Hotel / Hospitality Marketing Chapter 5 Hotel / Hospitality Marketing

Overview Introduction to Industry Marketing Mix (8 P’s) Product (Product levels & Service Flower) Price Place (Channels of Distribution) Promotion People (Employees & Customers i.e. market segmentation) Physical Evidence Process (Service Blueprint) 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are same – distinguished by peripheral services like hotel personnel Continuous change in the product mix Eliminate outdated services Incorporate latest developments as per changing likes and dislikes of the customers Factors to be considered while formulating product mix Catering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

Communication & Transport Product Reception Lodging Boarding Entertainment Shopping Personal care Communication & Transport Medical

Product Product Levels BENEFIT MEANING WITH RESPECT TO THE TRAVEL AND HOTEL INDUSTRY 1. CORE BENEFIT The fundamental benefit or service that the customer is buying Rest & Sleep 2 BASIC PRODUCT Basic, functional attributes Hotel room with all amenities 3 EXPECTED PRODUCT Set of attributes/conditions the buyer normally expects A clean bed, fresh towels, working lamps, and a relative degree of quietness, etc. 4 AUGMENTED PRODUCT That meets the customers desires beyond expectations Prompt services, Remote controlled AC & TV, 2 Telephone lines, etc 5 POTENTIAL PRODUCT The possible evolution to distinguish the offer Wi – Fi connections in hotel rooms, home theatre systems, etc.

Product Room features Food – related services CORE: SLEEP & REST Food – related services Lounge facilities Reception Leisure facilities Security Medical External building and design Room features SUPPLEMENTARY SERVICES Service Flower

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

Back - end employees etc People People External Customers Internal Employees Receptionist Porter House – keeping Waiter Chef Back - end employees etc

Market Segmentation(External Customers) [Univ Q – May 05(5 marks)] Business Segment 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 Check in Go to Room Sleep, Shower Eat Check out and leave Registration System Process Check out Process Registration Line of Visibility Line of Internal Interaction

Productivity & Quality (Service Quality Dimensions/RATER Analysis) What are the determinants of quality in the hotel industry? [Univ Q – Nov 05(10 marks)] Reliability Assurance Tangibility Empathy Responsiveness Ability to perform promised service; accurately & dependably Adaptability & Prompt Service Security, Credibility & Courtesy Ease of access & Customer Orientation 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 Economical Social Technological 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 P’s 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