SERVICE MARKETING PROJECT

ON

MAYFAIR (HOTELS & RESORTS)

SUBMITTED BY-

(GROUP-03)

ACKNOWLEDGEMENT

This present piece of work owes its existence to

many people, without whose help it would not have

been possible to complete the project in time. We

the members of group- 3 would like to

congratulate and thank each other for the

successful completion of the project.

We would like to thank PROF. SUVAKANT

MOHANTY for his valuable guidance suggestions

and constructive criticism towards the project.

We would like to thank all the respondents for

sparing much of their valuable time for filling up

the questionnaire and sharing their views ,without

which the project would never had been

completed.

We would like to express our sincere gratitude to

the managing staff of MAYFAIR to guide us by

providing inputs for our better understanding of

the market scenario.

TABLE OF CONTENTS

1.ACKNOWLEDGEMENTS

2.EXECUTIVE SUMMARY

3.OBJECTIVE OF STUDY

4.INTRODUCTION TO MAYFAIR

5.HOTEL INDUSTY IN BHUBANESWAR SWOT ANALYSIS PORTER’S FIVE FORCES

6.MEASURING SERVICE QUALITY SERVQUAL MODEL ZONE OF TOLERANCE

7.MESURING SERVICE QUALITY METHOD SAMPLE PROCEDURE

8.DATA ANALYSIS EXCEL OUTPUT SPSS OUTPUT

9.LIMITATIONS OF STUDY

10. CONCLUSION

EXECUTIVE SUMMARY

The project assigned to us was to perform the analysis of service provided by MYFAIR and study the environment in which it operates. A comparative study of the customer’s expectation and perception is conducted to understand the position of MAYFAIR in the hotel industry operating in Bhubaneswar.The customer expectation is measured on the dual parameters with the desired level and adequate level. Then the expectations of the customers are compared with that of their perception after availing the services.The industry scenario in bhubaneswar is examined with respect to the SWOT and five forces analysis of MAYFAIR.SEVQUAL is used to determine the gap existing in the system and is interpreted in light of company’s performance. The gaps in understanding the customers and their perceptions are measured over the service attributes and shown as per the comparative zone of tolerance of the customers.

MEASURING THE ZONE OF TOLERANCE FOR SERVICE QUALITY OF MAYFAIR LAGOON

OBJECTIVE:1. To find out the dual levels of customer expectation of

service performance.2. To find out the perceived service levels by the

customers.3. To measure the customer satisfaction level by finding

the P‐E gap.

SAMPLING:1. MAYFAIR (Hotels& Resorts)2. Sample size of 75 respondents

RESEARCH METHODOLOGY1. Primary research by filling up the designed structured

questionnaire.2. Secondary research from internet, hotel records.

INTRODUCTION TO MAYFAIR (Hotel & Resorts)

MAYFAIR Group of Hotels is into the hospitality industry since 1982. All the way from being a small hotel at Rourkela to a five star hotel, it has presently grown as a group with four aristocratic properties in Eastern India. The MAYFAIR Group is a leading hospitality player in Eastern India. With astute clientele and industry fraternity, the group has over the years built its reputation as a high end niche player. 

The flagship company of the group, MAYFAIR Hotels & Resorts Limited (MHRL) operates four hotel properties located at Bhubaneswar (MAYFAIR Lagoon), Puri (MAYFAIR Puri), Rourkela (MAYFAIR Rourkela) and Darjeeling (MAYFAIR Darjeeling), while its Sikkim property (MAYFAIR Gangtok) is operated through a subsidiary company MAYFAIR Hotels & Resorts (Sikkim) Pvt. Ltd (MHRSL). Mayfair Lagoon is the only star deluxe resorts with spa services in Bhubaneswar. This is the flagship property of Mayfair Hotels & Resorts Ltd The resort offers a very personalized hospitality with excellent eco-friendly ambiance. MAYFAIR Group is promoted by Dilip Ray and his family members. He has a passion for low rise boutique hotels, with exclusive tropical greenery. Its properties are the best in each of the locations in proximity to the prime business and institutional areas. The MAYFAIR group has played host to who’s & who of the industry, sports and media personalities, senior bureaucrats and top PSU officials. USP of the group has been “built around resort theme” and each property has been created with an ethnic touch and natural greenery. The ambience and eco-friendly environment attracts top end leisure and business tourists. The size of rooms and other support facilities viz. specialty restaurants, Spa, sports and games infrastructure, banquets facilities made available to the customers are very luxurious. The furniture and fixtures are high-end and are sourced from reputed manufactures/ suppliers globally. Prestigious and indulging, MAYFAIR lavishes

business and leisure travelers with discreet service in plush elegance.

