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Unit 8 Marketing Environment in Hospitality Assignment
Marketing plays a crucial role in the success of any business. Similarly, marketing also plays a significant role in driving hospitality industry. This Unit 8 Marketing Environment in Hospitality Assignment describes the concepts of marketing in a service industry and how the concept should be implemented (Kotler, Bowen & Makens, 2006). The paper also describes the role of marketing mix, what are its elements, place and pricing. In addition to this how promotional activities are helpful to business and what role is played by marketing cycle in a service industry environment is well explained by this paper. As part of the study, operations of Hotel Sheraton will also be reviewed.
1.1 Discuss concepts of marketing for a relevant services industry
Marketing can be defined as a set protocol for building customer relationships, communicating and delivering value to customers in a way that it benefits the organization and its stakeholders. In this section, marketing strategies of Hotel Sheraton will be reviewed. Marketing in hospitality industry is different as the hospitality industry deals with tangible objects like a bed, food, ambience, and service etc. In order to use the tool of marketing in an efficient manner the profitability of an organization and needs of customers should be integrated. The focus of marketing in Hotel Sheraton is on customer’s needs, demands and wants. After considering the customer’s needs the next focus is on enhancing the revenue of an organization (Ayala, Staros and West, 1996). Therefore, integrated marketing is a combined effort of all personnel within a company.
Before starting with the marketing concept, it is important for the management team to analyse the persisting marketing culture in the market and then embeds unique concept for their marketing campaigns. Hotel Sheraton is a hospitality organization that uses the concept of integrated marketing. Hotel Sheraton clearly depicts that the organization aims to generate higher revenues by placing its guests’ needs on the top priority and the organization has shown a significant growth in terms of revenues by using this concept. The success of organization is also dependent on the service-oriented attitude of all its employees that is very crucial in a service industry (Morrison, 2002 c).
1.2 Assess the impact of the marketing environment on the industry
Marketing environment is a crucial player in deciding the success or failure of a marketing plan of an organization. Hotel Sheraton operates in a micro and macro environment that keeps in changing on a constant rate. This change either creates opportunities or threats to the business holders. Therefore, it is recommend that management team of Hotel Sheraton should closely analyse these micro and macro environmental factors before deciding their marketing strategies (Morrison, 2002 a). Coordinating with suppliers, arranging finance, analysing competitors, attracting customers are some micro environmental factors and synchronizing these factors with the organization helps in smooth execution of business operations of an organization.
Analysing demographic like estimating population size, age, density, structure, occupation, and gender ratio should be done at initial step as it helps in detecting price competitions. Focusing on economic factors like disposable income, current interest rate, GDP, and consumption pattern is also important as it directly affects the business operations. Political factors like tax policies, patents, stability of government should be considered as operating according to the laws and regulation may be a tough task for the organization. Technological factors like new product, applications, software upgrades should be check in a regular interval of time. Social factors like lifestyles of people, family size, capacity of people, and awareness among people must be focused in order to develop an effective marketing strategy for the particular organization (Burns & Bush, 2003).
1.3 Evaluate the relevance of consumer markets in the industry
The aim of marketing for Hotel Sheraton is to anticipate, meet and satisfy the needs of customers and therefore it is essential for hospitality marketers to identify their target customers and their buying nature. The individuals who buy hospitality service for their personnel utilization are termed as end users of the service and this group is termed as consumer market. There are various factors that influence the purchase decision of end consumer and many times organisations fail in recognizing these factors and how these factors can influence the buying decisions of the consumer market.
The marketing team at Hotel Sheraton can review the case study of Starbucks which faced an issue in establishing a chain in China, as Chinese people did not welcome the company. The people thought that the presence of such companies is a sign of increasing influence of Western culture in their country. This situation arises due to the lack of understanding by the company of the Chinese tradition. If organizations keep a better understanding of present and future needs of their consumers these situations can be easily avoided. Therefore, for the marketing team in Sheraton; understanding consumer market will help in making effective marketing planning for service industry (Reid & Boinaic, 2006).
1.4 Discuss the rationale for developing different market segments
Before entering into any market service industries must segment their market in order to target their audience in a much efficient manner. Market segmentation is defined as dividing the overall market in smaller groups that consist of customers who have some similarities in their choices. By analysing the needs of these small groups, Sheraton can frame their marketing strategies while considering the needs of each group. This segmentation helps in recognizing the group that possess the disposition to purchase their services and products so that their marketing strategies can be more aligned towards this particular group and can work in a more efficient manner (Morrison, 2002 c).
The segmentation can be done on the basis of demographics in which customers are divided on the basis of age, gender, income, family size and occupation, on the basis of geographies the group is divided on the basis of nation, states, regions and cities, and on the same behaviour of customers the group can be divided on their attitude, response, use and knowledge. Market segment thus is useful to understand the structure of market condition (Ayala, Staros and West, 1996).
3.1 Evaluate the role of the promotional mix
Promotional mix is the accumulation of all the efforts taken by the seller to ensure that the product reaches the consumer. When it comes to promotional mix, the entire pool of hotel owners have adopted different proven as well as innovative ideas in accordance to their changing strategies. For instance, the Hotel Sheraton has come up with the fusion plan for those who always try to experiment clubbing of different styles of room and food. As a result of the risk taken by the Sheraton, the revenue has increased many folds by the London Olympics 2012. Another good example will be the Holiday Inn which resorted to the online campaigns and the incomes were satisfactory (Walker, 2009).
