One of the prominent hotels brands of the UK, Premier Inn has started its journey into the hospitality industry from the past century with an incredible efficacy and performance, setting up an example of an outstanding marketing strategy.
The following paper traces the various discussions of its trading tactics, its PESTLE, SWOT analysis and Porter’s model and how it has established itself as a leading hotel chain in the highly competitive market with its unique marketing policies and objectives.
In general, we can consider the fact that Premier Inn has acquired the most appropriate strategies and techniques to amplify its growth and development in a significant way. By adhering to the SMART objectives, this company has also expanded its reach to the Asian, European and Middle Eastern countries, though this might be just the beginning of its global representation.
Premier Inn is one of the leading hotel chains having established in Britain and the largest hotel brand in the UK. This prestigious company was founded by Samuel Whitbread in the year of 1987 with the name Travel Inn. In 2004, Whitbread bought the ownership of Premier Lodge and the current establishment is the result of merging the prior with Travel Inn which, at first, was named as Premier Travel Inn.
This reputed hotel brand is the one of the prime brands of Whitbread PLC that was started as a brewery but in course of time expanded into diverse industries including pubs, wines, spirits etc.
Stage – 1
- Situational Analysis
PESTLE- Political, Economic, Social, Technological, Legal and Environmental- is a framework used by marketers to inspect and monitor certain macro-environmental components that can have effective impacts on an organization, mainly threats and deficiencies.
● Efficient collaboration between the UK government and hospitality industry (Okumus et al. 2019).
● Founding of a regional growth fund for the hospitality industry.
With the current positive and productive intervention of the UK government regarding hospitality industrial policies and the increase of funds, Premier Inn has been encouraged to expand their territory to a great extent.
● The current economic recession.
● Growth in the economy of UK hotel market
The recent economic recession has proved to be a major force behind Premier Inn’s innovative venture into this industry. The success of the hotel industry over the last 15 years has encouraged this company as well to work in a better way for a profitable future, as it has seen the growth by 38% of the total £11.2b of UK hotel market (Kandampully et al. 2018).
● Low cost but high standard products.
● Easy accessibility with variable options.
As people nowadays are inclined towards quality but economical products, Premier Inn has dedicated itself to customer satisfaction and choices keeping their priority on check (Lin and Ottenbacher, 2020). A variety of options of rooms and services with easy online or offline methods, this hotel brand is going with the demands of their customers in an appreciable way.
● Centralised management system
● Online marketing and promotions (Bowie et al. 2016)
The use of latest technology in order to run an untroubled management structure has enabled Premier Inn to be one of the foremost hotel brands in the UK. With the help of modern IT services, this company has been operating its marketing strategies in an effective way, reaching out to every part of this country.
● An increase in the minimum wage rate
● Healthy, responsible contracts with the suppliers and business partners.
As it has been increased by 15.5%, Premier Inn is facing some challenges as production cost has also been elevated (Cabral and Jabbour, 2019). In order to deal with this challenge, this given company has made mutual contracts with its suppliers and dealers in a unique way.
● Implementation of Corporate Social Responsibility
● Positivity towards environmentalist approach
Keeping customers’ preference and diligence in check, Premier Inn has adopted environment-friendly approaches to meet their concerns. The company has taken some steps to lower the carbon emission, water consumption and waste material as their corporate responsibility.
The SWOT- Strengths, Weaknesses, Opportunities, and Threats- analysis is discussed below
● Largest and leading hotel brand in the UK
● High quality services with customer satisfaction
This business company currently holds the top position in the UK hotel market with its excellent service and customer review.
● Restricted global presence as it is prevalent only in the UK
● Serious issues with hygiene as allegedly reported by media
The hospitality market is growing fast all over the world and it is facing some complaints in this highly competitive industry.
● To be the chief hotel chain in a global context
● Collaborations with other companies to expand its territory
This organization possesses the power of establishing itself globally by performing exceptionally well in this market.
● The uprising of other competitive budget hotels
● Legal threats from the Trade Union
Due to the presence of other rival brands and its inability to take proper legal actions may result in some serious threats.
- Porter’s 5 forces –
Porter’s 5 forces of Premier Inn are –
- Threat of new possible entrants –
As the hospitality industry is expanding rapidly, there is this massive threat of the entry of an adversary (García-Lillo et al. 2016).
- Threat of substitutes –
Due to poor performance, this hotel chain may get replaced by another potent company.
- Bargaining power of buyers –
Strict bargaining methods may have to be followed up with the buyers to resist this threat.
- Bargaining power of suppliers –
The whole organization depends upon the supplies so measurements need to be taken to bargain for a good deal with the suppliers.
- Potency of the adversaries –
As suggested by Litvin et al. (2018), it’s not that difficult to find an alternative to this budget hotel as the market is highly competitive and resourceful.
- STP and Target Audience
STP – Segmentation, Targeting, and Positioning- is a strategic approach in the marketing industry next to SWOT model. As observed by Chan and Hsu (2016),
this model is useful in planning marketing communication plans of propositioning, developing and executing personalized messages to target a specific group of audience. It is a basic forum in marketing success as without it, businesses are bound to fail having a very generic strategy in the marketing industry.
