International Marketing

Final Report
Group 4

Submitted to : Submitted by: Group 4

Dr. D.K. Batra Arjun Narang 17PGDM140
Dr.Pinaki Das Gupta Deepansh Singhal 17PGDM145
Divyanshu Gandhi 17PGDM147
Tanmay Parikh 17PGDM179
Anurag Ajay Gupta 17PGDM137
Aman Sharma 17PGDM002
 Table of Contents

Category Snapshot ........................................................................................................................................ 3

World Tourism Industry ................................................................................................................................ 3
India Tourism industry .................................................................................................................................. 4
About the Company ...................................................................................................................................... 5
Objectives ..................................................................................................................................................... 5
Rationale for Selecting the Company ........................................................................................................... 7
Competitive Analysis ..................................................................................................................................... 8
Zone Selection............................................................................................................................................... 9
Factors for market selection ....................................................................................................................... 14
Globalization Index............................................................................................................................... 17
Political Stability and economic freedom from trade prospect ........................................................ 18
Political stability - country data from around the world: ........................................................................... 21
Cultural dimensions .................................................................................................................................... 23
Tariffs/Tax Rates/Ease of Imports............................................................................................................... 24
Ease of Doing Business................................................................................................................................ 25
BERI RANKINGS ........................................................................................................................................... 27
Conclusion ................................................................................................................................................... 27
RATIONALE BEHIND SELCTING COUNTRIES IN CATEGORY A ...................................................................... 29
Marketing Mix ............................................................................................................................................. 31
Product ................................................................................................................................................... 31
Price........................................................................................................................................................ 32
Place ....................................................................................................................................................... 32
People ..................................................................................................................................................... 32
Physical Evidence .................................................................................................................................. 33
Process.................................................................................................................................................... 33
References .................................................................................................................................................. 36
Appendix ..................................................................................................................................................... 37
Category Snapshot

The term Hospitality refers to the cordial and generous reception and entertainment of the guests
or strangers either socially or commercially. Considering the heritage and culture of India that have
caused a massive influx of tourists from all around the world. With increasing tourism there have
been a great increase in demand of accommodation.
Hospitality as an industry can be bifurcated into lodging and restaurants, events, theme parks,
transportation, cruise lines etc.

World Tourism Industry

 Direct, Indirect & induced contribution of the "Tourism" segment amounts to US$7.6 Trillion
in 2016 which increased to 8.27 trillion in 2017.
 The direct economic impact including accommodation, tourism, entertainment and attraction
amounted to US$ 2.3 Trillion where US$ 550 Billion were generated by the hotel industry.
 USA and France are considered to be the popular tourist destinations but with time new and
improved places are coming into picture to reap the benefits of this industry.
 The decadal growth of tourists has been over 125% from 528 million in 2005 to 1.19 billion
people in 2015 and the forecasted figures is to exceed to 1.8 billion by 2030.
 Europe receives the most number of international tourists but it also produces the most number
of travelers i.e. 607 million which was double to that of the Asia Pacific region.
 But it is not always about the sheer numbers as China has the largest tourist expenditure
followed by USA and then Germany.
 The leading city in international tourism expenditure was Dubai where around 31.3 Billion
US$ were spend in 2016 followed by London, New York and Bangkok.
 The Global Hotel Industry has a retail value of 495.17 Billion US$.
India Tourism industry
 India is a large market for tourism & travel. It offers diverse portfolio of niche tourism products
like cruises, adventure, wellness, sport, spiritual, medical, religious etc
 Contribution of travel & tourism to Indian GDP has been Rs.15.23 trillion ($ 234 billion) in
2017 and is forecasted to grow to $492 Billion by 2028.
 As of 2017-18 81.1 million people are employed in Indian tourism industry which accounts
for 12.38 % of the total population.
 In Hotels 100% FDI is allowed through the automatic route.
 Also a five year tax holiday is offered to for 2,3 & 4 star hotels located around UNESCO World
Heritage sites (except Delhi& Mumbai).
 India has received around US $11.39 Billion between April 2000 and June 2018.
 India has started another category of medical tourism which is known as M-Visa, to encourage
medical tourism in our country.
 India is working to achieve 1 percent share in world’s international tourist arrivals by 2020 and
2 percent share by 2025.
 FEE (Foreign Exchange Earnings) has increased by 7.23% CAGR from 2006-17
 The revenue for hotels increased from US $382 million to US $410 million
 Some of the major players in hospitality industry are
About the Company
Launched in 1975, ITC Hotels, India's premier chain of luxury hotels, has become synonymous
with Indian hospitality. ITC Hotels pioneered the concept of 'Responsible Luxury' in the hospitality
industry, drawing on the strengths of ITC groups' exemplary sustainability practices. Responsible
Luxury personifies an ethos that integrates world-class green practices with contemporary design
elements to deliver the best of luxury in the greenest possible manner.

