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Chapter 5

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

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Chapter 5

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  1. Chapter 5 Hotel / Hospitality Marketing

  2. 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)

  3. Overview • SWOT Analysis • PEST Analysis • Recent Developments • University Questions

  4. 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.

  5. Hotel – the concept • A public place • where all possible facilities like accommodation, entertainment, etc. • are provided to people who stay • for a temporary period

  6. 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)

  7. Marketing Mix of TourismIndustry

  8. 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are same – distinguished by peripheral services like hotel personnel • Continuous change in the product mix • Eliminate outdated services • Incorporate latest developments as per changing likes and dislikes of the customers • Factors to be considered while formulating product mix •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

  9. Product

  10. Product Levels Product

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

  12. Price • Includes • For room tariffs • For food and beverage • For functions • Pricing strategy for promotions: • Seasonal discounts • Trade discounts • Special discounts

  13. 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

  14. 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

  15. Promotion • Advertising & Publicity • Sales promotion • Word of mouth • Personal selling • Telemarketing

  16. People

  17. 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.

  18. 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.

  19. Physical Evidence • Location of the hotel • Hotel building • Hotel Bedrooms & other amenities • Hotel function room • Logo, Website, Brochures, etc

  20. Process Registration Process Check out Registration System Registration System Process (Service Blueprint) Line of Interaction Line of Visibility Line of Internal Interaction

  21. Productivity & Quality(Service Quality Dimensions/RATER Analysis)What are the determinants of quality in the hotel industry? [Univ Q – Nov 05(10 marks)] Ability to perform promised service; accurately & dependably Adaptability & Prompt Service Security, Credibility & Courtesy Ease of access & Customer Orientation Physical Evidence

  22. 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

  23. 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.

  24. 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.

  25. 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

  26. 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.

  27. 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

  28. 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

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