Title page

1. Executive summary…………………………………………..…………………..…..2

2. Introduction …….….…..……...………....…………………………………………..3

3. External market analysis(PESTLE analysis)………………………………...……....4

4. Political and legal…………………………………………………………………….4

5. Environmental………………………………………………………………………..4

6. Technological developments………………………………………………………...5

7. Socio-cultural issues………………………………………………………………....5

8. Economic factors…………………………………………………………………….5

9. Internal market SWOT analysis……………………………………………………...6

10. Strength………………………………………………………………………………6

11. Weakness…………………………………………………………………………….6

12. Opportunities………………………………………………………………………...7

13. Threats……………………………………………………………………………….7

14. Different techniques that can be used in case of Cavendish as a hotel……………...8

15. Menu engineering using Boston matrix……………………………………………..9

16. Using questionnaire as a marketing tool………………………………………….....9

17. Relationship between questionnaire and relationship marketing…………………. 10

18. Ansoff’s matrix- Recommendations on the current situation……………………....11

19. Conclusion ………………………………………………………………………….13

20. Bibliography………………………………………………………………………...14

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Executive summary

The marketing tools that have been analysed lead to a division into macro and micro
environment of the Cavendish hotel. This division is based on the application of these tools on
the organisation as a whole and departmental wise as well. In the following work three
different marketing tools have been used and then Ansoff’s matrix is used to determine the
marketing strategies that the organisation needs to adapt. The marketing tool comes a
conclusion that the organisation must take the opportunity of the current market situation and
expands in order to gain profit during the Olympic and Paralympics events that the city ids
going to host in 2012. The well reputed website www.tutor2u.net helps provide the hint when
the matrix is applied on a macro and micro level. The results range from acquisition of
suppliers to developing the banquet rooms to a full fledged business centre with a help from
the assistant. The PESTLE analysis helps gain a macro level viewpoint and must help owners
understand the current issues. Relationship marketing and questionnaire gives the market
analysis if organisation as a whole has been put through the scanning process. The relationship
between the both has been established thus giving organisation an advantage over the use of
both the tools. Boston matrix on the other hand is quite effective if applied on a micro level or
departmental level. It has been used to perform a menu engineering of the restaurant. This
gives advantage to design the seasonal menu for next time close to the Olympic and post
Olympic ceremonies like Paralympics. The possible use of Boston matrix can be in the front
office department to analyse room packages provided to the guest. But in the following work it
stands as a separate entity. But a wide emphasis has been provided to questionnaire that is
guest satisfaction survey. It has been redesigned with some modifications to help Cavendish
stand-up in the market in the following events as well as to perform more effectively in the
present situation. The modification has also been done to establish link between relationship
marketing and questionnaire and hence effective use to both the tools in symbiosis.

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Introduction

Cavendish London hotel is an independent organisation owned by Barclay brothers. Though

The owners also own Ritz hotel at Green park London the sales and marketing department is
situated in Cavendish itself. There is an advantage of the given situation that the management
which runs the hotel also gets to know what the market demands are. On the other hand the
marketing department is also poses a disadvantage of developing an organisational sickness
which is a phenomenon when the management doesn’t have the opportunity to visit the other
organisation. Thus a wider view into the market is not possible at all the time. Thus upgrading
its own marketing tool is the only process through which Cavendish might know its market,
analyse it, know its demand and develop its existing strategy to meet its requirements.
The tools that Cavendish uses are the same and some level of up gradation has been made
comparing the same tools used by its main competitor Le Meridian Piccadilly. Cavendish and
its competitor both target the same market use and thus to complement uses same marketing
tool to study their market. The external factors play a very important role with comparison to
internal factors. Thus the comparison and the marketing tools might give a broader look to
what Cavendish must imply to be different form Le Meridian and thus give a competitive
advantage in present market. This might also as well apply for the future giant market of the
Olympic and the Paralympics games that will take place in the city. Thus giving Cavendish to
only chance to stand up in the market and make a permanent impression for the time to come