The Responsible Luxury commitment of ITC Hotels blends elements of nature to deliver a unique
value proposition to guests, conscious of their responsibility to be planet positive. Today, these
unique interventions have made ITC Hotels a trailblazer in green hoteliering with all its premium
luxury hotels LEED (Leadership in Energy and Environmental Design) Platinum certified.

ITC hotels have classified their hotels into 4 different brands which include-
1) ITC hotels have 12 of its hotels in luxury collection which include TC Grand Bharat in
Gurugram. ITC Grand Chola in Chennai, ITC Maurya in Delhi, ITC Maratha in Mumbai,
ITC Sonar in Kolkata, ITC Grand Central in Mumbai, ITC Windsor & ITC Gardenia in
Bengaluru, ITC Kakatiya in Hyderabad and ITC Mughal in Agra, ITC Rajputana in
Jaipur and recently launched ITC Kohenur in Hyderabad and ITC Grand Goa Resort and
Spa in Goa.
2) WelcomHotels is another offering which has 12 properties under it like WelcomHotel
Dwarka - New Delhi, WelcomHotel Bella Vista - Panchkula-Chandigarh, WelcomHotel
Jodhpur - Jodhpur, WelcomHotel Rama International - Aurangabad, WelcomHotel
Vadodara - Vadodara, WelcomHotel Grand Bay - Vishakhapatnam, WelcomHotel
Khimsar Fort & Dunes - Rajasthan, WelcomHotel The Savoy - Mussoorie, WelcomHotel
Kences Palm Beach - Mamallapuram-Chennai, WelcomHotel Coimbatore, WelcomHotel
Bengaluru, WelcomHotel Chennai, WelcomHotel Pine N Peak and one Sheraton New
Delhi Hotel which offers to the business and leisure travelers.
3) Fortune Hotels operates mid-market to upscale properties in the first-class, full-service
business hotel segment all over India, in major metros, mini metros, state capitals and
business towns, promising business and leisure travellers a wide choice of destinations
and accommodation.
4) WelcomHeritage brings together a chain of palaces, forts, havelis and resorts that offer a
unique experience. WelcomHeritage endeavours to preserve ancient royal homes and the
historical Indian grandeur and opulence for the future Indian generations.
WelcomHeritage provides a fine range of hotel services inside these architectural legacies
present across India.

Objectives

 To analyze the future course of the brand ‘ITC Hotels’

 To conduct a competitive analysis of the possible competitors of the company in the foreign
 market as decided by the analysis
 To prepare a market selection and entry strategy for the brand ‘ITC Hotels’
Rationale for Selecting the Company

The most important reason why we selected ITC hotels is its value proposition which it uses to
make different types of hotels targeting different type of consumers. It is not considered the market
leader in hotel segments which makes the proposition of going global important for its survival.
As quoted by their CEO Mr Dipak Haksar their international venture is driven by opportunity, they
first expanded their overseas presence in 2017 by starting constructing their property in Colombo,
Sri Lanka named as ITC One Colombo1. It is their first international venture which would have
hotel rooms, luxury residencies, retail and office spaces.
Currently ITC hotels have 9000 rooms under them which are operating under different brand
names. With the economic growth in India the consumers in India are opening to a lot of foreign
travels which ITC can leverage as their brand is synonymous with the Indian consumers.
So to conclude we will be analyzing the best country for ITC where it can venture and open its
new properties based on a number of political, social, legal, economic and environmental
indicators.
Competitive Analysis

 By market size, the top ten countries for the overall hospitality industry are the US (about
$244 Billion, according to approximations from various sources), Spain ($60 billion), United
Kingdom ($55.5 billion), Thailand ($53.4 billion), Germany ($52.12 billion), France ($50
billion), China ($44.4 billion), Italy ($43.2 billion), Hong Kong ($37.9 billion), and Australia
($34.4 billion).
 From the above figures India is a lucrative market which growing in the Asian segment in
terms of tourism and hospitality but for a company like ITC hotel to grow it needs to leverage
the foreign markets by creating a presence in the above countries.

 The top global hotel companies are Intercontinental Hotel group (4800 hotels), Hilton
worldwide (4278 hotels), Mariott International (4424 hotels).

