Chapter 5

Hotel / Hospitality Marketing

Overview
Introduction to Industry Marketing Mix (8 Ps)
1. 2. 3. 4. 5. Product (Product levels & Service Flower) Price Place (Channels of Distribution) Promotion People (Employees & Customers i.e. market segmentation) 6. Physical Evidence 7. Process (Service Blueprint) 8. Productivity & Quality (Service Quality Dimensions / RATER Analysis)

Overview
SWOT Analysis PEST Analysis Recent Developments University Questions

Introduction to Hotel Industry

The trend is the industry in classification closely under the basis of advancement in technology, marketing and sales, financial and the development is food and cuisine trends. The hotel industry is now concentrating on segmentation as the market contains various types of customers. The concept of budget hotel is an upcoming one in India. The hotelier would like to offer a reasonable amount of good facilities at an affordable price Today the hotel includes is making a reasonable program in both public and private sectors. Independent chains are The Taj, the top has gives a new look to the hotel ring in India.

Hotel the concept

A public place
where all possible facilities like accommodation, entertainment, etc.
are provided to people who stay for a temporary period

Classification of Hotels
Residential

Commercial
Resort

International
Floating On basis of standards and control (Approved, unapproved by Dept. of Tourism) On basis of stars (Facilities, quality, luxury aspects)

Marketing Mix of Tourism Industry

Product
Characteristics
All hotels of the same category core services are same distinguished by peripheral services like hotel personnel Continuous change in the product mix
Eliminate outdated services Incorporate latest developments as per changing likes and dislikes of the customers

Factors to be considered while formulating product mix

Catering management Restaurant & Cafeteria management Management of bedrooms Management of buffet & convention halls

Product
Reception Lodging Boarding Entertainment

Shopping
Personal care
Communication & Transport
Medical

Product

Product Levels
BENEFIT MEANING The fundamental benefit or service that the customer is buying WITH RESPECT TO THE TRAVEL AND HOTEL INDUSTRY Rest & Sleep

1. CORE BENEFIT

2 BASIC PRODUCT
3 EXPECTED PRODUCT

Basic, functional attributes

Set of attributes/conditions the buyer normally expects

Hotel room with all amenities A clean bed, fresh towels, working lamps, and a relative degree of quietness, etc.

Prompt services, Remote controlled 4 AUGMENTED That meets the customers desires AC & TV, 2 Telephone lines, etc PRODUCT beyond expectations
5 POTENTIAL PRODUCT The possible evolution to distinguish the offer Wi Fi connections in hotel rooms, home theatre systems, etc.

Product
Service

Flower
External building and design

Room features Food related services

CORE: SLEEP

Lounge facilities

Medical

& REST

Reception
Security Leisure facilities SUPPLEMENTARY SERVICES

Price
Includes For room tariffs For food and beverage For functions

Pricing strategy for promotions: Seasonal discounts Trade discounts Special discounts

Place
In hotel services, due to intangibility factor, the distribution systems and channels and not given importance

What do we need to distribute while delivering hospitality services?

INFORMATION

Place - Channels of distribution

Zero level
Hotel Companies Users

One level
Hotel Companies Travel Agents Users

Two level
Hotel Companies Tour Operators Travel Agents Users

Promotion
Advertising & Publicity Sales promotion Word of mouth

Personal selling
Telemarketing

People
External Customers Receptionist People Porter

House keeping
Internal Employees

Waiter
Chef Back - end employees etc

Market Segmentation(External Customers)

Business Segment
[Univ Q May 05(5 marks)] Includes corporate professionals, traders & businessmen travelling on business purposes, each category having different preferences

Pleasure Segment
People from different walks of life leisure and entertainment.

Demographic Segment
Based on income, occupation, age, gender, education.

Market Segmentation (External Customers)

Social Class Segment
Refers to different income groups

Benefits Sought Segment

Different people seeking particular benefit such as location, accommodation, types of meals, etc.

Geographic Segment
Based on geographic location of hotels

Frequency Segment
Such as light, medium and heavy users.

Physical Evidence
Location of the hotel Hotel building

Hotel Bedrooms & other amenities

Hotel function room Logo, Website, Brochures, etc

Process (Service Blueprint)

Hotel exterior parking Desk, Reg. papers, Lobby keys Elevators, Hallways rooms Room Amenities Food Bills Desk, Exterior Parking

Line of Interaction Arrive at Hotel Line of Visibility Go to Room Sleep, Shower

Check in

Eat

Check out and leave

Process Check out

Process Registration

Line of Internal Interaction

Registration System

Registration System

Productivity & Quality

(Service Quality Dimensions/RATER Analysis)
Ability to perform promised service; accurately & dependably

What are the determinants of quality in the hotel industry? [Univ Q Nov 05(10 marks)]
Adaptability & Prompt Service Reliability

Responsiveness

Assurance Security, Credibility & Courtesy

Ease of access & Customer Orientation

Empathy

Tangibility

Physical Evidence

SWOT Analysis
Strengths:
Rich natural and cultural diversity of India Demand-supply mismatch between the demand and supply of rooms leading to higher room rates and occupancy levels. Government support for the development of the infrastructure and of new tourist destinations and circuits.
The Department of Tourism (DOT) - the "Incredible India" campaign

Increase in India's share in international tourism and hospitality market

SWOT Analysis
Weaknesses:
Poor support infrastructure
Slow implementation of Govt. measures Susceptible to political events
The internal security scenario and social unrest also hamper the foreign tourist arrival rates.

SWOT Analysis
Opportunities:
Rising income of Indians which is expected to enhance leisure tourism. Increased airline activity has stimulated demand and has helped improve the infrastructure.
It has benefited both international and domestic hotels.

SWOT Analysis
Threats:
Fluctuations in international tourist arrivals
Domestic tourism needs to be given equal importance and measures should be taken to promote it.

Increasing competition by several international major for the existing Indian hotel majors. Guest houses replace the hotels

PEST Analysis
Political
Tighter drink/drive laws may discourage local custom using restaurant Disability Discrimination Act Employment law (e.g. minimum wage, hours of work, etc)

Economical
Possible recession Unfavorable currency rates

Social
Ageing population - more people with more leisure time Countryside not as 'exciting' as a city break

Technological
Teleconferencing / Web cams Internet a key, fast growing avenue for advertising.

Recent Developments
Hotel Marketing from the Indian Perspective Application of the marketing concept infant stage Major Indian players Taj Hotels, Oberoi Group, ITC, etc Emphasis to improve managerial proficiency in the unclassified hotels Need to increase governmental support Development of tourism would further boost this industry

University Questions
Discuss the detail relevance of 8 Ps in hospitality industry. [Univ Q Nov 03(10 marks)]
Answer includes the following: Introduction in brief Product mix Pricing strategies Distribution channels Promotion tools People mix (exclude market segmentation) Physical evidence Steps in the process (blueprint diagram excluded) Rater analysis Recent developments in brief