Marketing in Hospitality Industry of UK Assignment Sample

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Marketing in Hospitality Industry of UK

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2013

Marketing in Hospitality Industry of UK

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TABLE OF CONTENTS

Introduction..................................................................................................................................... 1

LO 1 Understand the concepts of marketing in a services industry context................................... 2

1.1 discuss concepts of marketing for a relevant services industry .......................................2

1.2 assess the impact of the marketing environment on the industry.......................................2

1.3 evaluate the relevance of consumer markets in the industry............................................3

1.4 discuss the rationale for developing different market segments ......................................3

LO2 Understand the role of the marketing mix.................................................................... 4

2.1 assess the importance of components of the marketing mix to the industry....................4

2.2 analyse pricing strategies and policies in relation to the industry....................................5

LO3 Be able to use the promotional mix........................................................................................ 5

3.1 evaluate the role of the promotional mix .........................................................................5

3.2 plan an advertising campaign for a services industry operation ....................................... 5

3.3 analyse the role that sales promotion and public relations play in promotional efforts

.............................................................................................. 6

LO4 Understand the marketing cycle in a services industry environment ..................................... 7

4.1 discuss the relevance of market research to services industry operations........................7

4.2 undertake market research for an appropriate product or service ....................................7

4.3 analyse the suitability of different media for marketing an appropriate product or

service.....................................................................................................................................8

4.4 evaluate the implementation of the marketing plan for an appropriate product or service

................................................................................................................................................8

References....................................................................................................................................... 9

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Figure 1 Micro economic factors...........................................................................................2

Figure 2 Black box model for consumer behaviour ..............................................................3

Figure 3 Overview of segmentation, targeting and positioning..............................................3

Figure 4 Marketing mix elements...........................................................................................4

Figure 5 Market research process ...........................................................................................7

Figure 6 Marketing plan......................................................................................................... 7






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Introduction

Marketing is an essential tool so as to ensure success of any service industry including

hotels. It is very important for managers to conduct market research and analyze it to develop

a tactical marketing strategy for organization. The basic function of hospitality marketing is

to understand the needs of consumers, knowing the segments of market and developing the

best marketing tool to increase the market share by reaching more and more customers.

In the dynamic competitive environment, it is important for any hospitality

organization to adapt itself with the changes in consumer’s preference, lifestyle, purchasing

power etc. So the strategic control is very necessary to ensure that the marketing strategy,

objective and system are so designed that it can adapt to changing external and internal

environment. All the elements of marketing mix are significant for developing the strategy

for hotels. Creative planning and effective advertisements helps the hotel to attract new

customers and retaining the old ones (Porter, 2008).

The marketer should consider all the internal and external business environmental

factors and their far reaching influences before designing and implementing strategies. All

this revolves around four P’s i.e. price, product, place and promotion and all th ese aspects are

governed by social, technological, environmental, economical and legal factors. As one

cannot control the external changes so the marketer can respond to the changing situation by

changing the four P’s (Tribe, 2012).

LO 1 Understand the concepts of marketing in a services industry context

1.1 Discuss concepts of marketing for a relevant services industry

Marketing in the hotel industry plays a key role so as to help the leaders in meeting up

with the needs of consumers by having a brief outlook of their wants and demand. A large

number of products and services are a part of hotel industry in form of restaurant, dining,

accommodation, leisure etc. A number of customer retention techniques are also used for the

same so as to increase the effectiveness of services. For example, customer retention

processes has been made a part of marketing efforts by Hilton group of hotels. They have

used regional marketing concept by integrating local voice into overall plans and objectives

to be achieved by firm (Holiday Inn, 2013).

According to marketing myopia theory given by Theodore Levitt, the marketers must

modify the products and services by analyzing the present marketing trends. The same

concept has been used by many hotels in this industry (Bhasin, 2011). These are the reasons

for growth in case of well known hotels like Sheraton, Holiday Inn etc. Marketing concept






According to application of Porter’s five forces model on hotel industry, the savvy

consumers can force down pricing structure, suppliers may limit profits by charging high,

new entrants may come armed up with capacity and hunger for market share and substitutes

can be offered to lure consumers away (Porter, 2008).

1.3 Evaluate the relevance of consumer markets in the industry

Consumers are the core part of hotel industry as they are the key elements to determine

success of entire industry. Consumer culture is a part of hotel industry and emphasizes on

sociological and psychological impacts of buying and spending behavior of customers.