 With technology being leveraged by all the players in the hotel industry to improve their
market share OYO has come into picture which is competing with the whose and who of the
hospitality industry and is expanding internationally by their FOCO (Franchisee owned
company operated) model. They have already ventured into the international markets like
China, Japan, Philippines, Thailand, UAE, Nepal, Indonesia, Malaysia having more than
8500 hotels under them.
Zone Selection

For a company to select an international market where it wants to enter, it is critical that it should
decide which zone it wants to target. Entering into any zone without prior study can lead to serious
repercussions with huge losses for the company. It can really difficult for the company to exit the
market once it has entered without properly strategizing.
In order to study the same, we have taken the help of WITS database to identify the zone i.e. groups
of countries clubbed together. The basic zones that are under study in this section are:
1) Europe and Central Asia
2) Southeast Asia & Pacific
3) Latin America & Caribbean
4) Middle East & North Africa
5) Sub-Saharan Africa
6) North America
The countries included in each region has been added in the exhibit.
Out of these 6 regions, 3 regions are witnessing highest growth in the tourism industry.
The regions are-
1) ASEAN countries
2) Latin America & Caribbean
3) Middle East
Out of these 3 regions, ITC has already stepped foot into the Middle East region by opening its
Fortune Hotel brand in various regions of Dubai. The company plans to establish and extend itself
in the market by collaboration with various hotel chains there.
Subsequently when selecting a region, we need to look at some critical factors which will help us
study the dynamics of the zone, how they are performing and what can be the issues when the
company decides to enter that zone. Some of the factors that we have considered in our study are
mentioned below:
1) Tourism developments in the region
2) Occupancy rates and RevPAR
3) GDP contribution

Now we will look into each factor in detail:

1) Tourist Development in the regions
If we see the global scenario, ASEAN is one of the world’s most tourism dependent regions with
12.4% contribution of total GDP which is nearly 4% above most of the other regions of the world.
The expected growth of tourism in this region is 6.3% per annum for next ten years.
If we compare the international tourist arrivals according to countries, these are the figures for the
year 2000.

Now, the data has changed a lot for 2016 as Asia and Pacific countries have shown immense
growth in the tourism industry.
From 2000 to 2016, Asia and Pacific has grown from 16% to 24%.

2) Occupancy rate and Average RevPAR

If we look at the service we are to provide, it is very important to see what are the current
occupancy rates in the regions to know the attractiveness of the market. If the occupancy
rates are high, this indicates two important points-
1) There is a high demand in the region due to high tourism
2) The number of Hotels in the region is not able to cater to the future demand
We can see that for 2018, Asia Pacific has highest occupancy rate of 72.8%. This gives a
company immense opportunity to enter the market. We can also see from the graph that Asia
Pacific had low occupancy rate in 2015 and in 3 years had risen to highest occupancy rate.

RevPAR
The Revenue per Room in Asia Pacific has increased by 3.5%. Though in most of the regions
RevPR has increased, but they have started becoming stagnant in terms of growth in occupancy.
In Middle East the RevPR has deceased substantially.
1) GDP Contribution
If we can see the below figure, we see that tourism in North East Asian countries have the
highest contribution to the GDP and have significantly grown from 2016-2017. This shows a
very big opportunity to enter into the market early and establish a brand in the growing countries.

Based on the above data, we can conclude that:

 The contribution of International tourist arrivals in Asia and Pacific to the whole world
has been increasing. In 1950, this region contributed 2%of total tourism. In 2000, the
contribution increased to 16% and in 2016, it has risen to 24.52%
  The occupancy rate in 2018 was highest in Asia Pacific
 The revenue per available room has increased in most of the regions but the markets in
those areas are going towards maturity stage which has increased the entry barrier due to
existed and stable players. The RevPAR in Asia Pacific has increased by 3.5% YOY
 In 2016, European Union and North America dominated the travel and tourism sector by
having highest GDP contribution by numbers. If we see the figures in 2017, North East
Asia has become leader in GDP contribution with 20% increase in GDP contribution in a
single year.
Owing to all the above mentioned factors, we have decided that ITC hotels should venture
into ASEAN countries. Though further analysis need to be done to choose which specific
countries we should enter. We will now deep dive into factors to decide the countries to
choose which countries we can enter in this region.

