Impact of advertisement on hotel industry

IMPACT OF ADVERTISEMENT AND PROMOTION ON HOSPITALITY SERVICE PROVIDERS (BUSINESS HOTEL) BUSINESS PROJECT REPORT

SUBMITTED TO: Dr. G. RADHAKRISHNA

2010

AMIT KUMAR (09ESHYD003) IBSHYD

4/29/2010

IMPACT OF ADVERTISEMENT AND PROMOTION ON HOSPITALITY SERVICE PROVIDERS (BUSINESS HOTEL) April 29, 2010

BUSINESS PROJECT REPORT 2



Acknowledgement

I would like to express my sincere gratitude to my Faculty Guide, Dr. G Radha

Krishna for taking out his precious time and guiding me throughout my Business

Research Project. With the help of his valuable suggestions, guidance and

encouragement, I was able to perform this project work.

I would also like to thank ICFAI Business School for giving me this opportunity

to get this small but relevant exposure to the corporate sector while doing my

Project.

Last, but not the least, I would like to thank my colleagues, who often helped and gave me support at critical junctures during the making to this project in one way or another.



CONTENTS:

Sl. No. TOPIC Page No. 1 Introduction 5 2 Objective 7 3 Methodology 9 4 Current Trends of Marketing of Hotels 10 4.1 Hotel Website Design 12 4.2 Hotel e-CRM Customer Relationship Management 13 4.3 Mobile Hotel Website & iPhone App 15 4.4 PPC 16 5 Questionnaire 17 6 Interim Findings & Observations of The Survey 20 7 Conclusion 21 8 References 22



Introduction:

Many companies are trying to put their arms around the ever-evolving marketing services dynamics. They seek to unify efforts across geographies and business units. As it becomes more apparent that marketing excellence needs to be strengthened, companies are implementing new strategies to continue to push the evolution of a fully integrated marketing approach. The advancement of technology (Internet) created new metrics and led to greater accountability in marketing. Companies could directly interact with a greater number of their individual, end-user consumers and evaluate marketing strategy in terms of the number of eyeballs, clicks or footsteps that search marketing delivered. Now, most companies realize that it is also critical to a business’ success to gather information from these interactions to not only measure behavioral change but also increase profitability. The basis for any successful marketing strategy is an understanding of the firm’s target market. The traditional consumer-goods classification system consisting of convenience, shopping, specialty and unsought goods are one example of a classifications system that furthers marketers’ understanding of their consumers (Kotler & Keller, 2006). This system, which is based on how consumers think and shop for products, allows marketers to develop marketing mixes for new and present products that satisfy their customers’ want and needs. (Perreault, Cannon & McCarthy, 2008). There was a time when companies had secreted away in their annexes marketing services organizations that essentially acted as a go-between with the creative brain trusts at "The Advertising Agency." The agency was a one stop shop for just about everything—especially advertising and media buying. Of course, time changes everything and so does the Internet. The rise of the Internet created new metrics and led to greater accountability in marketing. Companies could directly interact with a greater number of their individual, end-user consumers and evaluate marketing strategy in terms of the number of eyeballs, clicks or footsteps that search marketing delivered. Now, most companies realize that it is also critical to a business’ success to gather information



from these interactions to not only measure behavioral change but also increase profitability. The majority of companies have traditionally focused solely on their customers. Now, traditional companies are also collaborating with online giants, such as Google and Yahoo!, as well as other media and direct marketing agencies to increase their market share. All of these changes reflect the resurgence of the consumer as the arbiter of media choices. Many companies are trying to put their arms around the ever-evolving marketing services dynamic. They seek to unify efforts across geographies and business units. As it becomes more apparent that marketing excellence needs to be strengthened, companies are implementing new strategies to continue to push the evolution of a fully integrated marketing approach.



Objective:

• To analyze the current trend of industry. • Develop a new framework for studying and evaluating the Cognitive

Dissonance of loyal customers. • Aligning the shift in the services portfolio for loyal customers, keeping in

mind the demographics, sales channels and the customer trends.