It is obvious that the commodities made by the hotels are deemed to be waste with a certain period of no usage. They cannot be reused or sent to a different market region. Say for example Wal-Mart, which shifts the stock it, has in surplus to other branches where demand is more. This puts the marketing department in a further more difficulty of choosing wisely and adapting to the varied needs of the consumer and also to save the hotel from wasting the resources due to misinterpretation of the need existing in the market taken under consideration (Reid and Bojanic, 2006 a). While forming the strategy, the marketing department of the hotel must bear in mind the demands of the local client base and also the marketing methods that are feasible with the available man power and capital the hotel is willing to inject for marketing.
Mode of delivering the services and products to the client also matters more to the overall growth of the hotel. That is why the marketing strategy should be tested within a controlled environment and then the branding and conceptualization should be sketched and analysed. Place refers to the way and the method by which the customers receive the services offered by the hotel. The factors influencing the above terminology are proper delivery, ease of access, prompt service and consumer convenience (Walker, 2009). These should be ensured that they are always kept above the benchmark set by the rival industries.
The factors currently under play for setting the benchmark for quality of hotel services can be analysed with examples. Many hotels in the United Kingdom have resorted to online booking systems. This gives foreign consumers to get the peace of mind that a place of stay is guaranteed for them as soon as they arrive. These features made way to increase the foreign tourism and income to multiply in the hotels in the United Kingdom. Technology has played an important role in all industries and the hotel industry is no exception. Shipping and logistics of services through top notch technology has resulted in the addition of superior customer satisfaction in a short span of time which builds up the reputation of the hotel.
3.2 Plan an advertising campaign for a services industry operation
A systematic approach is needed for effective marketing and hence the need for a diverse as well as “focussed on the need” type of advertising is required. Sheraton hotel has opened up a new restaurant. For planning an advertising campaign for the restaurant Sheraton hotel, few of the well established, tried and tested methods of advertising campaigning will be used and utmost care is taken to design the campaign in such a way that even if the current advertising strategy fails, changes can be entertained in the existing model itself.
- Transportation sector capture.
- Local area coverage.
- Technology-based advertising.
- Benefits without compromising profit.
Transportation is the one department that has been going hand in hand for ages together with hotels. Transportation sector must be well informed of the hotel facilities so that advertising in the transportation sector will be the most effective.
Local area coverage is the terminology used to refer a stronghold in the local market. Connelly states in his book “know your customer” that “if you don’t succeed in gaining the local crowd, you won’t be getting any client at all even from any other planet.
Affiliate sales are the most rising trend in advertising. Symbiosis or mutual benefit advertising are the most fruitful trend of advertising and can be most helpful in long term investment (Reid and Bojanic, 2006 a)
Technology based advertising is the adaptability policy of a hotel. It was estimated that over 83.45% of the hotel room bookings for the FIFA world cup was made through online booking. So the hotel should have a good search engine optimization and also online booking facilities with other facilities like payments.
Benefits without compromising profits are the strategy followed when it comes to getting past the competitors. A common way of this strategy is increasing the basic rate and holding an offer and showing off the original price is the most common trick that works every single time.
Media Coverage has several options like print media, television, social media etc. Opting for television can be very expensive and should be done if the organization is targeting the upper class of the society and is launching the service in multiple cities. Besides television the advertisement should be printed in the newspapers on first or last page, as these are the pages that people go through often. In addition to the print medium and televisions, Internet should not be neglected and online marketing should be done in an effective manner in order to attract more target audience. Social media platforms play a significant role in advertisement campaigns and must be used to showcase the new service of the hotel in order to grab the attention of people who missed the advertisement in newspapers and television (Ayala, Staros and West, 1996).
3.3 Analyze the role that sales promotion and public relations play in promotional efforts
An organization by using different tactics in their promotional mix clearly depicts the organizations’ communication objectives. New companies in the market use promotion mix to make people aware about their presence. After establishment of an organization in the market, much of promotion focuses on creating awareness about the benefits and value to the target audience. Sales promotion is done after a loyal relationship has been established by the organization with their target customers. Promotion mix maintains its focus on long term communication while sales promotion can be defined as particular strategy that is used when an organization is aiming to generate instant traffic or profit (Morrison, 2002 a).
This is common in hotel industry where the competition is growing day by day or in industries where they are constantly aiming to lure their target customers. Sometimes overuse of sales promotion can restrain profit that an organizations can earn through by being patient with their prices. Public relations are established from activities that are performed by hospitality or other service industry for which they are not paid directly (Morrison, 2002 c). The sole purpose of establishing good public relations is to have a smooth relationship with the stakeholders of the organization. It is different from selling and usually a direct sale is not associated with public relation activities, but it imposes a long-term impact. Hotels usually keep a close relation with press reporters and invite them often in order to introduce a new product or campaign and these writers can present the new launch in an effective manner.
Marketing is the nerve of hospitality industry and any other service industry; therefore the management team of organizations should frame their marketing strategies after analysing the above stated features appropriately. If organizations are aiming to achieve desired results in a fixed time span then marketing strategies should be effective and must possess a blend of needs of the customers (Ayala, Staros and West, 1996). The above stated factors will help hospitality organizations in framing their marketing strategy for their target audience and will assist in entering into a new market.
Ayala, G., Staros, E. & West, J. (1996). Marketing quality in the hotel sector. In M. Olsen, R. Teare, & E. Gummesson (Eds.) Service quality in hospitality organizations, New York: Cassell.
Burns, A. & Bush, R. (2003). Introduction to marketing research. In Marketing Research, New Jersey: Prentice Hall.