Factors for market selection

GDP Contribution
The unique and diverse range of recreational activities and travel options in ASEAN region has
made Southeast Asia a top choice for tourists. According to the World Tourism and Travel
Council (WTTC), the tourism sector directly contributed to a whopping US$119.7 billion in
2016 alone and is projected to reach US$222.8 billion in 2027, which makes up 5.3% of total
GDP for the region.
Since tourism is one of the main growth-generating sectors for the region, it is important that the
Association of Southeast Asian Nations (ASEAN) remain on the ball when it comes to growing
and developing the sector.
According to the ASEAN Tourism Strategic Plan 2016-2025, the regional bloc has pledged that
“…by 2025, ASEAN will be a quality tourism destination offering a unique, diverse ASEAN
experience, and will be committed to responsible, sustainable, inclusive and balanced tourism
development, so as to contribute significantly to the socioeconomic well-being of ASEAN
people.”
Out of this total contribution, 80% of total revenue from tourism industry is contributed
by 5 major countries- Singapore, Thailand, Vietnam, Malaysia and Indonesia.
If we compare 5 ASEAN countries on basis of GDP contribution of tourism sector, we can see
that Thailand has more than 7% of its GDP contribution from travel and tourism industry while
Vietnam has 5-7% of the contribution. Indonesia, Singapore and Malaysia contribute less than
5% of the contribution.

Competitiveness Index

Travel and tourism competitiveness Index ranks worldwide 136 countries based on their
performances on 14 criteria’s including safety, ICT readiness, international Openness, price
competitiveness and transport infrastructure.
Country Ranking
Singapore 13
Malaysia 26
Thailand 34
Indonesia 42
Vietnam 67
Singapore emerges the most competitiveness among ASEAN countries. Vietnam makes the list
of most improved countries in the industry.

Globalization Index
1) De Jure - Trade and financial globalization capture by the level of restrictions placed on
the movement of goods, services and capital.
2) De facto - Trade and financial openness are measured by the level of export, import and
capital that called de facto measurement.
De jure measurements are not comprehensive and do not accurately reflect the actual degree of
trade or financial openness of an economy into international markets. For example, some of them
measured restriction on foreign exchange transactions that do not necessarily restrict the capital
flows. Furthermore, these measurements do not able to catch the degree of enforcement of
restriction on of goods, services and capital. The main problem of de facto indexes is measuring
globalization indirectly. For example, trade openness -that measured by trade volume as share of
GDP - measured indirectly through trade volumes.

Globalization Index DE FACTO DE JURE

China 72 109
Hong Kong 41 90
Taiwan 208 207
Japan 44 27
Mongolia 84 65
South Korea 35 41
Bangladesh 150 171
Bhutan 160 185
Maldives 126 137
Nepal 158 165
Sri Lanka 101 134
Cambodia 90 118
Indonesia 89 79
Malaysia 10 56
Myanmar 176 180
Philippines 70 85
Singapore 14 44
Thailand 37 101
Vietnam 66 116
Australia 24 33
New Zealand 39 31
International Tourism

We can see that the number of arrivals in Thailand has been growing continuously and after
2009, they have seen a rapid rise. Also, in Vietnam, after 2008, the tourist arrivals have
increased.
We can also see that Malaysia and Singapore has seen a decline in the number of tourist coming
in the country

Political Stability and economic freedom from trade prospect

Southeast Asia in 2018 has been marked by busy political agendas, challenges by ethnic tensions,
religious conflicts, and regional stability marred by external developments, most notably the US
presidential election
Trump has promised to abandon the high profile trade agreement Trans-Pacific Partnership (TPP),
which Brunei, Malaysia, Singapore, and Vietnam are, members of which could reduce trade with
US and increase trade amongst ASEAN countries

Indonesia- The government’s efforts to improve Indonesia’s business environment and attract
foreign direct investment by upgrading power and other infrastructure, prosecuting corruption
cases more aggressively, and taking other steps to improve the regulatory environment are aimed
at sustaining economic development and diversification. Remaining constraints include an
inflexible labor market, long-standing protectionist rules governing trade and foreign investment
in extractive sectors, and subsidies to numerous state-owned enterprises.

Malaysia- The trade regime is relatively open. There is no mandated minimum wage, and labor
regulations are not rigid. The judicial system’s vulnerability to political influence is a significant
challenge to the rule of law. Government priorities in 2019 include consolidating high public debt
and attracting additional investments in the production of high-technology and knowledge-based
goods and services that have made Malaysia an upper-middle-income country. To enhance
competitiveness, the government plans further liberalization of some services subsectors, tax
reform, and subsidy reductions.
Singapore- Singapore owes its success as a highly developed free-market economy in large part
to its remarkably open and corruption-free business environment, prudent monetary and fiscal
policies, and a transparent legal framework. The government has continued to promote economic
growth through an active industrial policy that targets fiscal incentives, increases public
investment, promotes development of skill sets attractive to foreign investors, and focuses on
economic diversification. Well-secured property rights promote entrepreneurship and productivity
growth.

