Academic journal article IUP Journal of Management Research

An Analysis of the Competitive Marketing Strategies of the Hospitality Industry in UAE

Academic journal article IUP Journal of Management Research

An Analysis of the Competitive Marketing Strategies of the Hospitality Industry in UAE

Article excerpt

Companies of all sizes around the globe are in a constant struggle to build their competitive capabilities to strengthen their position and outperform their rivals. The present study examines the competitive marketing strategies used by a sample of hotels from the Emirates of Dubai and Sharjah who occupy different competitive positions in the hospitality industry as 'market leaders', 'market challengers', and 'market followers'. The hospitality industry can serve as a useful example to throw some light on the success factors that might ensure superior performance of other related service organizations. Using a Chi-Square test, the study seeks to find out if there are differences in the sample characteristics and also whether the marketing strategies adopted by firms differ according to their competitive position.

Introduction

Gaining competitive advantage is a major challenge for companies operating in the contemporary ever-changing business environment. Most companies feel that understanding the customer is important. Therefore, it is necessary that they develop a marketing concept to increase their customer orientation as well as their goal orientation (McDaniel Jr. and Gates, 1996; and Lancaster and Massingham, 2001). An understanding of their competitors' objectives, strengths and weaknesses is important for developing and implementing competitive marketing strategies-strategies that strongly position the company against competitors and give it the greatest possible competitive advantage (Cravens, 2000). The competitive advantage (or an edge over competitors in terms of better financial return on investment and superior long-term overall performance) that most companies strive to seek must be significant and sustainable.

Companies of all sizes around the globe are in a constant struggle to build their competitive capabilities to strengthen their competitive position and outperform their rivals. They are consistently exploring effective marketing strategies to improve their performance and widen their market share. This competition is more evident in the services sector which is rapidly growing in all industrialized and newly developing countries (Lovelock et al., 1999; and Zeithaml and Bitner, 2000). The present study examines the competitive marketing strategies used by a sample of hotels from the Emirates of Dubai and Sharjah companies who occupy different competitive positions in the hospitality industry as 'market leaders', 'market challengers', and 'market followers'.

Literature Review

The hospitality industry in UAE, especially in Dubai, has experienced a significant growth over the past one decade. In 2006, for instance, the United Arab Emirates (UAE) received more than six million tourists from around the world. The rapid growth of the hospitality industry and its future growth potential makes it an important area of study. The hospitality industry is seen as a highly productive component of the UAE economy, and all levels of governments have shown a considerable interest in its development.

One important feature of the UAE hospitality industry is that it operates in a highly competitive environment. As such, the hospitality industry can serve as a useful example to throw some light on the success factors that might ensure superior performance of other related service organizations. The present study is expected to enhance our understanding of the competitive structure of the industry, the forces that influence it and the opportunities and threats it presents.

Competitive Positions of Firms

As noted by Kotler et al. (1996), Boyd et al. (1997), and Kotler (2000), firms competing in a given market are likely to vary in terms of their size, resources and objectives. Some are large, have plenty of resources and aspire to become the dominant players in the market; while others are small, have limited resources and only wish to survive. As a result of these variations, firms occupy different competitive positions in the target market. …

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