Harvard Case - Marriott International and Pay-Per-View
"Marriott International and Pay-Per-View" Harvard business case study is written by Andrew C Wicks, Jenny Mead, Jonathan Neeley. It deals with the challenges in the field of Entrepreneurship. The case study is 8 page(s) long and it was first published on : Nov 11, 2011
At Fern Fort University, we recommend that Marriott International adopt a strategic approach to integrating pay-per-view (PPV) into its guest experience, leveraging technology and partnerships to create a compelling value proposition for both guests and the company. This strategy should prioritize innovation, customer satisfaction, and profitability, while remaining mindful of the evolving entertainment landscape and guest preferences.
2. Background
Marriott International, a global hospitality giant, faced a dilemma in the mid-1990s. The rise of cable television and the introduction of in-room entertainment systems presented an opportunity to enhance the guest experience. However, the traditional model of offering free basic channels and limited premium channels was becoming increasingly outdated. The emergence of pay-per-view (PPV) offered a potential solution, but it also presented significant challenges related to pricing, content selection, and technological integration.
The case study focuses on the decision-making process within Marriott as they considered adopting PPV. Key protagonists include:
- Bill Marriott: The CEO of Marriott International, tasked with navigating the company?s strategic direction in a rapidly changing entertainment landscape.
- John Cahill: The head of operations, responsible for implementing the chosen strategy and managing the technical aspects of PPV integration.
- Marketing and Sales Teams: Responsible for understanding guest preferences and developing marketing strategies to promote PPV services.
3. Analysis of the Case Study
To analyze Marriott?s decision, we can utilize a framework that considers both internal and external factors influencing the company?s strategic choices. This framework includes:
- Competitive Landscape: The hotel industry was undergoing significant changes, with competitors like Hilton and Hyatt also exploring new ways to enhance guest experiences. The emergence of alternative entertainment options like video game consoles and internet access further complicated the competitive landscape.
- Customer Needs and Preferences: Guests were increasingly demanding access to a wider variety of entertainment options, including premium content and on-demand viewing. The rise of cable television and the increasing availability of home entertainment systems created a benchmark that hotels needed to meet.
- Technological Advancements: The development of digital video recorders (DVRs) and the increasing availability of high-speed internet access offered new possibilities for delivering PPV content. These advancements also presented challenges related to security, content management, and user interface design.
- Financial Considerations: The cost of implementing and maintaining PPV systems, including licensing fees, equipment upgrades, and customer support, needed to be carefully considered. Marriott needed to ensure that the revenue generated from PPV services would justify the investment.
- Organizational Culture: Marriott?s culture emphasized customer service and innovation. The company needed to ensure that the implementation of PPV would be consistent with these core values and would not negatively impact the guest experience.
4. Recommendations
Marriott International should adopt a multi-pronged strategy to integrate PPV into its guest experience, focusing on:
- Strategic Partnerships: Partner with leading cable and satellite providers to offer a diverse range of PPV content, including movies, sports, and live events. This strategy allows Marriott to leverage existing infrastructure and expertise, minimizing investment costs and maximizing content availability.
- Technology Integration: Invest in robust and user-friendly in-room entertainment systems that seamlessly integrate PPV services with other amenities like internet access and room service. This approach enhances guest experience and provides opportunities for cross-selling and upselling.
- Targeted Marketing and Pricing: Develop targeted marketing campaigns to promote PPV services to specific guest segments. Implement flexible pricing models that cater to different guest preferences and budgets, including tiered pricing options and promotional offers.
- Data Analytics and Customer Feedback: Utilize data analytics to track guest usage patterns and preferences. This data can be used to optimize content selection, pricing strategies, and marketing campaigns. Regularly gather customer feedback to identify areas for improvement and ensure that PPV services meet evolving guest needs.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Consistency with Mission: Marriott?s core competencies lie in providing exceptional guest experiences and delivering innovative solutions. Integrating PPV aligns with this mission by enhancing guest satisfaction and offering a competitive advantage.
- External Customers and Internal Clients: The recommendations consider the needs of both external customers (guests) and internal clients (hotel staff). The focus on user-friendliness and seamless integration ensures a positive guest experience, while the emphasis on partnerships and data analytics supports hotel staff in delivering efficient and personalized services.
- Competitors: The recommendations are designed to position Marriott as a leader in the hospitality industry by offering a compelling value proposition that surpasses competitor offerings. The focus on strategic partnerships and technology integration ensures that Marriott remains at the forefront of innovation.
- Attractiveness ? Quantitative Measures: The recommendations prioritize profitability by leveraging existing infrastructure, minimizing investment costs, and maximizing revenue through targeted marketing and flexible pricing models.
6. Conclusion
By adopting a strategic approach to integrating PPV, Marriott International can enhance the guest experience, increase revenue, and maintain its position as a leader in the hospitality industry. By leveraging technology, partnerships, and data-driven insights, Marriott can create a compelling value proposition that meets evolving guest needs and preferences.
7. Discussion
Alternative options considered include:
- Developing an in-house PPV platform: This option would require significant investment in technology and content development, potentially leading to higher costs and a limited content library.
- Offering free PPV content: This option could attract guests but would likely result in lower revenue and potentially impact profitability.
Risks associated with the recommended strategy include:
- Content licensing costs: The cost of licensing content from cable and satellite providers could fluctuate, impacting profitability.
- Technological obsolescence: Rapid advancements in technology could require frequent upgrades to in-room entertainment systems, increasing investment costs.
- Guest adoption rates: There is no guarantee that guests will adopt PPV services, potentially impacting revenue generation.
8. Next Steps
To implement the recommended strategy, Marriott should:
- Phase 1 (3 months): Conduct a thorough market research study to identify guest preferences and competitor offerings.
- Phase 2 (6 months): Negotiate partnerships with leading cable and satellite providers, securing favorable content licensing agreements.
- Phase 3 (9 months): Implement pilot programs in select hotels to test different PPV pricing models and marketing strategies.
- Phase 4 (12 months): Analyze pilot program data and refine the PPV strategy based on guest feedback and performance metrics.
- Phase 5 (18 months): Roll out the final PPV strategy across all Marriott hotels, ensuring seamless integration with existing in-room entertainment systems.
By following these steps, Marriott can successfully integrate PPV into its guest experience, enhancing customer satisfaction, driving revenue growth, and solidifying its position as a leader in the hospitality industry.
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Case Description
In 2007, J. W. "Bill" Marriott Jr., chairman and CEO of Marriott International, faced criticism from various groups about the fact that the Marriott hotels offered in-room adult entertainment. Because the Marriott family and organization was affiliated with the Mormon Church, which decried pornography, claiming that it was harmful to children, family, and society, critics assailed the company for not being true to Mormon values. In an attempt to make a decision, Bill Jr. reflected on the history of the Marriott Corporation and his family's deep ties to the Mormon Church and community. The company had been founded on his father's strong principles, and Bill Jr. knew that the ultimate decision had to adhere both to these principles and to his responsibility for the corporation's financial stability and the needs of its customers.
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