Thailand-To revive economic growth, the military-controlled government has prioritized policies
to boost consumption and investment, including increased public spending on infrastructure, and
has gradually made the regulatory framework more efficient and transparent to attract investment
and better integrate the economy into the global marketplace. Business-formation procedures have
been streamlined, and the financial sector has been opened to competition.
Vietnam- The economy expanded at a very fast rate in 2018 and will benefit from new global
supply chains that evolve from ongoing U.S.–China trade tensions. To continue strong economic
growth, Vietnam will need to reform state-owned enterprises, reduce red tape, increase business-
sector transparency, and increase recognition of private property rights. Strengthening institutions
to make the regulatory regime more efficient, shrinking the bloated and opaque bureaucracy and
making it more transparent, and bolstering the weak judicial system would also promote economic
freedom.

Political stability - country data from around the world:

The average for 2017 was -0.05 points. The highest value was in Monaco: 1.65 points and the
lowest value was in Yemen: -2.96 points. Below is a chart for all countries where data are available
for: Political stability
Inference- looking at the parameters- Government regulation, political stability and economic
freedom, following observations were made-
1. Singapore is most politically stable and is good for trades
2. Malaysia has a positive political stability compared to world's average, with improving
economic freedom and reduced corruption
3. Even though Thailand has a more global marketplace for trade, it scores poorly in political
stability ranking.
4. even though Vietnam still ranks on an average in political stability index but the country
and the regulations are improving year on year

We can conclude that ITC is a very big player which can determine the trends of the market when
it enters into the country. So, low political stability might not have much effect on the investments

Cultural dimensions

On comparing the cultural dimensions of 4 major countries- Vietnam, Singapore, Malaysia and
Thailand using Hofstede’s model, we got following data-
We also compared these countries with India to know the differences in cultural dimensions

On comparing the cultural similarities of different countries with India to enter for paperboat using
Hofstede’s model, following observations were made
 Philippines and Malaysia are similar to India on factors uncertainty avoidance and
Masculinity respectively. This means that people of Philippines and India are equally
relaxed and tolerant while for people of Malaysia like that of India. Preference cannot be
determined
 Except for the parameters Indulgence and Individualism , Indonesia is found to be
culturally similar to India on the remaining parameters which means there is high chance
of acceptance of the product in this country

Tariffs/Tax Rates/Ease of Imports

Most of the Association of Southeast Asian Nations (ASEAN) region is a free-trade area.
Accounting for 96% of all international trade of the Association of Southeast Asian Nations, the
first six signatories of the Common Effective Preferential Tariff Scheme for the ASEAN Free-
Trade Area (AFTA) have reduced their custom tariffs on intra-regional trade to 5% for all export
products to the “Inclusion list” or removed them in total.
For Category A countries:
1. Import duties of at least 80% tariff lines are eliminated
2. Import duties on all Information and Communications Technology (ICT) products, as
defined in the e-ASEAN Framework Agreement, are removed
3. Import duties on all Priority Integration Sectors products are at 0%
4. Import duties on all the goods are equal to or less than 5%

Ease of Doing Business

EASE OF DOING Starting a Paying Taxes Trading across
BUSINESS Business Borders
China 78 93 130 97
Hong Kong 5 3 3 31
Macau
Taiwan 15 16 56 55
Japan 34 106 68 51
Mongolia 62 59 62 110
South Korea 4 9 24 33
Bangladesh 177 131 152 173
Bhutan 75 88 17 26
Maldives 136 68 118 152
Nepal 105 109 146 76
Sri Lanka 111 77 158 86
Cambodia 135 183 136 108
Indonesia 72 144 114 112
Malaysia 24 111 73 61
Myanmar 171 155 125 163
Philippines 113 173 105 99
Singapore 2 6 7 42
Thailand 26 36 67 57
Vietnam 68 123 86 94
Australia 14 7 26 95
New Zealand 1 1 9 56

The ease of doing business index is an index created by Simeon Djankov at the World Bank
Group.
Higher rankings (a low numerical value) indicate better, usually simpler, regulations for businesses
and stronger protections of property rights.
In the following list of countries New Zealand and Singapore top the list standing at 1st and 2nd
position respectively.
A nation's ranking on the index is based on the average of 10 sub-indices
We have selected 2 sub-indices based on the mode of entry which we think will be suitable for
ITC Hotels
The 3 sub-indices are –Starting a business, Ease of Doing Business
The average rank for Singapore is highest, but we have seen significant increase in Thailand and
Vietnam and government have taken various initiatives to increase FDI and make new businesses
in the countries.
BERI RANKINGS

We can see that rankings of Vietnam and Thailand both have improved in the recent times.