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EXTERNAL MARKET ANALYSIS

PESTLE analysis
Political and legal
The political and legislative factors play an important role in development and existence of
Cavendish as an organisation.As Cavendish makes a yearly profit of 2.5 million so as per the
taxation policy for companies earning more than 1.5 million is 28 percent. This heavy taxation
prevents Cavendish to reinvest the profit margin back into the hotel but a healthy reinvestment
exists.
Value added tax Cavendish has to change its customer is 17.5% on most products provided and
services. This goes with 12.5 % service charges on to the bill thus preventing it to be flexible
on the price issues.
The other political factors are pressure of being an environmental friendly hotel.
Cavendish has achieved award for being most considerate hotelier of the year 2008.
But Cavendish has to achieve other international standards like ISO 14001 to target
international market legally as an environmental friendly in near future. Cavendish also has to
deal regularly with the local bodies like council in order to meet requirements and probably to
know the new regulations with regards to its existence.
Treaty of European community enacted in 1957 has Regulation 139/2004/EC allows
Cavendish to operate with limited competition as it doesn’t allow merger of large market share
holders. Thus healthy competition exists in central London in 4 star hotel market.
No smoking policy introduced in 2008 has been instrumental in being environmental friendly
in other ways. Cavendish is a non-smoking hotel and has been displayed on its homepage.

Environmental
The issue of complying with the surrounding as well as to be productive at same time is the
one of the main objective of Cavendish London hotel. As then done by some of the hotels in
Asian and Arab countries Cavendish doesn’t have any surrounding it can care take of. But the
other strategy they have adopted is to strive for ISO 14001. This gives a competitive edge over
the other organisation when it tries to advertise itself internationally. This gives them
advantage when attracting ethically sound clientele which is generally in considerable group.
This also includes sports personalities and related organisations those are enough to encourage
ethically conscious organisations. This is definitely a major boost during the 2012 Olympics
that are going to be held in the city. Another good strategy adopted is to encourage guest to
save water. This is done by many ways one of them is to make them use one towel twice.
Water also is a major saving in the costs hence a boost for the organisation.
Restoration and rebuilding St. James church by Jermyn Street is the strategy adopted by
Cavendish and it aims to raise 4 million in next two years. This not only build good public
relations but help ignore some problem possessed by organisations own existence to its
neighbourhood.

4
Technological developments

Information technology development had a profound effect and helped hospitality industry
grow from virtual incapability of data handling to a self sufficient industry. Market research
has depended heavily on these development for instance as per hotel bench mark survey
conducted by deliotte.co.uk it compares the performance of all the hospitality outlets in all
possible UK cities. This was virtually impossible to collect such huge amount of data with such
reliability 20 years ago.
Automatic check in systems that are thought as the most recent development but rather dates
back to 1995 when Hyatt group adopted in 11 of their outlets. But this of not that use to
Cavendish if it aims for Olympics or Paralympics 2012.
Instead of offering minimum requirements many provisions must be provided in wake of 2012
Paralympics in London as it also makes commercial sense.
Justin Lunniss (2007) ‘Services for disability leave much room for improvement’, Caterer and
hotel keeper, December6-12, p18
The profitability chance varies from gaining a contract for athletes stay and other fans during
the games. Palm top micros operation in all food and beverage outlet help increase service
speed and thus facilitates speed check out in some existing organisations. Online registrations
have virtually deleted the middle man that is travel agents, reservation companies who add up
price to hotels offering. In wake of current credit crunch people look value for their money
instead it’s not about vanity these days.

Socio-cultural issues

Community needs religious support and tolerance is depicted as Cavendish aims at restoration
at st. James church and raising 4 million pounds in next two years. On commercial aspect it is
friendly dining place for celebrations and dining.
Introduction of kosher meat to attract Jews and Muslims must be a major step to gain public
support and increase clientele.
Interaction with Arab, African and Asian customers in marketing department is very important
with keeping in mind the athletes they produce for the Olympics.