To keep up with this reputation and efficiency, minute understanding and close interaction demand to be inspected among its clustering customers. This organization has invented a design of a pragmatic Customer Segmentation to understand, handle and interact with the customers by segment (Altin et al. 2018).
By collecting all the data -online and offline- they come up with two distinct types of customers- business stayers and leisure stayers. And according to their preferences and stipulations, the given company follows up with its efficacy and success.
Target Audience –Though tagged as a ‘budget’ hotel, Premier Inns aren’t promoted as such. But compared with luxury hotels, the price is still low. Despite this fact, room rents are still higher than other budget competitors. As observed by Sampson (2018), it mainly targets the upper middle class people, if not the typical middle class one.
This has been reached to the audience through TV advertisements, newspapers and social media. Although recently, it has been targeting to promote itself as the low cost hotel chain as a weekend getaway or leisure break. It also distinctively targets the business steers as they have been proven to be more profitable than the prior.
Setting objectives of a business plan is a part of the marketing strategy as it shapes the future goals of the company down to the path of success. The objectives of Premier Inn are as follows –
- Specific (Global expansion) –
Having profoundly established throughout the country (still with the target of adding more rooms), Premier Inn has been targeting the international market as it has already set up a few hotels in Dubai, China and India (Lugosi and Jameson, 2017).
The company is well reputed in the UK and its growing rapidly for its efficiency and premium services. It has South Asia, Europe and the Middle East as its topmost target markets.
- Measurable (Increment of the number of bookings) –
As the primary goal in the UK, Premier Inn has set up its target of gradually increasing its booking rate up to 38% and adding 75000 more rooms (Lugosi, 2019). Through advertising and promoting on various platforms, it has selected a specific group of clients and places to reach out.
In order to reach overseas, it needs to get enough capital and profit and a homeground is the best option for that as it has already strengthened its roots.
- Achievable (Technological advancements) –
Because of a great many number of hotels all over the country, it is a pretty challenging task for a company to build and maintain a structured design of data analysis and introspection. Premier Inn has taken the pledge to create an extensible digital forum and embed data intuition throughout all the platforms and devices.
Apart from these internal configurations, a scalable booking website or mobile app for easy and effortless booking is also in the list of pending achievements for this company.
- Relevant (High customer service) –
The most important thing in the hospitality industry is the high level of customer service. Premier Inn has been trying to make the hotels to be places the employees feel good to work in. Above that, all the employees have been and are to be well-trained to provide the best service to the customers.
As commented by Madera et al. (2017), in the marketing industry, customer reviews hold the highest significance and this company is targeting to achieve that goal to the fullest in near future by up gradation of rooms and up sell of innovative offers, coupons and packages.
- Time-bound –
Within the time period of 10-15 years, Premier Inn has set its target to form itself as the leading hotel brand in central London, as well as in the UK. And with gradual progression, it has almost achieved its goal by constantly working on its various fields and probable scopes and the business has developed exponentially.
- Strategy and Implementation
Premier Inn has been operating on the vision of founding itself as the topmost hotel brand by assigning solid customer involvement and orientation, by providing the customer just what they need. In this regard, this strategic target results in the principles and initiatives which determine the standards and guidelines the company follows.
For execution, they have initiated 100% money back policy if the customers are not satisfied (Gursoy, 2019). The company has hotels in almost all the critical locations and those are highly maintained. Besides, properly trained staff, quality service, low price- an overall decent experience- is the basic rules of this company.
Talking about its present strategy, it is recently planning to expand its rooms up to the number of 75000 and increasing its market share by 48%. These all can be considered as being set to maintain and actualize its strategic actions. To understand its position in the highly competitive market, a detailed analytical figure of strength and weakness with the help of 5M (Men, Money, Material, Market and Machinery) has been performed.
So, in terms of Men, a large number of employees work under this company to ensure a good night’s sleep. Regarding Money, it has got its back by a decent number of creditors. Likewise, when it comes to Machinery, the company uses the help of the latest technology and service.
Besides the present marketing strategy, as observed in the studies of García et al. (2018), Premier Inn is now planning to move its focus from marketing penetration to marketing saturation where it might expand its reach across Europe to work on revenues and profits.
On the other side, it is now thinking to connect to a new segment of people, like it did for the business customers and leisure customers, as discussed above.
Regarding implementation, it is quite apparent that the company has been following a market penetration strategy towards development and growth. The company has been able to expand its market through accessional and expansion in the UK.
So it can be said that these marketing strategies are working right on the spot because of the fact that it is proven to be helpful in the hospitality industry in and around the UK.
Except this, Premier Inn is investing in the upliftment of distribution of products, quality over quantity and nuances like that. Since the motto of the company has been providing the customer what they need, the market penetration strategy has been helpful in reaching out to the customers and promoting its brand name with a successful rate. So the company’s chosen strategic plan has been implemented correctly and usefully.