The degree of customer satisfaction is a major factor in the determination of a brand’s familiarity, which in turn justifies the usage of Promotional tools be it Advertisement, or Promotions. There are five levels of brand familiarity:

(1) Brand rejection, (2) Brand no recognition, (3) Brand recognition, (4) Brand preference, and (5) Brand insistence (Perreault, Cannon & McCarthy, 2008) Dissatisfied customers will reject the brand. Dissatisfied customer of Extended Problem Solving type products will experience extreme cognitive dissonance while the level of cognitive dissonance for Limited Problem Solving products will be minimal. Satisfied customers will recognize, prefer, or insist upon the brand. The level of commitment varies with brand insistence occupying the highest level. Brand insistence means the customer is truly loyal to the brand or the customer is brand loyal. Just because a customer regularly buys a product does not mean they are loyal to the product. Individuals often buy a product out of habit because they recognize (brand recognition) or prefer (brand preference) the brand. Depending on the type of decision, customer satisfaction will vary. Therefore, certain generalizations can be made about brand familiarity, cognitive dissonance, and brand loyalty.



Depending on how the product is viewed by the target market, the customer satisfaction will vary between extreme dissatisfaction vs. extreme satisfaction. This in turn determines the degree of cognitive dissonance experienced vs. the degree of brand loyalty.



Methodology:

• Collection of data relevant to the report from internet, developed Questionnaire and sites of service providers and analyze it.

• Consultation with Managers (Sales & Marketing) of Industry. • News Releases on consumer behavior.

Post-testing methods actually gives us an idea about the actual performance of the ad in terms of exposure, perception, communication and sales effect. We can assess the credibility and comprehension of the ads. Few of the methods of this type of tests are: 1. Recall tests: In this type of tests the individuals are asked to answer about the ads entirely on the basis of their memory. It could be aided recall, where they are given few clues to help them recall and unaided recall, which of course is based on memory alone. 2. Recognition test: These are also known as readership tests, whereby it is seen whether they buy the product upon seeing the ads. Importantly, the individual has to qualify as the reader of that particular issue. 3. Triple association test: Here the respondent is given certain cues wherein he can relate to a certain brand. For example – “Thanda Matlab”, if the answer is coca cola, then it is correct. And if the respondent is able to connect the product with the company then it is a triple association. 4. Sales effect tests: They measure the various stages of buyer awareness, preference, buying intention and actual purchase in relation to actual advertising effort. 5. Sales results tests: The additional sales generated by the ads are recorded. It is difficult however to correlate an increase in sales to advertising alone.



Current Trends of Marketing of Hotels:

Online Market and Business Intelligence tools perform a vertical online market

analysis to identify Life Cycles of Money Keywords. It helps you rank for

Hotel Marketing

Hotel Internet Marketing

Hotel Website Design

Hotel Awareness or CSR activity

Travel 2.0

Hotel eCRM

Hotel Advertising

Hotel SEO

Translations

PPC Campaigns

Link Building

Online PR

Hotel Email Marketing

Unconventional Marketing

Website Development



thousands of keywords in your vertical market with fewer inbound links on the

search engines. It integrates your direct response marketing keywords, with your

vertical market keyword research, and your educational buying keyword life cycles

into a single website system.

While analyzing the design of optimal travel or tourism website, it looks at the

correlation of keywords between;

• Traffic

• Number of clicks

• Number of natural searches or queries

• Pay-per-click statistics

• Cost and profitability

• SEO inbound link and deep link competition

• Co-occurrence of related searches

• Statistically improbable phrases and expert verbiage

• Missed opportunity ranking

• Market value

• Market potential and opportunity.

It provides Hotels with a keyword market map. It will give you a global or top

down vertical view of all the keywords and associative co-occurrences in your

market. It will tell you how your market is moving, where it’s been and how it can

possibly evolve. It can even go to the last drop, and extract every keyword in your

market that has a € value attached to it and the ones that do not.



Hotel Website Design

Hotel website development is beyond design and brings the right balance between,

navigation, usability, functionality, structure, visuals and content and normally

offers;

• 100% Freedom

• 100% Flexibility

• Search Engine Optimization

• Functional Design

• Booking Engine Integration

• Web 2.0 Modules

A hotel website includes optimization of content, meta-tags, keywords and site

structure to maximize qualified traffic. With keyword advisory tools at disposal we

can tell what your keywords should be. Hotel website is set-up correctly according

to SEO standards and positioned well in the search engines for a broad range of

keyword searches and market segments.

To reach optimal conversion, design of Optimized Hotel Website is based on heat

map and eye tracking studies by Google, Yahoo and many of the large ecommerce

sites (like Walmart & Virgin Megastores). The Google Golden Triangle theory

tells us exactly where to position each module and component of hotel website to

make it user friendly, easy to navigate and reach a high number of bookings or

conversion. To give hotel complete freedom and flexibility after the hotel web site

has been build of Open Source CMS (content management system) which gives

the hotel complete control over hotel website and allows changing anything.



