Marketing strategy in the hospitality industry
Category : Marketing Strategies
International Hospitality Marketing
Also known as the value of providing and offering services to people wholeheartedly as well as treating them essentially, hospitality has been recognised as a business with desirable and favourable behaviour in terms of dealing with others, be it within the community or among neighbouring nations. Accordingly, , the practice of being hospitable is not only applicable in entertaining and making people feel relaxed. In most corporationes as well as corporations, specificly in tourism, hospitality marketing has been a valuable means of maximising the return on investment.
While some major corporationes have not yet familiarise themselves or applied hospitality marketing, diverse industries, other than those related to tourism, have already made use of hospitality as a means of motivating and retaining clients or staffs effective and proficiently.
Hospitality business is among the fastest developing and improving economic industries in the global market. Consequently, the hospitality business by itself is recognised as multi-billion dollar and still progressing industry (Flora, 1998). While this industry enables the provision of vast services for the clients, work opportunities are also diverse. Indeed, the provisions of the industry for the clients are as unlimited as its opportunities for staffs. People are able to work is diverse areas of interest while still be in a job within the industry. At present, more workers are employed in service provision than in manufacturing, indicating the continuous growth of the hospitality business. In fact, about eight out of ten workers in the United States are in diverse sectors of the service industry including education, entertainment, retail, transportation and health care. In the United States, seventy percent of the country’s gross national product is covered by service industries. By 2012, it is expected that this percentage will increase to ninety percent (Microsoft Encarta Online, 2004). Likewise, hospitality business is among the major economic forces in the UK as its enables growth and creation of job opportunities. According to the British Hospitality Association (2002), the corporation has employed over 1.8 million workers who were distributed within 300,000 hospitality establishments, totalling to revenue generation of more than £64 billion. From these records, hospitality has indeed become one of the most competitive corporationes in the global market.
Conventionally speaking, the hospitality corporation is considered as one of the oldest industries there is. This is because, long before the use of the term hospitality marketing, people are already travelling for leisure or work purposes; they are already going out to eat or shop. Nonetheless, as the global market continues to change, the hospitality business had started to grow and become more diversified. Considering the accessibility and improvement hospitality services had undergone, the industry indeed has opened itself to newer corporation areas and innovations (Flora, 1998).
Generally, hospitality marketing is a process that involved planning, organising directing and regulating human and material resources. These activities are performed within the restaurant, travel and tourism, lodging, recreational marketing, institutional marketing as well as in meeting and convention planning corporationes. Though separated, these sectors are actually related to hospitality business as they all aim to provide generous and kind services to the clients (Flora, 1998). The hospitality business basically involves hotels and other forms of accommodations, fast food outlets, bars, retail stores, restaurants. These diverse segments of the hospitality business made the corporation grow and finally into a highly competitive global corporation (Rowley et al, 2003, p. 9)
Several corporation and industries have adopted the trend of hospitality marketing principally because corporate entertaining and hospitality is capable of effectively establishing networking opportunities. This trend also enables corporationes to create and strengthen corporation relationships. While, these advantages are valuable and essential to corporationes, an owner may find himself in the midst of disaster as corporate hospitality is capable of causing major damages as well, specificly on corporate reputation.
Marketing approach of Hospitality Industry
Hospitality marketing has been a highly essential concern as it involves all the determinants needed in a business’s marketing mix. It also offers an essential component that corporate marketers are after, and that is to reach the opportunity to get quality time with their clients and prospects. A good corporate hospitality programme is beneficial as it enable the relationship shared between the sponsor and its chief constituencies. Hospitality marketing enables companies to spend time with them away from the stress and pressure of the corporation, establishing an environment that is conducive for corporation transaction (Rocky Mountain News, 2004).
The significance of practicing hospitality in corporationes has been increasing due to the equally increasing cost of client acquisition. More specifically, the cost of acquiring new client cost about four to five times as much as it does to keep acquired clients. Within the corporation, face to face or personal hospitality and entertainment has played an essential role in developing and acquiring client and staff relationships.