Conclusion
With the discussion on the above factors, we can see that different countries in the Southeast
Asia can be categorized in the following way:
Based on the market/country attractiveness and competitive strength we have categorized the
countries in the following way:
1) Category A – Thailand and Vietnam
Our primary target market which shows great potential and is still untapped. Starting from
here will give us the competitive advantage with fewer players in the market and relatively
good tourism landscape in these countries.

2) Category B – Singapore and Malaysia

After establishing ourselves in the above two markets, we will further penetrate into the
southeast Asian countries taking help from the already established distribution channels in
Singapore and Malaysia. These countries are well developed and have stiff competition
from other major players.

3) Category C - Indonesia
This country will be the last one to enter where with the increase time the ease of doing
business, improved political stability will lead to a good and mutually beneficial
relationship.
RATIONALE BEHIND SELCTING COUNTRIES IN CATEGORY A
CATEGORY A
Thailand
As the number one tourism market in Southeast Asia, Thailand’s hotel performance has grown
considerably since recovering from the 2014 coup d’état. Thailand recorded its highest-ever
absolute RevPAR level in 2017 at THB2,774.70, a 3.9% increase over 2016. Tourism’s share of
the country’s GDP continues to grow as visitors come in droves, with the country reaching a
record 35 million visitors just two days before New Year’s Eve in 2017.
Thailand’s strong hotel performance is expected to continue throughout 2018, with RevPAR up
8.1% in the first four months of the year. ADR was up 6.1% for the period while occupancy rose
1.9%. Two of Thailand’s key markets saw considerable growth, with Bangkok’s RevPAR up
7.7% for the period and Phuket’s up 11.6%. Following the 2014 coup d’état, Bangkok’s hotel
growth levels have stabilized. The Bangkok market showed resilience in the face of travel
advisories issued by several countries as a result of the coup, taking less than a year for
performance to recover. Bangkok’s hotel demand is expected to continue rising and the city
should be able to absorb incoming supply growth, including 1,500 rooms set to come online in
2018. Looking at the performance of Bangkok hotels that opened between 2012 and 2017, these
newer hotels only needed two and a half years for their RevPAR performance to catch up to pre-
existing hotels. In other key Asian markets, such as Singapore and Bali, it has typically taken
longer for newer properties to catch up. Phuket remains the top leisure destination in Thailand.
Supply growth began slowing down in 2016, and since there has been a surge in tourism
demand, heightened occupancy levels have allowed Phuket hotels to yield some of the highest
rates in the region. During periods of high occupancy, hotels have opportunities to raise their
rates as available rooms become more valuable. Over the 12-month period of May 2017 to April
2018, Phuket recorded 65 nights with occupancy above 90%. On these nights, hotels were able to
charge an average rate 98% higher than all nights when occupancy came in below 70% during
the same period, making Phuket the top performer in terms of high-compression nights among
key Asia Pacific markets. While there are currently 4,600 rooms set to open over the next few
years, Phuket’s strong demand is expected to absorb this new supply quickly.
Vietnam
As one of the fastest-growing economies in Asia, Vietnam has recently experienced strong
RevPAR increases. The Vietnamese capital Hanoi posted a 12.6% RevPAR growth in 2017, driven
by a 4.2% increase in occupancy to an actual level of 81.4% for the year. Growth in foreign
investment, particularly from South Korea, Japan and Singapore, has helped bolster Vietnam’s
hotel growth.
In addition to economic growth, Vietnam introduced e-visas for 40 countries in February 2017,
including the U.S., China, Japan, South Korea and the Philippines. This has helped boost tourism
significantly. According to the Vietnam National Administration of Tourism, the country saw
record foreign arrivals in 2017, nearing 13 million, which was a 29% increase over 2016. The
Asia-Pacific Economic Corporation (APEC) Summit was held in Da Nang in November, with
many ministerial meetings driving hotel business in Hanoi. Additionally, Hanoi is well connected
to the northern part of Vietnam, making it a good stopover for travel to other destinations.
Now if we deep dive into the major cities that ITC can enter to step foot in the markets of Vietnam
and Thailand are-
Marketing Mix
Product
ITC Hotels has been declared as one of the best luxurious and greenest hotel chains in the global
market. They have been a favorite amongst leisure travelers because of qualitative products and
unparalleled services.
Resorts, havellis, heritage palaces, five-star hotels and super deluxe hotels are all part of its hotel
chain. It also has a ready-to-eat line of food products titled Kitchens of India. In order to be able
to cater and offer services to a wider range of audience, ITC Hotels have diversified in four
different brands like

 Welcome Heritage
 Fortune
 Sheraton
 Luxury Collection

ITC Restaurants are equally famous amongst the foodies and these are Bukhara, Kebabs and
Kurries, DumPukht, Dakshin and Peshawari. Employees in a hotel business are one of their main
assets as they offer innumerable services that need a lot of dedication and hard work. ITC Hotel
workforce has redefined and set up new standards in the hospitality business.
Since majority of tourism in Vietnam & Thailand comes from Developed and developing countries
like South Korea, China, Japan, USA, Russia, Australia and Europe and these tourists are looking
for a leisure weekend in both the countries and they are capable of staying in a Luxury hotel. ITC
should go with their “Welcome Hotels” brand of 5-star Hotels in these two countries.