Hotel e-CRM - Customer Relationship Management

We all know that the cost of retaining current clients is much lower than the cost to

acquire new ones. So hotel marketing plan takes this in consideration and target

repeat and one time guests to promote loyalty.

Hotel e-CRM system helps to manage hotel’s customer or guest database. It is

essential to know who stays at your hotel, how often and when for client loyalty

and retention strategies

Based on stay patterns and preferences you are able to send targeted, relevant and

high quality HTML email messages to your guests and leads. This guest profiling

system of email marketing with newsletters and special offers is aimed at an

increased stay frequency, higher ADR and branding.

Distressed Inventory Management

For periods of low demand you can filter on guests who stayed with you during

specific periods and on other criteria to launch a targeted aggressive offer. As you

only make the offer available to a carefully selected segment of your guests, you

will not erode your price positioning or branding, and still be able to push

distressed inventory and offset weak demand.

Intelligent E-mailing

Hotels e-CRM when connected to hotel PMS can now automatically send

"intelligent" emails that are highly personalized and customized for each guest;

• confirmation emails

• pre-arrival emails



• thank you emails

• guest satisfaction survey

It is important you send the right message, to the right guest, at the proper time all

to enhance the guest experience.

Reporting

Hotel measures the results of electronic marketing campaign and know exactly

how much revenue was generated by each email and campaign. This enables to

learn more about guests’ preferences and buying habits and get their feedback from

the guest satisfaction survey. Most importantly hotel will be able to quantify this

information in numbers and revenue. It gives hotels the following reports:

• Campaign ROI Report

• Email Performance Report

• Profile Report

• Bounce Report



Mobile Hotel Website & iPhone App

SMS marketing & advertising

The Database of Hotel provides mobile phone numbers of your guests as well as

people browsing your website. It enables hotels to scheduled updates on special

offers, packages or event in city. Even local dining in hotel restaurants is targeted

this way.

Provide an interactive mobile brochure of your hotel

Consumers are not longer just using a pc or laptop to access the internet. They look

for travel ideas and to make hotel reservations on their mobile phone, PDA and

Blackberry. With the launch of the iPhone and now the G1 Google Phone this

distribution channel has developed itself more rapidly.

As hotel marketing strategy hotels create a mobile website for iPhone App for the

hotel, SMS confirmations including a map of the hotel location upon booking,

offering a welcome cocktail invitation or tourist map with local attractions upon

check-in through a Bluetooth network.

And this is only the beginning; the possibilities to reach potential clients and

deliver more service to existing guests are infinite...

Send booking confirmation by SMS

Hotel sends a hotel reservation confirmation by SMS (mobile text message).

Hotels even create a hyperlink to a map with the hotel location and directions how



to get there, as well as access to hotels mobile website for any other services the

guest might need. A few days before arrival hotel can send a weather update so he

knows what to pack...

Offer interactive guest services

Anyone who has a Bar Code reader on his mobile phone or NFC Ship hotel can

send a city map with local tourist attractions, public transportation information etc.

Or if they need a taxi, it is just a matter of a click o a button, adding the extra

services you can offer to enhance the overall image of hotel or brand with a mobile

or iPhone hotel application.

Following can be the add on apart from the above services:

Interactive Bluetooth service network

Mobile loyalty card

PPC - Pay per Click

Pay-per-Click (PPC) is a form of Search Engine Marketing (SEM). Besides

launching PPC campaigns in search engines hotels can also manage pay per click

or paid search advertising for hotel website in other websites, for example Face

book, Twitter, and various other promotional and social community sites.



The following Questionnaire has been formulated to collect the data for analysis of Post Testing Techniques, and also sales reports of particular Hotel to be used for analyzing the trend. Questionnaire for Advertising Effectiveness, which includes Ad relevance, believability, motivation, descriptive profile plus viewer life style measures.

(Tick whichever option is applicable)

1. What is the frequency of your visit to a Star Hotel in a month? a) 1-2 b) 3-4 c) 5 or more

2. We will be watching five advertisements that promote different brands of Hotels. The titles of the five ads and their order of play are shown on this card. After you watch the five ads, divide them into three groups. That is, arrange the ads into those you…

a) Will watch over and over again b) Might watch several times c) Never want to watch again

3. Rate your opinion on advertisement of following hotels: (Rate accordingly 1 – Extremely Motivating, 2 - Motivating, 3 – Can Recall, 4 – Cant Recall, 5 – Not Motivating)

a) Taj Hotels b) Oberoi Hotels c) Hyatt Hotels d) Marriott Hotels e) Starwood Hotels

