Service Marketing Strategies – Investigating Current Practices and Related Challenges of Luxury Hotels in Finnish Lapland

Finnish luxury tourism provides engaging hedonic experiences that embody the concept of new luxury tourism. New luxury together with the Finnish culture creates a sector of luxury hospitality that emphasizes simplicity and nature through one-of-a-kind experiences in unique exclusive locations. In addition to the challenges of service marketing and the intangible nature of its product, the marketing strategies of service businesses such as hotels in this area require careful consideration of how to successfully communicate an accurate service promise that captures the uniqueness of their offering. In relation to this, this research project examines the current marketing strategies and related challenges of luxury hotels in Finnish Lapland and the possible impact of the Covid-19 pandemic on their marketing efforts. Using the Service Marketing Triangle together with the 7Ps Marketing Mix framework, the current study investigates the hotel and marketing managers’ perspectives to further understand the theoretical and practical implications of service marketing elements and how they are used to set, enable, and deliver the hotels’ service promise. The data was collected by conducting seven in-depth qualitative expert interviews with the hotel and marketing managers of high-end hotels and hotel resorts located in the Finnish Lapland. The data was analyzed using thematic analysis with references to the elements of the 7Ps Marketing Mix and the Service Marketing Triangle. The findings suggest that these hotels incorporate a range of practices related to the marketing mix elements; product, price, place, promotion, physical evidence, people, and process to set, enable, and deliver their promise of providing high-quality, authentic, and customizable customer experiences. The interviews reveal that these hotels’ products are designed to meet the needs of their customer through customization and are communicated carefully throughout their marketing efforts to set realistic expectations of the uniqueness of the Lappish luxury experience. The prices of these services communicate a sense of exclusivity, but also respond to different factors such as fluctuations in service demand. To follow the sense of exclusivity, these hotels distribute their services mainly through tour operators. They also utilize OTAs and direct sales channels, however, the hotels report experiencing significant challenges relating to these. To address complications related to accurate communication of the distinctiveness of their service offering, the hotels utilize influencer marketing as one of their main promotional tools. Throughout such efforts on social media and the hotels' and third-party distributors’ websites, promotional material play a crucial role in bringing the hotel experiences to life. The hotels adopt a strategy of carefully monitoring their processes at all levels of operations to ensure sufficient business that further contributes to the wider success of Finnish Lapland as a luxury destination. Based on these findings these hotels are suggested to emphasize innovation throughout their operations and marketing strategy to develop distinctive service brands that together contribute to Lapland’s attractiveness throughout the year. Moreover, this study further highlights the synergistic nature of service marketing. It proposes further research to be conducted on how the service promise is set, enabled, and delivered from differing stakeholders’ perspectives.