Price
ITC Hotels have gained international recognition and fame because of world-class services and
qualitative products in their luxurious and top hotels. Pricing is one of the major issues in
Hospitality sector and ITC Hotels have adopted a pricing strategy. Its policy is value-added as it
is offering best possible value for money and the best part is that its clients are satisfied with
qualitative services and thus do not hesitate to shed extra bucks. So, for both the countries they
should go with their Premium Pricing Strategy as it goes with their Brand image, Quality of
product and service.
Competitor Pricing – INR 10000 – 30000
ITC Pricing - INR 15000 - 30000

Place
A hotel which is conveniently located receiving more competitive advantages than its
competitors. Not only is the location preferable now but it should also continue to be ideal
through-out the business life. Since the trend in targeted countries and cities is that majority of
tourist are coming for leisure and yet entertaining. So we would suggest that the location near the
beaches or near the main business zone of the cities will be the best place.

Promotions
ITC Hotels have a global reputation and that has led it to play host to world leaders and royalties.
As part of its marketing plan, it has an extensive collection of art from fifty well-known artists
like Tyeb Mehta and M.F. Hussein. ITC has an apt tagline “Responsible luxury” and it has
dedicated 100% efforts for eco-friendly designs. All its luxury hotels have LEED Platinum
certificates by US Green Building Council and the company has doubled its efforts for recycling
and reducing carbon footprint and solid wastes. It also has a unique brand logo “Namaste”.
ITC Hotels offer several incentives to its customers to maintain their loyalty. It has a scheme
titled Executive Travel Value Plan or ETVP that offers special and discounted rates to executives
while travelling from on business or leisure from one city to another and staying in ITC Hotels
along the way. Every time a person stays at ITC Hotel he/she earns green points which
accumulate and offers rewards.
We suggest using Media mix (newspapers, radio, television, billboards, websites, emails and
direct mail), Social Media, travel Assistants, Hotel Directories)

People
People are essential element of the new marketing mix model. People refer to founders,
employees, customers’, service and culture. Company can only accumulate profit by
building and maintaining its relationship with customers. Besides, customers are likely to be
loyal to organizations that serve them well. Hence, recruiting the right people and training them
appropriately to deliver the company messages are extremely significant. Customers’ behavior,
sentiment and judgment about the company and its products depend greatly on the employs they
interact with. Knowledgeable workers are gold assets of the company and highly appreciated
because they add significant value to the total product and service offerings. In return, staff
should acquire interpersonal skills, proper communication skills and competent service
knowledge to develop and maintain a high quality personal service. Friendly, courteous and
enthusiastic manner is also necessary. ITC should also hire their staff from the respective country
in order to add some localization effect and understand the country culture in order to add
modification in their process.

Physical Evidence
It is clearly that service is intangible and inseparable however customers tend to rely on physical
layouts to help them examine and evaluate the product before purchasing it. Therefore, physical
evidence is developed to replace these physical cues in a service. The definition of physical
evidence can be explained as appearance or performance in the environment where consumers
have opportunities to make judgements on the organization. Today buyers can simply
approach with variety of products and they expect a high level of presentation in modern shops.
Not only do they require to easily find the direction to the store, but they also look forward to a
good standard and presentation. Physical evidence includes the outside design of the building
itself, parking place, surrounding’s landscape and the environment. The interior of any service
environment is important as well: interior architecture of the facility, equipment, internal
environment and the ambient conditions concerning temperature, color, smell and sound, music
and air conditioning. At the same time, a well-designed Website’s layout can entice customer’s
interest and raise their awareness to the company’s products.

Process
The interaction between service employees and customers, customers and service environment,
systems and other facilities will be managed through process management. Companies can
reflect its situation and acknowledge “the moment of truth” by practicing process activities such
as handling customer complaints, identifying customer needs and requirements, handling order,
just to name a few. Improving delivery service, being aware of the weaknesses and prompt
response to customers will reward the company with high rates of returned guests, strong brand
positioning and increased sales. In conclusion, managing and applying the tactical marketing mix
tools logically will definitely aid the company to obtain a good result in every aspect,
especially in building and maintaining customer relationship, reaping profit and running business
smoothly and effectively. ITC current process is very smooth and effective when it comes to
customer handling. They continue their process and add some local culture rituals and practices.