HOTEL INDUSTRY IN BHUBANESWAR:MAYFAIR operates in the hotel industry in luxury segment. It has its major competitors as Trident Hilton, Swosti Plaza and Hotels, HHI, Ginger, Kalinga Ashok, The New Marrion, The Crown, The Triumph Residency, Suryansh , The presidency, The Royale Midtown etc.

SWOT ANALYSIS:

1. STRENGTHS- Mayfair Lagoon is conveniently located at a

distance of 9 kms from the airport. Mayfair is an elegant low rise hotel spread on 10

acres of lush tropical greenery around a lagoon, with intimate courtyards, fountains and exquisite works of art.

Mayfair has 102 centrally air-conditioned cottages and suites which provides luxurious space for working and unwinding.

Mayfair provides several facilities like SPA, Doctor on call, personal paper, etc.

Major cities at an easy distance: Cuttack- 25kms, Puri- 65kms, Nandankanan- 15kms, Gopalpur-on-Sea- 160kms, Visakhapattnam- 420kms.

2. WEAKNESSES- Positioning-It has projected itself basically a

leisure hotel which is not particularly targeting the business travelers, who frequent to the city more often on routine basis.

3. OPPORTUNITIES-

Business Hub- Bhubaneswar is the hub for business in Orissa. Many new IT Companies have opened their offices in Bhubaneswar. It is a great opportunity for Mayfair when it can have tie-ups with these companies and increase its customer base.

Increase in the Disposable Income- With the changing times the economy of India has grown and so has the disposable income of people. So people are now more readily accepting the better facilities provided by star hotels though at a high price.

People More Class Conscious- As the disposable income of people has increased, people have become more class conscious, especially, the upper class, who are most unwilling to compromise with anything but their class and taste.

Bhubaneswar’s rich culture: The city has a historical background of 5000 years, so it is one big package of culture and legend that never fails to captivate the imagination of the visitors. There are several beauties that capture the minds of the visitors, for example- the Lingaraja Temple, Udayagiri- Rock Cut Caves, Rajarani Temple, Parsurameswar Temple, Mukteshwar Temple, Svarnajaleswar Temple.

4. THREATS- Competitors- Mayfair faces tough competition

from its peer group that is Swosti Plaza, Trident Hilton

New Entrants- There is also threat from new entrants like HHI, which has business travelers and Hotel Suryansh.

Tata Group Hotel Ginger could be price leader in terms of quality service at low cost, which could potentially decrease its market base.

MICHAEL PORTER’S FIVE FORCESThe five forces that should be considered to analyze the hotel industry in Bhubaneswar are:

1. Rivalry between the firms – The rivalry between the star hotels of Bhubaneswar is quite high. Although not being a metro, there are many big star hotels in and around the city like Mayfair Lagoon, Swosti Plaza, Trident Hilton, HHI, etc. All the hotels compete with each other using various strategies like pricing, etc. so as to gain the maximum market share.

2. Bargaining power of buyers – The bargaining power of buyers is low as there is less number of suppliers in Bhubaneswar like Mayfair, Swosti plaza, Trident, HHI, etc. Also the switching cost for buyers is low as the customer retention ratio is high since the services and products are customized.

3. Bargaining power of suppliers – The bargaining power of suppliers is high as there are few players in this industry. They have differentiated products, low number of substitutes and buyers incur high costs to switch suppliers.

4. Threat of substitute products or services – The threat of substitutes to products and services is high as the industry has few competitors. Since the cross-elasticity of demand of a substitute product is high, therefore, the threat is high.

5. Threat of new entrants – There is high threat of new entrants as there are only a few players in the star hotel industry in Bhubaneswar.

SERVICE QUALITY:

Service quality has been recognized as a key factor in differentiating service products. Customer satisfaction can be secured through high-quality products and services the concept of service should be analyzed from the customer’s point of view, since it was his/her perception of the outcome that constituted the service. Customers may have different values and different grounds for assessment and may perceive the same service in different ways. The concept of service quality has been the subject of concern in variety of service industries. Today’s tourism business environment and the multicultural diversity of international tourists points to the importance of developing a better understanding of the culturally different tourist. With flourishing hospitality industry, understanding the customers has off late gained importance.