Consumer buyer behavior in hotel industry is a function of personal influences and external

environmental forces which are shown by generic model that reflects the behavioral patterns

of hotel consumers is a reflection of different type of stimuli.

Figure 1 Black box model for consumer behavior

(Source: Understanding Consumer behavior, n.d)

According to many authors it is achievement of trade off between consumer and

competitor orientation that helps to achieve the desired result. Thus many hotel chains are

trying to achieve a balance between the two so as to get the best of both the worlds. The

concept of value chain is also equally important to maintain long term consumer relations

which have been applied by Holiday Inn hotel. It is famous among consumers for good value

chain as it delivers maximum value at a reasonable cost in form of good room with TV,

internet connectivity and reasonable breakfast (Tribe, 2012).






LO2 Understand the role of the marketing mix

2.1 Assess the importance of components of the marketing mix to the industry

Figure 2 Marketing mix elements

(Source: Marketing plan - how to write. n.d)

The products and services of hotel industry are highly perishable and inseparable in

nature. Hence marketers must give due consideration to producing a unique combination of

marketing mix which is relevant to meet the demands in different times. While formulating

the product blend the hotels must pay due attention to the unique selling points offered by

different products and services. They ought to develop strategies by a controlled test

marketing procedure and develop concept and brand themselves accordingly (Burkard, 2011).

Place refers to how the service actually gets to consumers which can be understood via usage

of effective distribution channel so as to deliver the service at right time and in right amounts

so as to ensure consumer convenience and service availability.

For example, many hotels in UK have used Hotel online services as there sales and

distribution channel so as to deliver superior quality to clients and guests via better logistics

management (Enhance booking volumes with Hotel Online, 2013). Technology has also

played a key role in making profound change in hospitality distribution. New models have

been developed in form of Internet based channel and franchising which allows for online

based reservation network while avoiding the development of intermediaries. There is also a

presence of ethical issues with respect to use of power by a channel leader. It is important

element which must be analyzed by hotel managers so that the leader is not forcing the less






powerful channel members to meet a prescribed standard in behavior (Palmer and Hartley,

2009).

2.2 Analyse pricing strategies and policies in relation to the industry

According to pricing theory, it can either be cost, demand or competition based. This

element helps to set the financial objective to be achieved by any hotel so as to get a greater

market share in relation to rival firms. Hilton hotel has used the pricing policies of demand

oriented and competitive pricing strategies. If hotels around Hilton are priced high then it

applies the same principle. On the other hand if there is an area wise decrease in pricing then

the same concept is applied by the hotel. It thus makes price adjustments accordingly

(Burkard, 2011).

Pricing policies in hotels are based on demand and supply circumstances that make

hotel increase or decrease prices. For example, during London Olympics held in 2012, most

of the hotels in London continued to slash their prices to fill rooms on account of domestic

buyers. Competitive scenario also forces hotels to adopt competitive pricing strategies in

order to be in tune with the demand and supply norms. Along with this, there is also a

seasonal fluctuation and increasing competition that helps in changing and undertaking

strategically as well as tactical pricing decisions. In such a scenario most of the UK hotels

follow ethical norms while charging consumers which also plays a key role in the brand

loyalty aspects.

LO3 Be able to use the promotional mix

3.1 Evaluate the role of the promotional mix

Promotional mix plays a key role in the UK hotel industry which involves

undertaking of efforts to take the product from business to consumer desk. A large number of

strategies have been undertaken by UK based hotels. As a part of its branding element of

promotional mix Marriott hotel has introduced a new fusion menu. It involves introduction of

a wide variety of dishes to come up with new ideas. This has been successful to increase

revenue during London Olympics 2012. Holiday Inn has also promoted itself by used the

elements of online marketing by an ad campaign using internet based channels to reduce the

London based hotel (Tribe, 2012).

A large number of considerations are needed to be evaluated while designing

promotional mix approach. The budget laid by hotel on promotional activities is very







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LO4 Understand the marketing cycle in a services industry environment

4.1 Discuss the relevance of market research to services industry operations

Figure 3 Market research process

(Source: The Market Research Process, n.d)

Proper and planned market research plays a key role in understanding the services

offered by rival hotel firms. It also acts as a source of innovation towards introduction of new

service offerings and bringing changes in the existing ones. This is usually carried out in the

hotel industry by use of market information system which plays a key role in collecting

information about prices and other aspects. It also helps to analyze the current market

demand and helps in proper forecasting. The market research process plays a distinct role in

this regard that involves collection as well as analysis of data so as to come at conclusions

and make proper evaluations (Palmer and Hartley, 2009).

