Position is the place of a product(s) or brand that occupies in consumers’ minds relative to competing offerings. Positioning is the process of developing a specific marketing mix to influence current and potential customers’ overall perception of a brand, product line or organisation. Positioning assumes that consumers compare products based on important features. (Robert and Heath 2012, 629)
2.0 Segmentation Profile
Hotel 81 considers all four major variables of geographic, psychographic, demographic and behavioural to segment their market. For geographic, Hotel 81 is strategically located at near town areas, like Chinatown. This offers tourists an affordable alternative compared to hotels, which are located at town areas. This location makes it easy for tourists to travel around Singapore, as well as attracting them as Chinatown is one of Singapore’s tourist spots. It also has other branches situated at Geylang and Joo Chiat, the well-known red light district areas in Singapore.
Psychographic segmentation is also considered as these areas suit customers who have night lifestyle. According to the Servicescape conceptual framework, customers might stay at Hotel 81 for more reasons than satisfying their physiological need of shelter and sleep. Examples may include parties and intimate night for couples. (Tombs and McColl-Kennedy, 2003).
For demographics, income segmentation is considered. Hotel 81 caters to customers with a lower income, and priced their rooms in a lower and affordable rate. In behavioral segment, Hotel 81 seeks to provide benefits to customers like quality, service and economy. Hotel 81 prides itself as a finalist in numerous tourism and service awards. An one hour free trial of room is also offered to its customers. Light users’ usage rate is also considered to its customers, e.g: providing hourly room service.
The appearance and atmosphere of Hotel 81’s physical facilities is presentable and comfortable. Ailawadi and Keller (2004) stated that a perceived difference in the atmosphere of the hotel may also influences customer’s behaviour. The response that atmosphere elicit from consumers varies along three main dimensions of pleasantness, arousal, and dominance. Different elements of the hotel’s environment, such as colour, décor and crowding may influence how long a customer may want to stay in the hotel or how much he will spend in it. The more pleasant the environment is, the higher the tendency of the customer coming back.
Being a budget hotel, it also gives customers a low financial risk. The risk is further reduced when it provides customer assurance of one-hour free trial. This highlights Hotel 81’s commitment to service. Due to price versus perceived quality factor, the perceived service would not be high as Hotel 81 is a budget hotel. According to Chang et al (2008), the bigger the gap is between the perceived service and the received service, the lower the customer satisfaction. Hence, the chance of getting a low customer satisfaction is minimised.
Bo Dai (2010) also stated that customer loyalty also is found to be a significant indicator on the relationship between the price difference and perceived price fairness. Perceived price fairness will result into customer’s satisfaction. If the customer thinks that the price he paid for the hotel room and service is worth it, he is more likely to stay with the hotel again during his next trip.
Under positioning strategy, Hotel 81 uses product differentiation, perceptual mapping and repositioning. Through product differentiation, Hotel 81 identifies its uniqueness and competitive advantages over other hotels, such as its low costs (fast coverage through word-of-mouth rather than advertising).
For perceptual mapping, we compare Hotel 81 with its competitors based on its uniqueness and its value in the minds of the competitors based on two main aspects: Perceived Price...