Hospitality as a marketing service stands out due to its difference from both manufactured products and services. Products are basically the items that industries create, design, produce and distribute to the consumers. These products may be based from current trends or from more objective marketing researches. In product development, several determinants are to be considered. These include the nature, content, material, processes, packaging and distribution means that will be used for its effective and proficient marketing. Products come in diverse forms like food, drink, appliance and accommodation. Thus, products are generally regarded as tangible items. In the past, the marketing efforts of most companies are concentrated mainly on the selling of these manufactured items (Microsoft Encarta Online, 2004).
Nonetheless, at present, corporationes and industries have learned to prioritise diverse economic goods other than those produced by the manufacturing sector. This is also known as services. Unlike products, services are generally intangible. Service involves performance, action, or effort that a client cannot obtain physically. While both products and services are diverse in terms of tangibility aspects, these corporation terms also have similarities. For instance, both require effective marketing.
The only difference between the application of marketing to both products and service is that in service marketing, physical handling is not involved. Services must also be planned and created with care so as to meet consumers’ needs and demands. The degree of marketing needs for products and services can be stressed through an example. Within temporary personnel field for instance, studies are conducted to be able to identify the types of skills staffs must have or possess. This is because appropriate skills must fit in to diverse fields and geographical locations of the corporation. This makes services difficult to sell in comparison to manufactured products. Thus, promotional campaigns to sell services should be more aggressive than when promoting physical goods (Microsoft Encarta Online, 2004).
Hospitality business on the other hand, is a combination of both product and service provision. Knowing the difference between both corporation terminologies, the hospitality business can then be defined as a spectrum of both tangible and intangible goods. The hospitality business is considered a spectrum as it does not cater to product or service alone; rather it is a combination of both. This is one of the major differences of hospitality marketing from manufactured products and services. While most of the characteristics of service industries are incorporated in hospitality marketing, the addition of the production element further makes this industry a bit more complex.
Hospitality marketing is entirely diverse from products and services alone as it is a combination of both. In addition, there are several other determinants that make hospitality marketing difference from manufacturing or service industries.
The hospitality business calls for the need to provide a suitable environment to be able to deliver hospitable services effective and proficiently. Thus, this means that most hospitality industries must allocate considerable investments in plant and premises. This in turn creates a low variable cost and high fixed cost structure. Taking the hotel in the luxury market as an example, the variable costs for providing room services is minimal, whereas the hotel itself has a high fixed cost. Generally, hospitality corporationes have a quite high financial break-even point. Exceeding this break-even level will naturally result to high revenue. Lower volumes on the other hand will result to considerable corporation losses. This type of cost structure hospitality corporationes apply has implications for pricing decisions. In addition to the cost structure, pricing in hospitality marketing is also challenging as demands tend to fluctuate over time. This is in terms of the type of client as well as the departmental functions. Thus, aside from bringing difficulties in pricing, this tendency makes forecasting difficult as well, making the corporation’ subsequent staff and stock scheduling a challenge.
· Client Satisfaction
One of the most essential elementsfor the hospitality business is the presence of the clients. Without the clients, effective and proficient services of the corporation cannot be delivered. In addition, the hospitality business needs the response of the clients as this will identify the demand pattern of the corporation. The client then serves as the final judge of satisfaction in relation to the quality of the products and services provided. This pattern shifts the focus on total quality marketing and quality assurance.
To be able to reach client satisfaction, the corporation should consider individual client demands and needs. As every client need is diverse from another, customisation is very essential. In applying customisation, two determinants must be taken into account. The first one is to consider whether customisation is plausible based on the services’ characteristics and delivery systems. Second, one must identify the amount of judgement that can be exercised by the client contact personnel in defining the nature of service individual clients receive. This is necessary as some service concepts are standardised while others are able to provide diverse alternatives and options (Spillane, 2001).
According to Mainardi (1980), hospitality marketers are dependent on the contact and the reception they receive from the clients. Thus, hospitality personnel must have a certain degree of availability towards the clients, a considerable margin of initiative and a strong sense personal accountability. In a tourist interaction, staffs in fact serve as a mediator between the clientele and the structure of the industry. This role is very much essential in obtaining the desired results of both the clients and the corporation. In satisfying the wishes of the clients, the ethical and psychological determinants must also be involved among hospitality marketers. There is considerable evidence that clients appreciate actual interaction with people; thus, the treatment clients should receive from service providers must be diverse from what they receive on daily routines.