Various hotels including Marriott hotel has understood this concept which is

performed at corporate level via corporate marketing services. The goal is to provide for

better management of different services in the hotel and to develop a better understanding

about market as well as the consumers. It has also helped in positioning of its services via

demand forecasting. It has been used as a quality tool by the hotel so as to influence the

perception of consumers towards various products and services (Burkard, 2011).

4.2 Undertake market research for an appropriate product or service






A market research can be carried out in order to find out the response of consumers

towards the new fusion menu introduced by Marriott hotel to lure consumers from all over

the globe. The selection of location was outlets spread all over United Kingdom. Primary

research method can be undertaken on consumers of hotel by conducting interview sessions

open as well as close ended questionnaire. This will help to receive feedbacks by use of two

way communication. On the other hand, the secondary research can be carried out by using

internal records in form of government publications, industry journals and other articles

published in newspapers. Data will be analyzed by use of pie charts and bar graphs prepared

from the answers given by respondents which was further evaluated to find out whether the

fusion varieties are matching the tastes of consumers or not (Wild and Diggines, 2010).

4.3 analyse the suitability of different media for marketing an appropriate product or service

Various forms of media are used by hotel in UK so as to achieve outstanding results

in their marketing efforts. These are usually in form of TV, print media like newspaper and

magazines, radio, visual sources like bill boards and posters. The use of these sources varies

from service, product and market under consideration. For example if Marriott hotel wants to

appeal to global audience then it will have to prefer internet based media which is used all

over the globe. Use of print media in form of newspaper and magazine may not teach Indian

or Australian consumers. If the firm wishes to promote its new website launch then the best

way would be by internet as compared to radio (Capon, 2009).

4.4 Evaluate the implementation of the marketing plan for an appropriate product or service







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References Books and Journal articles

Benson, A. M., Tilbury, J. and Wickens, E., 2012. Sustainable Tourism Management and Marketing. Journal of Hospitality Marketing & Management. 21(7). pp.703- 709.

Burkard, N., 2011. Market Segmentation and Branding in the Hotel Industry with Special References to Hilton Cooperation. GRIN Verlag.

Capon, C., 2009. Understanding the business environment. 3 ed. Harlow: Prentice Hall. rd

Palmer, A., and Hartley, B., 2009. The Business Environment. Berkshire: McGraw-Hill Education.

Tribe, J., 2012. The Economics of Recreation, Leisure and Tourism. 3 ed. Routledge. rd

Web, R. J., 2002. Understanding and Designing Market Research. Cengage Learning EMEA.

Wild, J., and Diggines, C., 2010. Marketing Research. Juta and Company Ltd.

Williams, A., 2012. Understanding the Hospitality Consumer. Taylor & Francis.

Online articles

Bhasin, <http://www.marketing91.com/tag/marketing-theories/>. [Accessed on 21 2013].

H., 2011. Marketing Myopia. [Online]. Available through: st

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< http://www.brighthubpm.com/project-planning/51754-components-of-a- st January 2013].

Enhance booking volumes with Hotel Online. 2013. [Online]. Available through:

<http://hotelzon.com/en/uk/service-offerings/hotels-and-venues>. [Accessed on 21 January 2013].

st

Holiday <http://www.holidayinn.com/hotels/us/en/london/lonrp/hoteldetail>. [Accessed on January 2013].

Inn. 2012. [Online]. Available through: st 21

Hotel Marketing Competitive strategies. 2012. [Online]. Available through: st

<http://hotelmule.com/management/html/79/n-2179-15.html>. [Accessed on 21 January

2013]. IHG to reduce environmental impact. 2009. [Online]. 29

<http://www.ihgplc.com/index.asp?PageID=116&NewsID=2202>. [Accessed on 21 January 2013].

th

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st






Porter, M. E., 2008. The Five Competitive Forces That Shape Strategy. [Online]. Available

through: [Accessed on 21 January 2013].

<http://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/ar/1>. st

The Market Research Process . n.d. [Online]. Available through: <http://www.guide-market- research.com>. [Accessed on 21 st January 2013].

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