4. What did you like most about this ad? Please be specific…………………………

5. How well do you remember this advertisement? a) Don't remember at all b) Remember company but not product or ad c) Remember company and product but not ad d) Remember ad



6. How would you rate the Internet Advertisement of the Hotel you wish to visit?

Taj Hotels Oberoi Hotels Hyatt Hotels

Marriott Hotels

Starwood Hotels

a) Excellent a) Excellent a) Excellent a) Excellent a) Excellent b) Good b) Good b) Good b) Good b) Good c) Average c)Average c) Average c) Average c) Average d) Not good d) Not good d) Not good d) Not good d) Not good e) Bad e) Bad e) Bad e) Bad e) Bad

7. Based on the features advertised these ads…

Strongly Agree

Somewhat Agree

Neither Somewhat Disagree

Strongly Disagree

The ad message isunderstandable.

The advertisement isbelievable

The ad's message isrelevant to me.

The benefits describedin the ad are believableto me.

After viewing this ad, Iwould consider availingthe services.

This ad is much betterthan other ads forproducts in thisproduct category.

8. Please check the one box that best indicates how descriptive thestatement is of you…

Just likeme

A lot like me

Somewhat like me

Not muchlike me

Not at all like me

It is important to me tobe treated well.

I like the "royaltreatment" in star



hotels I have somewhat old-fashioned tastes andhabits

I like my clothes tolook up to date

I never have enoughtime to visit hotels

I think I am a little bit wild

I think visiting StarHotel is fun

I often buy things onimpulse

I have lots of leisuretime

I expect to have moremoney next year

Name: Gender: M/F Annual Family Income (Rs.): 1) below 5 lacs 2) 5-10 lacs 3) Above 11 lacs



INTERIM FINDINGS & OBSERVATIONS OF THE SURVEY

After consulting few Marketing Managers of hotel it is found that STAS (Short Term Advertising Strength) contributes a lot for increasing the footfalls in any hotel which can be exploited if any hotel aligns their long term strategies to it. The medium-term effect of Advertisement campaign was measured with reasonable precision using regression analysis, and the findings on these three parameters I.e. Rate your opinion on advertisement of following hotels How well do you remember this advertisement? How would you rate the Internet Advertisement of the Hotel you wish to visit? Taj Hotels Advertisement was well remembered and their internet advertisement was rated good which enhances their capabilities to acquire new customers. Oberoi Hotels Advertisement was well recalled and remembered increasing their customer base every day. Also the advertisement got good rating. Hyatt Hotels Advertisement was not well remembered in comparison to other hotels, and their internet advertisement too was not appealing to the customers, which can fail Hyatt to retain and acquire new customers ultimately leading to cognitive dissonance for Hyatt as per the findings of survey. Marriott Hotels also has received low rating for their advertisement and people participating in the survey had found it difficult to recall the ad. Starwood Hotels have comparatively good advertisement as per the survey findings and their ad is well remembered and embraced increasing their chances of acquiring new potential customers.



Conclusion: The Advertiser/Hotel provides the functional benefits. The added values are mainly created and built gradually, but inexorably by the brand's advertising. It is a fair generalization that a brand is the joint product of a sound and well-organized hotel and imaginative advertising. Although the agency writes the advertising campaigns, these are also the concern of the advertiser. The advertiser's contribution concentrates on the important managerial tasks of evaluating the agency's proposals; using their judgment to plan the "business" of the campaign (especially budget and media); and, most importantly, measuring the campaign's effects in the marketplace. Below are some measures to increase the effectiveness of Marketing Campaign of hotels:

• Pre-test to weed out ineffective advertisements • Determine advertisement budgets strategically • Media continuity, not concentration • Use promotions tactically • Tactical Coordination of Marketing Communication • Redefining the Scope of Marketing Communication • Application of Information Technology • Financial and Strategic Integration



REFERENCES: www.xotels.com

http://ezinearticles.com/?Hospitality-Industry---Hotels-Business-Current-and-Future-Trends&id=1958842\

http://www.websuccess77.com/seven_ad_tips.html

www.hvsinternational.com

http://businessschoolonline.org/Lesson32AdvertisingEffectiveness.pdf

http://www.viewzone.com/cognitivedissonance.html

http://www.iimb.ernet.in/newsletter/issues/28

Advertising & Promotion – An IMC’s Perspective-(Belch Belch Purani)

Wikipedia

Hotel Annual Report

Effective Promotional Strategies in Services Marketing: A Conceptual Study (G Radhakrishna-A Suryanarayana-A Srikant)