Measuring Service Quality and Customer Satisfaction of MAYFAIR:People from different cultures have different preferences, expectations and so travel consumption patterns. Cultural differences in value orientations and social behavior have direct impacts on tourist holiday experiences. The hosts’ ability to respond effectively to a culturally different tourist was an important element determining positive tourist holiday experiences and satisfaction poorness or non-existence of customer satisfaction measuring systems could cause the hotel companies to be lacking in market orientation. Attributes of the service and product that add value for the customer and increase his or her satisfaction might be unknown and that gives no guide to the hotel operators for improvement projects. Therefore, the purpose of this study was to assess the expectations and the perceptions of service quality dimensions towards the hospitality offered by MAYFAIR from the hotel guests’ perspective by applying a modified version of the SERVQUAL model.

There were five key discrepancies that can influence customer evaluations of service quality:• Gap 1 was the gap between customer expectations and management’s perceptions of those expectations.• Gap 2 was the gap between management’s perception of what the customer wants and specifications of service quality.• Gap 3 was the gap between service quality specifications and delivery of the service.• Gap 4 was the gap between service delivery and what the company promises to the customer through external communication.• Gap 5 was the gap between customers’ service expectations and their perceptions of service performance.

The first gap is the knowledge gap.It is the result of the differences in managing knowledge and their real expectations. This gap can lead to other gaps in the process of service quality and is, among other things, caused by:

incorrect information in market researches and demand analysis;

incorrect interpretations of information regarding expectations;

lack of information about any feedback between the company and the consumers directed to the management;

too many organizational layers that hinder or modify parts of information in their upward movement from those involved in contact with the consumers.

The second gap is that of service quality design and standardIt is the result of differences in managing knowledge of the client’s expectations and the process of service provision (delivery).This gap is the result of:

mistakes in planning or insufficient planning procedures;

bad management planning; lack of clearly set goals in the organization; and Insufficient support of the top management to service

quality planning.

The third gap is service delivery gapIt is the discrepancy between development between development of customer driven service standards and actual service performance by service provider and its support staffs.The reasons are:

The team activities are not well coordinated Ineffective training and poor employee-technology job

fit Role ambiguity and role conflict Difficulty in controlling quality and service standards

The fourth gap is the communication gapIt is arising when there is a difference between the delivered service and the service that the company promised to the clients via external communications.The reasons are:

the planning of communication with the market is not integrated with the services;

lack or insufficient coordination between traditional marketing and procedures;

organizational performance not in keeping with the specifications, while the policy of communication with the market abides by the given specifications; and

tendency to exaggerate in accordance with exaggerated promises.

The fifth gap is customer gapIn order to manage service quality, it was important to manage the gaps between expectations and perceptions on the part of management, employers and customers.

The most important gap (Gap 5) was that between customers’ expectations of service and their perceptions of the service actually delivered. So by referring to the gap model, a service marketer must lessen the customer gap (Gap 5). In order to do so, the service provider must first try to lessen the other four gaps (Gap 1, 2 3, and 4) within the organization that hinder delivery of quality service, as each of these elements contribute towards the expectations and perceptions of customers.

In hotel industry how customers perceive the level of service performance that meets their expectations will reflect the quality of service provided by the organization.Henceforth, SERVQUAL instrument identifies and measure the gap between customers’ expectations and perceptions of service quality. Service quality is measured by holding five major dimensions — reliability, responsiveness, assurance, empathy, and tangibles. The instrument suggested service quality as the gap between customer’s expectations (E) and their perception of the service provider’s performance (P). Hence the service quality scores (Q) can be measured by subtracting the customer’s perception score from the customer’s expectations score. This is as denoted by the following equation:Q = P – E

Definition of Service Quality Dimensions

Service QualityDimension Definition

Reliability The ability to perform the service dependably, consistently and accurately

Responsiveness The willingness to help customers and provide prompt service

Assurance The knowledge and courtesy of employees and their ability to convey trust and confidence

Tangible The physical evidence of service including physical facilities, appearance of personnel, tools, and equipment used to provide the service

Empathy Caring, individualized attention to its customers

Expected Service: Dual Customer Expectation Levels

Service delivery is compared against the expectation before delivering the services, keeping reference points. The level of expectation varies according to the reference points the customer holds. The level of expectation range from highest to lowest. The highest is the desired service: the level of service the customer hopes to receive- the “wished for” level of performance. It’s a blend of what customer believes service “can be” and “should be”. The threshold level of acceptable service, adequate service- the level of service the customer will accept. Adequate level is the much lower than desired level. It represents the “minimum tolerable expectation”, the bottom level of service performance acceptable to the customers. The customer assess the service performance on the basis f two standard boundaries: what they desire and what they deem acceptable.

