Chapter 5

Hotel / Hospitality Marketing

Overview• Introduction to Industry• Marketing Mix (8 P’s)

1. Product (Product levels & Service Flower)2. Price3. Place (Channels of Distribution)4. Promotion5. People (Employees & Customers i.e. market

segmentation)6. Physical Evidence7. 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 TourismIndustry

Product• 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• Continuous change in the product mix– Eliminate outdated services– Incorporate latest developments as per changing likes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

Characteristics

Product

Product

BENEFIT MEANINGWITH RESPECT TO THE TRAVEL AND

HOTEL INDUSTRY

1. CORE BENEFITThe 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 Levels

Product• Service Flower

CORE: SLEEP & REST

Food – related services

Lounge facilities

Reception

Leisure facilities

Security

Medical

External building and design

Room features

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

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

Registration System

Process Check out

Registration System

Process Registration

Process (Service Blueprint)

Line of Interaction

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)]

PhysicalEvidence

Ability to perform promised service;

accurately & dependably

Security, Credibility &

Courtesy

Adaptability & Prompt

Service

Ease of access & Customer

Orientation

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 DevelopmentsHotel 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