marketing differs from product marketing since services are physically intangible. The current study explores the services marketing efforts and approaches by Banyan Tree, one of the leading hospitality groups based in Singapore. The group offers a unique range of services and value propositions to the clientele including beautiful natural scenarios, complete privacy and intimacy of the hotel and resort accommodations, private swimming pools and spas inside the resorts. The services marketing approaches of the group have been explored using the service concept model, the 4P’s of marketing, the word-of-mouth marketing and the SERVQUAL theory. The recommendations that can be implemented by the organisation to improve their services marketing approaches and services quality include customisation of the services, implementing reasonable pricing, maintaining efficient and rapid public relations and contributing towards the well-being of the employees.

Introduction

Services marketing, as defined by Wirtz & Lovelock (2016), refers to the organisational functions, as well as, a systematic set of processes that are utilised by businesses to identify, develop, deliver, as well as, communicate value to both the prospective and the existing clientele. Furthermore, service marketing also addresses the processes used by businesses to maintain relationships with the clientele in an advantageous way for both the businesses, as well as, the stakeholders. The current project analyses the case study of Banyan Tree concerning different service marketing principles and theories.  

Overview of the Business

Founded in 1994, Banyan Tree has achieved the spotlight for becoming one of the leading multi-branded yet independent hospitality groups in the world. Based in Singapore, the brand offers a wide range of services including hotels and resorts, residential developments, golf hosting, as well as spas and galleries. The group currently operates in over 55 locations in a total of 23 nations and currently owns 25 hotels and resorts, 65 retail galleries, 68 spas and 2 golf courses. From the year of commencement till now, the business has achieved over 400 awards including ‘Seychelles Best Spa’ and ‘Seychelles Best Resort from the World Travel Awards. The company specialises in the luxury hospitality segment.    

Discussion

In the context of services marketing, the research by Vendrell-Herrero et al. (2018) clarifies that there are three fundamental attributes that the offering must meet to be considered services. The first attribute that offerings must meet is being physically intangible to be considered services. Secondly, services need to be based on an activity rather than an item that can be held. It may be related to generating or offering specific types of experiences to the consumers. Furthermore, Vendrell-Herrero et al. (2018) consider that for offerings to be considered services, to some level, the manufacturing or production of the offerings and their consumption need to take place simultaneously.

Service Marketing Model

The first principle of services marketing that can be used concerning the services marketing strategies of Banyan Tree include the service marketing model presented by Ali, Amin & Cobanoglu (2016). Within this model, there are five stages of service marketing including the concept of the service, the service accessibility, the interactive client communication or interaction, auxiliary services, as well as, the influencers associated with generating consumer interest and engagement. The first stage is the service concept that acts as the central core of the offering. Within this stage of service marketing, the responsibility of the companies is to thoroughly understand and evaluate the wants, as well as, needs of a specified group of potential consumers and the analysis of how such needs and wants could be made. The central concept of the service offerings of Banyan Tree was based on ensuring complete privacy for the guests in the resorts. The hotels, as well as, resorts that are developed by the group provide visitors with a ‘sense of place’ that enriches the heritage and culture of the visited destination. To create an exotic sensuality for consumers, the resorts of the brand are designed to blend into the natural landscape of the adjacent environment whereas, to ensure complete visitor privacy, the group uses natural foliage, as well as, boulders to make the resorts feel like their own world. 

The second component of the model, being service accessibility, is ensured by the group through the development of 25 resorts with similar value-added offerings for clients in several locations to reach the maximum consumers. The third component of the model is interactive client communication and interaction in which the fundamental focus is placed upon the development of interactive methods to satisfy consumer queries and doubts and providing auxiliary services to facilitate the obtention of the service for the consumers. In the context of Banyan Tree, extensive public relations and global marketing programs are maintained and operated by the company. The firm, throughout its years of establishment, has developed healthy relationships with international travel editors, as well as, writers that allow the brand to obtain editorial coverage on press articles, blogs, YouTube videos and on a wide range of social media platforms. Furthermore, the group also provides booking and information providing services through the official website through which the consumers can reach service representatives directly. Finally, coming to the influencers of consumer engagement, as argued by Ali, Amin & Cobanoglu (2016), companies must engage the consumers in the production processes itself and thereby, customers can influence the outcomes of the final offering. This stage of the model can be evident in the context of Banyan Tree from the analysis of the specific offering packages developed by the brand for specific classes of consumers. For instance, the ‘intimate moments’ package offered by the company was created specifically for couples to ensure that they have a vacation time that they will never forget.

4 Ps of Marketing

As clarified, service offerings are inherently different from product offerings of companies and therefore, while marketing a service, a brand must engage in rigorous decision-making and modifications to market a service (Grădinaru, Toma & Marinescu, 2016). The 4P’s of marketing include the product, price, place, as well as, promotion. The product refers to the services in this context and is associated with listing and highlighting all the specific attributes and features of the services. The services of the group are enriched with several features including private pools, spa treatment rooms and jacuzzi, naturally beautiful sceneries and natural landscapes and the luxurious experience added to ensure the privacy of the visitors.

The firm primarily operates in the luxury resorts market and thereby, the pricing strategy of the firm is influenced by ensuring premium yet competitive rates for the consumers that can generate unique value propositions for them. The firm identified the opportunity to penetrate the market by addressing the price gap and while ensuring to meet the client demands in the market including their needs for obtaining private and intimate accommodations.