ZONE OF TOLERANCE:The extent to which customers recognize and are willing to accept the variation is known as zone of tolerance. It service drops below adequate service- the minimum level considered acceptable, then it becomes difficult to sustain customer loyalty if service recovery is not done properly on time.Customer’s tolerance zones also vary for different service attributes or dimensions. The more important the factor, the narrower the zone of tolerance is likely to be. Customers are less likely to be less tolerant about unreliable service (broken promise or service errors) than

DESIRED SERVICE

ADEQUATE SERVICE

Normative “should” expectation

Experience- based norms

Acceptable expectations

Ideal expectations of desire

Minimum tolerable expectations

HIGH

LOW

other service deficiencies, which mean they have the highest expectation for this factor. This zone of tolerance is more a function of change in the adequate service level and dependent upon the individuals.

Reliability Tangibility

Measuring Service Quality and Customer Satisfaction of MAYFAIR:

Customer satisfaction with housekeeping was found to be the only significant factor that determined customer loyalty. Reception, food and beverages, and price were regarded as supporting factors when deciding to return, recommend or demonstrate loyalty to a particular hotel. The overall room values were sub-classified into seven different categories — cleanliness, atmosphere, comfort, quality and sufficiency of room fixtures, size of a guest room, availability of complimentary items, and price. Front-office services, on the other hand, were subdivided into seven attributes.

Desired Service

Zone of Tolerance

Adequate Service Desired Service

Zone of Tolerance

Adequate Service

Level OfExpec-tation

These include courtesy; recovery from service failures (handling of complaints); responsiveness, such as convenience of reservation; promptness of check in/ check-out; hotel/tour guide information; tangibles such as variety/quality of sports/recreational facilities (e.g., swimming pools, spa and aerobic exercise rooms); and efficiency of a business centre (e.g., fax machines, personal computers, and copiers). By analyzing the data acquired and interaction with managing staff, it was found that both cleanliness of a guest room and courtesy of hotel staff, were among the attributes that were considered most important, particularly informing impressions of service quality. Service quality in the hotel industry was mainly represented by three dimensions: related to employees (behavior and appearance), tangibles and reliability.The best predictor of overall service quality was the employees dimension, and the most important attributes in this dimension was employee gives individual attention to the customers.The overall evaluation of service quality in Mayfair hotels was determined largely by firstly ‘assurance factors’ — such as security and safety of guests, and effective handling of complaints and problems by hotel staff, and secondly ‘reliability factors such as hotels perform tasks that have been promised to guests and resolving problems encountered by guests. They found that by focusing on only these factors, hotels in Bhubaneswar would be able to achieve high levels of satisfaction and service quality.The hotel industry should consider additional resources to maintain and improve the quality of hotel rooms, including room set-up, cleanliness, quietness, and room temperature control. The cultural differences in service determine expectations of service and the required standards. Tourism marketers and service providers should respond to the culturally accepted standards of the market they serve. Analyzing perceptions of service

quality, particularly with respect to different customer segments, can help hoteliers to develop and formulate marketing strategies that meet the needs of each specific segment more effectively. Once customers’ requirements are clearly identified and understood, hotel managers are more likely to be able to anticipate and cater for their customers desires and needs, rather than merely reacting to their dissatisfaction. Hoteliers can plan effective marketing strategies for satisfying their guests when they first visit, and then developing customer loyalty for the hotel’s service and facilities thereafter

MethodThe relevant texts and survey developed on major attribute, provided the basis for the formation of the closed-ended and self-administered questionnaire for this study. SERVQUAL questionnaire (refer to Appendix) to identify and analyze the gaps between the expectations and the perceptions of hotels’ guests. The modification was made to suit the hospitality industry condition to further analyze the dual expectation levels in terms of desired; the highest and the adequate that is the minimum. A 7-point Likert scale was used in this questionnaire, which comprised four sections. The first section was to measure the respondents’ expectations regarding service quality in MAYFAIR by using the five SERVQUAL service quality dimensions. The second section was to examine the respondents’ perceptions of service quality actually provided by the MAYFAIR when they stayed. The last section was to collect the demographic and basic characteristics of the respondents.