Economic factors

In wake of current credit crunch where all the money has been transformed into assets the
clientele who deals in assets business like real estate are of major importance.
“The very existing change in trend is that people are changing their preference from 5 star
deluxe to 4 star giving a very strong message that they are not looking for luxuries but the
basic need during their stay in a hotel.”
Gareth Banner (2007), Shine Training, Cavendish London on 3rd December 2007
People are also seeking more value for their expenditure as implied from the statement.
Inflation rates and interest rates also directly determine the potential of the market. High
inflation rates during Olympics can be used as to skim the market.
Minimum wage act also reduces the profit margin and hence it compels to rethink about
reinvestment plans for the future.

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Internal market SWOT analysis
STRENGTH

Philosophy-
The philosophy of the hotel is to be the best four star hotel in central London with special
people creating special experience. This vision is thus segregated into four core values and then
into 20 different touch points. Thus the operations are revolving around touch points and hence
comply with the vision of the hotel.
Restaurant-
David Britton restaurant has been highlight for past few years for the hotel.
It achieved AA rosette award and hence helped boost its revenue.
Rooms Packages-
There has been a considerable change in the marketing strategy for selling room nights. The
effective one is expedia.co.uk and current four packages on the website
That are mid week early bird £199 per room, London weekend breaks £79 per person,
Christmas package £69 per person, festive Christmas weekend £79 and romantic breaks £133
per person.
Average room rate was £137 exceeding its budget rate by 4 pounds.
Silent competition:
As reviews on tripadvisor.com the clientele admits it to be a competitor to Le Meridian
Piccadilly but the silent approach by Cavendish has led to a disguise of no competitive threat.
Reservation links with the restaurant booking.

WEAKNESS
Sales of conference banquets is quite low by 32 % as compared to other outlets
Small rooms-
As per reviews on tripadvisor.com confirm the fact that the sizes of rooms are quite small.
Not investing in people-
Opportunities are not provided to people to review the hotel as they get experienced into
operation.

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OPPORTUNITIES
Olympics

As the Olympic Games are to be held in the city in 2012 sales department must attract sport
council across the world by effective marketing. The special provision for people with
disability may prove crucial for the following event that is Paralympics 2012.

Carnivals

Management must attract people visiting local carnivals and functions like marathon event,
Nelson Mandela event in Hyde Park. It should come with some creativity like Nelson Mandela
cocktail for instance.
Strengthen ties with Fortnum and mason could boost its image and perception of hotel. The
most capital demanding would be to build a pass under the road to let people dine in Fortnum
and hence helps advertise Cavendish to new potential clientele.

Chef celebrity

Media people should be brought to highlight the precision at which its kitchen works.
Hells kitchen would be a good exercise to know the hidden potentials of the chefs working
there.

THREATS

Advertising as the local leader would lead to phenomenon of waking up its competitors.
Whereas the possibility is that Cavendish would still need time to capture market. This can
become evident by start of price war not only on rooms but food and beverage outlets as well.
Considering the external and internal analysis staff may not be meeting criteria for the required
competence for example food knowledge.

7
DIFFERENT TECHNIQUES THAT CAN BE USED IN CASE OF CAVENDISH AS A
HOTEL

The techniques that can be applied as analysing the external and internal environment
are questionnaire and relationship marketing for the service standards. Service as an intangible
product can only be defined by guests who experience it at the Cavendish London.
Questionnaire like a Guest satisfaction survey helps service to be rated as per the guest criteria
and relationship marketing helps Cavendish know how many loyal customers it can bank upon.
Questionnaire pose an additional benefit that it can mark the product quality as well based on
ratings the organisation wants to on an average taking into account all the customer who have
visited the organisation for example 93% of customer felt that check in service was up to the
mark. The other face of this strategy is to appoint an external person who on the behalf of the
management will carry on an organisational audit.