In order to understand the action and execution taken by Premier Inn for the implementation of its marketing strategy, its present position in the marketing industry has been examined by its parent company that is Whitbread.
According to Litvin et al. (2018), the marketing status of the company is very strong and it is eventually growing in a rapid manner while other brands are facing losses. But on the contrary, Premier Inn has been investing money in quite a large amount on its branding and advertising.
This can be served as the proof that the company is following and implementing the right strategic plan.
Regarding the marketing plans, the company has been following more than one strategy. Although it is apparently evident that the company is inclined towards a specific strategy, that is the market penetration for its growth and development within the UK, the company is also expanding its market presence through accessional and rapid extension within the same region.
So it can be said that Premier Inn has been sticking to the right plan and propaganda that is being resulted in its horizontal market share and active participation in the marketing industry.
In order to examine which marketing strategies are fruitful and most effective, a study has been conducted and it is shown that Premier Inn has been using these strategies in the long run. It can be proven right in many ways.
For example, when growth strategy through accession comes to the topic, Premier Inn has been dealing with intense marketing pressure and competition regarding accessibility and availability of rooms. Therefore the company has proved to be beneficial in increasing its market value through offering various options of rooms and services.
Also, we can observe the effective use of the SMART objectives to highlight the company’s efficacy (Cabral and Jabbour, 2019). Adding more rooms as up to the number of 75000, a clean and aesthetic maintenance of the hotels and the rooms, professionally trained staff, quality over quantity policy and so on and so forth are the ways this company has achieved the peak of its success.
It has been suggested that various companies are trying their best to get the profitable market share and increase their revenue by following the concept of better services at cheap rates.
Very evidently, Premier Inn has been following this principle for a long period of time and it has proved to be immensely beneficial for the company’s growth and development. Customers would definitely prefer to spend their night in a comparatively cheaper hotel where accessibility, price and availability would be impressionable factors. These conditions are very well met by Premier Inn which helps them achieve their financial objectives and goals.
Despite the company’s versatility, it decided to hold its focus on the hospitality industry resulting in being one of the finest award winning hotel brands in the UK, even internationally. Having located in almost every city, regional towns and major areas of every county, Premier Inn rises up as a great competitor to the other hotel brands in the UK.
Situational Analysis refers to a set of methods and principles by which the internal and external factors of a company or business and their impacts on the company’s wellbeing is minutely scrutinized. It is of prime importance as only after examining this, any strategic marketing plan can be planned and executed.
Altin, M., Koseoglu, M.A., Yu, X. and Riasi, A., (2018). Performance measurement and management research in the hospitality and tourism industry. International Journal of Contemporary Hospitality Management.
Bowie, D., Buttle, F., Brookes, M. and Mariussen, A., (2016). Hospitality marketing. Taylor & Francis.
Cabral, C. and Jabbour, C.J.C., (2019). Understanding the human side of green hospitality management. International Journal of Hospitality Management, p.102389.
Chan, E.S. and Hsu, C.H., (2016). Environmental management research in hospitality. International Journal of Contemporary Hospitality Management.
García Lillo, F., Claver-Cortes, E., Úbeda García, M., Marco-Lajara, B. and Zaragoza Sáez, P.D.C., (2018). Mapping the “intellectual structure” of research on human resources in the “tourism and hospitality management scientific domain”: Reviewing the field and shedding light on future directions.
García-Lillo, F., Úbeda-García, M. and Marco-Lajara, B., (2016). The intellectual structure of research in hospitality management: A literature review using bibliometric methods of the journal International Journal of Hospitality Management. International Journal of Hospitality Management, 52, pp.121-130.
Gursoy, D., (2019). A critical review of determinants of information search behavior and utilization of online reviews in decision making process (invited paper for ‘luminaries’ special issue of International Journal of Hospitality Management). International Journal of Hospitality Management, 76, pp.53-60.
Kandampully, J., Zhang, T.C. and Jaakkola, E., (2018). Customer experience management in hospitality. International Journal of Contemporary Hospitality Management.
Lin, N. and Ottenbacher, M., (2020). Past and present streams in international hospitality research.
Litvin, S.W., Goldsmith, R.E. and Pan, B., (2018). A retrospective view of electronic word-of-mouth in hospitality and tourism management. International Journal of Contemporary Hospitality Management.
Lugosi, P. and Jameson, S., (2017). Challenges in hospitality management education: Perspectives from the United Kingdom. Journal of Hospitality and Tourism Management, 31, pp.163-172.
Lugosi, P., (2019). Deviance, deviant behaviour and hospitality management: Sources, forms and drivers. Tourism Management, 74, pp.81-98.
Madera, J.M., Dawson, M., Guchait, P. and Belarmino, A.M., (2017). Strategic human resources management research in hospitality and tourism. International Journal of Contemporary Hospitality Management.
Okumus, F., Altinay, L., Chathoth, P. and Koseoglu, M.A., (2019). Strategic management for hospitality and tourism. Routledge.
Sampson, E., (2018). Hospitality Management: An Introduction. Scientific e-Resources.