Indeed, client satisfaction is an essential element of the hospital industry that makes it diverse from manufactured products. Nonetheless, while interpersonal skills are learned from, hospitality and client service programs, the effectiveness and the quality of service provided should go beyond eye contact and warm greetings (Taylor, 2000). The generation of client satisfaction should then be produced out of effort and good rapport. Most people equate client service with personal interaction, while few of them realise the complexity of corporation systems involve in it. Without these helpful systems, the smile or the warm greeting service staffs provide will lead to minimal results.
· Staff Action
As mentioned in the discussion on intensive skill and education requirement, the success of the hospitality business is dependent on the client satisfaction. This is determined through the interaction between the client and the staffs. Aside from providing client satisfaction, the good relations between the service provider and the client give the operation the opportunity to sell its services, resulting to additional revenue generation. In order to effectively deliver the products and services of the business, the majority of the effort must come from the service providers. Hospitality marketing requires the coordinated efforts of various teams of staff, including the operational and support personnel. Attending the needs of an individual client is difficult enough. Responding to numerous clients is a different challenge altogether. With different requirements and needs, multiple clients results to multiple complexities as well. Hence, team effort among staffs of the hospitality business is vital to success.
· Intensive Skills and Education
In addition to pricing difficulties, hospitality marketing is different from manufactured products as it requires intensive preparation in terms of enhancing competency in delivering hospitality services. While efficient marketers and products developers must undergo intensive studies and training to produce a good product, hospitality marketing must possess competency for the provision of both products and services. Thus, the degree of effort and preparation needed is slightly different.
The significance of education in hospitality marketing has long been recognized worldwide. Through proper hospitality marketing education and formal education, skilled human resources are generated. In most countries, various systems and programs are being applied and integrated so as to enhance hospitality marketing education. Preparing competent human resources for hospitality marketing is necessary and is considered a responsibility of the education systems of each country (Christou, 1999).
In order to achieve the goal of generating competent and skilled human resource, the role of formal education must be stressed as significant. Hence, the value of hospitality marketing education in most countries is of crucial significance so as to create proper human resources (Christou, 1999). The pressure of this need adds to the fact that the satisfaction of customers from hospitality services is reliant on the skills of the human resource (Baum, 1995). Mariger and Miller (1999) noted that within the contemporary global business environment, sufficient and proper education is among the major requirement in the tourism business. Furthermore, Partlow and Gregorie (1994) argued that the complexity involved in the tourism business brought about by the consistent tourism marketing needs, industry executive must constantly develop and enhance their knowledge skills. The success of the hospitality industry is then hugely dependent on the development of skills with value-adding factors among its human resource (Baum, 1995).
Hospitality in corporation is an essential aspect as this enables the establishment of interconnectedness of the clients and the operation. Due to the integration of diverse hospitality efforts, corporationes are able to generate additional value and promote client satisfaction and loyalty. Hospitality marketing is indeed a developing and improving industry as evidenced by its huge market segments as well as workforce coverage.
The hospitality business is considering diverse marketing service from manufactured products principally because this type of corporation was able to integrate the provision of both products and services. The efficacy of the industry may be beneficial in pleasing and servicing diverse clients, Nonetheless as this corporation caters to both services and products, mis-marketing may cause numerous difficulties. In addition, the skills needed for providing products and services must be incorporated so as to meet the needs and demands of the clients. Intensive education and training, planning, organising and directing and balancing are among the most essential determinants for the success of the industry.
Without the clients, the hospitality business will not work. In this kind of corporation the role of the clients is valuable as they serve as the source of revenue for the continuous operation of the corporation. In addition, as the clients are directly involved in service delivery, they are responsible for providing the judgment on the quality of service they receive. This judgment is essential in assessing the capability of the corporation as quality service providers. In conclusion, the hospitality business is diverse from manufactured products as it involves not only the mere act of providing and distributing physical item. It also involves the use of interpersonal skills that enhances client value and experience.
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