Relationship marketing on other hand deals with more personalised basis which involves data
creation, guest history profiles which include guest’s likes and dislikes.
It generally deals with customer retention rather than attracting new customers. It is a long
term strategy which aims at building relationship with the customers. It also involves designing
Regular contacts are made with customer and there is a sense of trust. Loyal customers are
given more preference as indicated by star wood group who have star points for regular and
loyal customers is an example of relationship marketing. There is direct relationship between
customer retention and profitability.
When you apply Pareto 80/20 effect which evolves into such form in the hospitality scenario

For 80% of the tactics attract 20% of customers

Then 20% of tactics attract 80% of the customers
The 20 % of tactics form major bulk of relationship marketing tactics
Hence both these techniques are useful to analyse market share and its perception of Cavendish
as an organisation.

But the tool the management can use to verify the effectiveness of internal strategies and
product is Boston matrix.
For example menu engineering where menu dishes are rated on two factors. These factors then
represent the two axes of demand in the outlet and pricing in the outlet.

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Menu engineering using Boston matrix

The dishes with low demand and price are dogs; the dishes with high demand and high price
are stars, dishes with low demand and high price are the problem child and finally the high
demand and low price are the plough horses or the cows.
The management for kitchen takes the decision to bring cows and problem child into star
category and eradicate the dogs.

Plough horses

Star

Problem
Dogs
child

Tricks of the trade

Increase the price of the cow
Start promoting the problem child
Pay special attention as star as it brings huge revenue for the business

USING QUESTIONNAIRE AS A MARKETING TOOL

The marketing strategy adopted by Cavendish to analyse itself is questionnaire. It helps them
tangibly rate their performance by two dimension guest satisfaction survey and mystery guest.
A sample questionnaire has been developed using the guest satisfaction survey of Cavendish
and its main competitor Le Meridian Piccadilly. Though Le Meridian is a 5 star judging criteria
are four star market hence GSS scorecard is designed for an ideal 4 star hotel.

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The GSS modified score card is attached at the end of this
assignment.
Combined version of Le Meridian hotel and Cavendish
hotel and marked as per the reviews on tripadvisor.com

Relationship between Questionnaire and Relationship

Marketing

It is the application of 90/30 rule.

Multiply 0.9 with the people who are definitely going to comeback
Multiply 0.3 who are probably going to come to Cavendish
Add the two entities and the sum is the number of people who are going to came back to
Cavendish.
Thus questionnaire also indicated to what level relationship marketing is effective.

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RECOMMENDATIONS ON THE CURRENT SITUATION

Detailed view on the macro and micro environment in which Cavendish London hotel exists and carries out various business transactions; calls
for the further development of various strategies already employed by the hotel. It also helps to view the current position of the organisation
considering the services and product it offers with respect to its market situation.
Here in the analysis we consider the product and services offered to the customer as a package since the hospitality industry serves both the
product and service.

ANSOFF’S MATRIX
EXISTING PACKAGES NEW PACKAGES
EXISTING Market penetration Package development
MARKET

1. Increase the services offering the same product at
the same price.
2. Offering current packages to existing customers
through intense marketing.
3. Gain the customers of the competitors by
acknowledging the market they serve.
4. Serving other than the niche marketing.
5. Convincing the current clients to use more services
and products.
6. Attracting the potential customers (nonuser of the
packages)
1. Introducing new products in the various outlets
2. Introduce special of the day in the restaurants for all the meal
courses
3. New promotions to deal with the new package introduction as
well as sale.
4. Develop new packages which have a growing demand in the
customer group referring to current situation of global
recession.
5. Analyse the current resources and determine the usefulness to
the future introductions.
6. Allow the present market to use the new packages at
reasonable price or in some case reduced price in order to gain
the present market share. This should not be confused with
promotion as the phenomenon helps reduce the risk attached
with package developments.
7. The room packages must include different plan in order to
encourage business in food and beverage outlet which counts
for 32% of the revenue.
8. Business conference rooms can be introduced to offer more
services to the existing customers.