Marketing Plan of ITC Hotels

 Objectives

1. To decide which brand of ITC hotels, need suits for which market.
2. How do they need to be customized according to the local setting.
3. How are they to be marketed keeping in mind its traditional way of working.
4. Tackling local competition.

Market Entry Strategy

Vietnam:
It ranks 159 in GDP per Capita as per 2017 and hence the local population is not affluent enough
to afford a lot of luxury hotels.

However, the capital city of Hanoi is perfectly suited for the luxury brand of ITC as it is more
affluent than rest of Vietnam along with Ho Chi Minh City.

Hilton is one of the world-famous brands having its luxury hotel in Hanoi, Vietnam along with a
few more.

Although most of the currently existing hotels are in prime locations they can be beaten by
making the ITC hotel completely based on technological innovation in hospitality industry.

If ITC can provide the same average price for a five-star hotel as other ones and provide an
advantage in terms of technology it can beat others as Vietnam lags behind rest of Eastern Asia
in terms of technology and would love innovative things.

Moreover, this way the image of Vietnam will be better in front of foreign tourists who are used
to using technology in every aspect of their lives.
For other cities it can come up with Fortune hotels whose prices can also match that of OYO in
the long run which is the major competitor of every hotel chain at the moment.

Thailand

Thailand is although 99th in GDP per capita ranking but it witnesses almost every kind of tourist
every single day. Being one of the most popular tourist destinations in the world it is a blessing
in disguise for any hotel chain that wants to start its hotels in any city of Thailand.

Hotel and hospitality industry in Thailand is massively red ocean and the market entry needs to
have pinpoint precision. Thus, the first hotel by ITC in Thailand can be opened in the lesser
popular city of the lot. Rather than Bangkok and Pattaya it can go for Phuket which is cheaper to
open a hotel as compared to other two and has slightly less competition.

ITC shall also face competition from Chanalai and Mariott hotels which have a stronghold in the
country. Hence a Joint Venture with a medium popular hotel shall work well. Since, it can bank
upon the popularity of ITC hotels and ITC will get indigenous knowledge and workforce which
can also help it expand to Bangkok and Pattaya and other cities.

Thailand witnesses all kind of tourists all year round (very heavy spenders to very budget tight
tourists) thus it should start with its 3 brands in JV with a single hotel chain straightaway.
ITC Hotels, Welcom Hotels and Fortune Hotels.

Promotion

Vietnam:
Digital marketing is not very popular in Vietnam so most of the promotion needs to be offline in
Vietnam and should centre around its heritage as Vietnamese people believe in its heritage a lot.

It can be marketed along with its UNESCO World Heritage sites and ITC can strike a deal with
Vietnamese government to increase their overall tourism and thus develop a lot of word of
mouth among the people of the country. For example, Incredible India kind of campaigns.
It can be used as a shooting point for Vietnamese movies and mentioning ITC in the credits can
act as a good marketing strategy.

Thailand:

ITC Hotels in Thailand need not be marketed just in Thailand but all over the world digitally
keeping in mind the popularity of Thailand as a tourist spot.

It should act as the hospitality partner of any Diplomatic and Sport event which are common in
Thailand so that ITC is seen as the prime hotel chain in Thailand.

Extensive digital marketing needs to take place in terms of SEO and rankings on hotel booking
websites like Expedia since Thailand is full of hotels in every category. Thus, ITC should be
spending heavy bucks on coming on top of online search rankings.

Offline, its marketing should start from the airports itself.

References

https://www.statista.com/statistics/311948/travel-and-tourism-total-contribution-to-gdp-
worldwide-by-region/
https://pata.org/store/wp-content/uploads/2018/07/PATA-VE-Bulletin-July-2018.pdf
https://theaseanpost.com/article/enhancing-tourism-industry-asean
https://ourworldindata.org/tourism
https://www.heritage.org/index
https://www.theglobaleconomy.com/rankings/wb_political_stability
https://www.hofstede-insights.com/product/compare-countries/
https://www.statista.com/statistics/310405/leading-cities-in-international-visitor-spending-
worldwide/

Appendix

https://www.thehindu.com/business/itc-open-to-increased-overseas-footprints-in-hotels-
segment/article17893975.ece

https://www.ibef.org

https://www.statista.com/topics/962/global-tourism/

https://www.itcportal.com/businesses/hotels.aspx