The SampleThe people who stayed in Mayfair (hotel & resorts).The possible reasons for limited study were that company’s policy disallowed research studies by external parties, and the issues of privacy, as well as the security of the guests.

The Sampling Procedure:In this study, a systematic sampling approach — a type of random sampling was used. It was a sampling design that involved choosing every nth element in the population for the sample. In this study, every third hotel customer passing through the check-in counter of the hotel was interviewed. A screening question was asked to identify if they had stayed at least once in the hotel. The further steps only proceeded to administer the questionnaire to those who had.Then responses were fed and analyzed, using SPSS 11.0

DATA ANALYSIS:Data collected from the questionnaire were then analyzed in two ways, first in excel and then next in SPSS.The mean and standard deviation of the satisfaction levels of the respondents towards the hotel stay were also calculated.Besides using descriptive statistics of means and standard deviations, gap analysis and excel was used in comparing means between expectations score and perceptions score of the respondents. Gap analysis was carried out to find out the service quality gaps.It computed the differences between the values of these two means and analyzed tested whether the mean differences were significant.

DATA INTERPRETATION:

Service Quality Perception Relative to Zones of Tolerance by Dimensions:

7

6

5

4

3

2

1

0 Reliability Responsiveness Assurance Empathy

Tangibles

MAYFAIR ZONE of Tolerance Service Quality PerceptionLAGOON

It is analyzed that the data obtained through the questionnaires, the dual level of expectations of the customers are higher before they availed the services of MAYFAIR. The circle denoted the perception of the customers after they experienced the services. In case of most of the attributes the expectation of the customers are higher than what they are actually getting in the hotel.In case of reliability, perception scores are below the boxes, which implies MAYFAIR’s service performance is lower than the minimum level, and the customers are dissatisfied in terms of reliability.In case of assurance and tangibility, the perception of the customers is within adequate level, hence the customers may compromise to certain extend in case of service lapse.Hence, the attributes such se reliability , responsiveness and empathy needs serious attention of the management to improve on by proper implementation of service delivery and recovery.

Excel Output:

Service Quality

Dimensions

Expectations Perceptions Difference (P-E)

Reliability 6.344 5.629 -0.715

Responsiveness

6.104 5.730 -0.401

Assurance 6.613 5.752 -0.861

Empathy 6.333 5.702 -0.631

Tangibility 6.505 5.719 -0.786

SPSS Output:FACTOR ANALYSIS:The technique of factor analysis provides a way of reducing the number of variables in the study to smaller and more manageable number by combining related ones into a single factor. It helps in concentrating onto the factors which needs more attention with respect to other factors.

PRINCIPAL COMPONENTS ANALYSIS:9 major components are identified through the extraction method.

COMPONENTS FACTOR

Modern looking equipments Visually appealing physical facilities Safety facilities Proper check-in & check-out services

CONVENIENCE

Service performed right at the first time

Error-free records Prior information of performance of

services Consistently courteous staff

RECITAL PROCEEDINGS

Proper knowledge to answer customer queries

Understanding of specific needs EXPLICIT SERVICE

Prompt Service Ready to respond customer queries PUNCUALITY

Accessibility Comfortable& clean rooms

USER-FRIENDLY

Courteous and friendly staffs POLITE

Dependable in customer handling problems

TRUSTWORTHY

Customer individualized attention PRIORITY

Service as promised GUARANTEE

Limitations of the Study: This study was conducted under several constraints; one

major limitation was limited access to the MAYFAIR’s guests at the time of survey.

Due to time and resource constraints, the researcher had limited to the MAYFAIR LAGOON and not so extensive study of its competitors.

A further constraint was subject to the approval of the management of MAYFAIR.

There were contextual differences in several factors mainly due to the background of the respondents. The respondents had different education backgrounds, different job environments, and different travelling purposes. These might have contributed towards differences in the perception of service quality.

The questionnaire with two respective parts, gradually made the respondent to loss the interest in the survey and most of them randomly put the lower perceptions whether genuine or not

CONCLUSION:There is a huge difference in the service expectation and perception formed by the customers. Hence, MAYFAIR should re consider its strategy formulations while operating in the service industry. Because, it is leaving around a huge space for the competitors, to provide services as per their expectations.The gap is really high in terms of understanding the customers and its service delivery, hence the hotel should consider the major five service dimensions to understand the customers and the service provider must first try to lessen the other four gaps (Gap 1, 2 3, and 4) within the

organization that hinder delivery of quality service, as each of these elements contribute towards building the perceptions of customers.