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NEW Market development
MARKET
1. Application of yield management with the
marketing techniques.
2. Attracting the booming international markets like
Asian market to gain the corporate clients.
3. Advertising its lobby bar to the local public.
4. The restaurant must be relocated in order to attract
the office going public.
5. Change it image from corporate seeking client to
more family friendly image.
6. The recent introduction of halal menu can attract
the local ethnic population.
7. Purchasing space in the hospitality trade
magazines like The Observer can give opening for
the new market conscious clients.
8. Its environmental friendly image must be used to
advertise the ethically conscious customers.
9. The concierge services must be made accessible
for non-residents in order to book taxis, theatre
tickets etc. at a reasonable cost
Diversification
1. Horizontal diversification might include buying up the travel
agents and the other middle agents. This might help in order to
gain economies of scale and hence reduce the room prices.
2. Acquisition of British restaurants in other small hotels or with
the contract of sharing the same menu for the month could
boost up the profit and revenue.
3. Merging up with a local nearby gym with an Olympic pool to
satisfy the new customers and the potential athletic customers
during Olympic 2012 games to be hosted in the city
4. Vertical diversification might include the acquisition of the
food or wine supplier in order to reduce the current prices.
5. Cavendish can merge in an association with the local bank to
introduce the corporate account in order to have an efficient
control of debtors, creditors and corporate clients.
6. Conglomerate diversification of the hotel is already in place
but with independent brands owned by Barclay brothers.

The analysis of the present market situation calls for a versatile marketing strategy which has room for each possible development of the
organisation. There is less scope for the market diversification looking at the global recession of the year 2008 but the acquisition might be a
golden opportunity as the estate prices are low.
And Haart estate agents figures show property prices in London have fallen by as much as 14% during 2008.
'The fall in prices show that there can be no doubt that even property in prime Central London has been hit by the double whammy of the credit
crunch and wider concerns over the global economy,' said a spokesman at Knight Frank.
http://www.propertywire.com/news/europe/london-property-downturn-200807111297.html (11th July 2008)

Thus the global recession provides an opportunity to organisation to for an expansion and might prosper during much promising Olympic and
Paralympics 2008 in London city.

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Conclusion

Cavendish as an independent organisation does marketing analysis effectively and the tools
used by it are relationship marketing and questionnaire. Both are used on large scale to
determine market demands expected from Cavendish as an organisation. Boston matrix is quite
effective for food product analysis of food and beverage outlets. Guest satisfaction survey acts
as a questionnaire tool whereas guest history data collection and usage is the form of
relationship marketing. Relationship between the marketing tools have been established in the
assignments and necessary recommendation for Cavendish London hotel is the modified and
newly formatted guest satisfaction survey on which emphasis has been made.
Thus usage of new marketing tool must possibly lead to better market research and provides
concrete criteria to meet its demand. Cavendish must then comply by changing required policy.
On the second thought marketing tools have been related together and upgraded to a certain
degree so that Cavendish may meet the newly expected market demands.
The Ansoff’s matrix helps to put in action the required marketing strategies which in case is all
the four division of the tool. It also gives us an insight into the risk attached with the onset of
global recession on the current business opportunity but also directs in the way that the
organisation might become a leader in the 4 star category and thus fulfil its vision of becoming
‘The best four star hotel in central London with special people creating special
experience’

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References and Bibliography

Caterer and hotel keepers 6-12 December 2007

Neil Wearne and Kevin Baker (2002), Hospitality marketing in the e commerce age, Pearson
education Australia.

Kevin baker and Jeremy Huyton (2001), Hospitality Management, Hospitality press,
Melbourne.

www.deliotte.co.uk (18th October 2008)

www.propertywire.com (11th July2008)

http://www.businesslink.gov.uk/bdotg/action/detail?type=RESOURCES&itemId=1075433676

Gareth Banner (2007), Shine Training, Cavendish London on 3rd December 2007

Ciaran Fahy (2008), Staff monthly meeting, Cavendish London on 21st September 2008.

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