The promotion component of the brand was maintained through rigorous brand marketing and promotional strategies carried out by international marketing and advertising agencies. The group specifically interacted with travel editors, writers and bloggers as a means of increasing their reach to the target audience through inviting such individuals to the resorts and by sharing their experiences with the intended consumer groups.

The place component of the brand was maintained through the establishment of the resorts throughout a total of 23 countries where the firm currently operates to ensure that the group was able to reach the maximum possible consumers throughout the world. The places where the company has developed their resorts are highly demanding tourism spots and are known for their natural scenic landscape, as well as, the enriched culture and historical heritage of the population.

Word-of-Mouth Principle of Services Marketing

Fundamentally, the word-of-mouth approach to services marketing can be referred to as the method of disseminating or transmitting information through the consumers with spoken communication and interaction from other consumers that have previously obtained the services of the brand and have been satisfied with the brand’s offerings and unique value propositions (Babić Rosario et al. 2016). In this context, the notion of consumer satisfaction is pivotal as with the lack of consumer satisfaction and interest, the word-of-mouth marketing has the potential to work against the brand reputation of the company and damage its image throughout the clientele. Therefore, ensuring to meet the unique value propositions that the company offers such as maintaining the privacy, as well as, the intimacy by offering suitable accommodations to the clients is a must for the organisation. It is clarified from the case study that the firm profoundly engages in word-of-mouth dissemination of information to market the brand and increase its brand awareness, as well as, the image through travel editors, bloggers and writers. However, the firm further uses additional strategies to improve its unique value propositions. The firm closely operates with village cooperatives and NGOs to revitalise the local communities in the markets where it operates. Furthermore, in the locations where the resorts are located, the brand strives to promote the natural and human environments. As opined by Eshra & Beshir (2017), the unique offered value, along with the adherence to corporate social responsibilities allow the brand to garner substantial attention and interest from the consumers.

Internal Marketing to Promote Service Quality

The service quality or the SERVQUAL theory denotes the concept as the existing gap between the perceptions of consumers concerning the service received and the expectations of the consumers concerning a service offering. As postulated by Kasiri et al. (2017), service quality is an integral service concept that indicates the extent of consumer satisfaction and relates to the improvement of the productivity, efficiency, as well as, the success of an organisation. In the context of Banyan Trees, the service quality is constantly improved through the creation of brand ownership among the employees. Not only does the company provide the employees with all necessary training suitable for five-star service establishments, but also offers employees with the ‘Banyan Tree Experience’ by allowing them to get a taste of what it feels like to stay in the resort. The group perceives that such an experience would allow the workers to relate to the experiences of the consumers and assess their needs in an improved manner contributing to the enhancement of service delivery. The organisation inspires employees to be creative and exercise sensitivity. The group takes staff welfare very seriously and provides a wide range of amenities such as AC buses to free childcare and medical services. In this context, Kasiri et al. (2017) postulate that employee satisfaction is a key to generating improved service quality and enhanced service delivery as employees are the ones that carry out all the functions and operations of the companies.               

Conclusion

In conclusion, it may be stated that Banyan Tree maintains the services marketing approaches of the brand by ensuring that the offers can fully meet and satisfy consumer standards and expectations. The unique value propositions of the services can be observed in association with the exceptional privacy and intimacy of the accommodations offered that differentiates them from several other premium resorts and hospitality groups in the industry. Overall, the discussion and analysis of the theories have facilitated the comprehension of their practical implications in the context of the company and how the brand maintains their service marketing approaches to meet consumer demands effectively and efficiently. 

Recommendations 

1. Customization of services: 

Banyan Tree is already fulfilling the main 6 elements of services marketing as discussed in the services marketing model. However, there is a growing need for customization of services based on individual preferences, especially when the company is intending to expand into other countries like the USA and the Middle East. The present offerings are suitable and perfect for customer satisfaction and from a services marketing point of view,  customising the offerings and bringing in more services can help the company to attain a larger customer base. This is under Pham & Ahammad, (2017) comment which sheds light on the fact that brand awareness requires companies to provide offerings according to customer requirements. Customers will pay attention to marketing activities like advertisements only if the offerings are following their demands.

2. Reasonable pricing: 

The quality of service provided by Banyan Tree Resorts is unmatched in the Asia-Pacific region. However, the services offered are not only costly but expensive. Therefore, reducing the prices and developing some packages under reasonable rates can help the company to attain a consumer-friendly resort status which will help in increasing the brand equity.

3. Making use of public relations: 

According to Hennayake (2017), one of the key driving factors of success for organisations is to develop good public relations.  The case study and the analysis of the word of mouth theory show that the company is already having good customer relationships and through its public relation management principles, it has been able to develop a loyal customer base. However, the public relations method is not yet used to its full potentiality that can help the company to initialise large scale word of mouth marketing enjoyed by some of the world’s best companies. In such a scenario, the proper use of public relations is required.

4. Focusing on employee wellbeing: 

Banyan Tree has already done marvellous work in this section though there still needs some work as employees of every department needs to be included in the wellbeing schemes including insurance and cash benefits. It will work as an internal marketing policy which targets employees to work better to provide 5-star customer service. This, in turn, helps in improving the brand image and creates unmatched brand awareness for the company.