Project code: 9585 Date of allotment: 03 August 2012 Date of completion: 04 August 2012 Report Word limit/Words Covered:

4500/ 4406 Research Report Title: Hospitality and Tourism Marketing Strategies

Contents
1. Marketing strategies For Hospitality and Tourism organizations ................................................. 1 1.1 1.2 Marketing strategies in hospitality and Tourism sector ................................................................ 1 Role of Network and Customer Relationship marketing strategies for hospitality or tourism

organizations ............................................................................................................................................. 3 1.3 2. Customer loyalty strategies for Hospitality and Tourism organization ........................................ 5

Marketing communication strategies for Hospitality and Tourism organization ........................ 7 2.1 2.2 Use of Marketing Communication to develop Brand ................................................................... 8 Effectiveness of E-marketing, Guerilla marketing and viral marketing strategies within

Hospitality and Tourism organization....................................................................................................... 9 2.3 Recommendations for Marketing Communications Strategies ................................................... 13

References ................................................................................................................................................... 14

1. Marketing strategies For Hospitality and Tourism organizations

Drastic change in the Hospitality and Tourism industry can be noticed from the past few years (Hospitality, n.d). Earlier, Brand name of the Hotel was the only source of marketing, but due to change in technology and education, companies have adopted different strategies to market themselves (Indian Travel, Tourism and Hospitality Industry, n.d). Today, these strategies are based on differentiation, satisfaction to the customers, delivering quality product and services, uniformity and reliability. Development and innovation in technology has persuaded hotel owners to exercise different ways in order to operate and manage their activities. 1.1 Marketing strategies in hospitality and Tourism sector Marketing strategy is defined as a process that is used to achieve pre-determined goals and objectives of an organization. They also help in realizing the vision and mission of the company. Being a wider concept, it answers many questions such as: where the business wants to go, which market is suitable for the company, where to compete, what the right direction is and how an organization can perform its task efficiently and effectively (Kotler, 2008). It includes many elements and concepts that help a Hospitality and Tourism organization to capture a potential share in the market. Some of the concepts are discussed below: Product positioning In order to present the product and services in front of the customers, product positioning technique is being used. It is related with the market segmentation (Tinson, 2004). This can also be explained as how the customers perceive the product of the company. Positioning is type of marketing concept through which marketers try to build a good image and reputation of the company in the minds of potential customers. For a Hospitality industry, positioning is considered as an important strategy. Organization will be able to sustain and achieve competitive advantage by the use of these strategies (Petzer, Steyn, and Mostert, 2008). There are many positioning criteria available for the hotels, on the basis of which they can compete, like they can promote specific features of their product, benefits and needs, usage occasions etc. Other than the above criteria, they can also position on the basis of culture or symbol, price, quality and competitor.
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 Product differentiation This is a process by which the companies position its product and services different from that of its competitors. Hotels place themselves by better amenities and ambience, than those offered by other hotel in that particular area or region (Mowen, n.d). Brand and customer Segmentation Generally, Hotel industry segments their market by economy, mid-scale, upscale and luxury hotels. Brand segmentation refers to the process of creating separate brand of the hotel on the basis of certain standards and rules. It also helps in building brand loyalty by offering good ambience and amenities. Customers can also be segmented on the basis of their characteristics, culture or sub-culture and geography. Marketing mix development It involves coordination of the activities concerning the product, pricing, promotion and distribution. Product is considered as the main offering of an organization. It fulfils the needs and wants of the customers. If the product offered by the company fails, then everything will fail. For Hospitality industry, Product involves rooms, reception, entertainment, logging, boarding, services and personal care (Vora, 2010). By offering different and unique product to the customers, company can achieve a competitive advantage. In order to successfully market themselves, company may use many promotional tools like advertisement, personal selling, sales promotion, word of mouth publicity and public relation (Tools for promotion, n.d). Public relation is a process of that flow information between an organization and public. It is important tool in case of a Hospitality industry (Public relations, n.d). Pricing strategies depends upon the various internal and external factors. For hotels, pricing related to room tariffs, food and Beverage department and various different functions should be determined by considering all the aspects of the business (Oxenfeldt, 1982). E-mail marketing strategy In this type of strategy, at the time of booking an authentication email is sent to the customers. It helps the consumer by providing access to the relevant information through internet. Further bookings and reservations can also be possible by using email accounts. Adopting this
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marketing strategy, company can induce more customers to visit their hotel. It also helps in improving mutual relationship between an organization and customer. Social media marketing By using this strategy company can make or provide regular updates on twitter, face book or any other social media networking sites. This sites aware mass public by providing information related to several dishes it offers in particular season, quality of services, product features etc. Social media marketing also bring up to date records of various personalities who visit the hotel. Public relation These strategies are being used to provide an exposure to company in front of the public. Through public relation information can be communicated between an organization and its customers. It is also used to convince the spectators to have a particular image of the business in their minds. The ultimate and foremost objective of this marketing strategy is to attract and retain customers, shareholders, investors, suppliers, government and all other stakeholders to develop a positive perspective in relation to organization and its products or services. Good relationship between organization and its customers helps in creating and developing an understanding between them (LEtang, 2007). Many hotels like InterContinental Hotels use this strategy to plead to the apprehensive parties. Some of the functions performed by this public relation marketing strategies are elaborated below: a. Develop relationships between the organization and public. b. Evaluate perception, attitude, beliefs and interest of the public. 1.2 Role of Network and Customer Relationship marketing strategies for hospitality or tourism organizations Relationship marketing is defined as a set of processes and functions for communicating, developing and managing customer relationship in such a way that benefits both to the organization and all its stakeholders (Palmatier, n.d). Network and relationship marketing plays a major role in Hotel industry. It encourages an organization to form or develop healthy and cordial relationship with the guests, customers, suppliers, peers and other stakeholders. By mounting relationship, hotels can
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maintain loyalty of their stakeholders for the business. In order to start Relationship marketing, vary first thing is to build quality network. For this, customers should be served first by the company. By analyzing the needs and wants of the guest, goals of the firm can be achieved (How Relationship Marketing Will Increase Hotel Occupancy, 2012). Importance of network and relationship marketing Since, the relationship marketing can be applied to product as well as services in the consumer and business market, it is of great importance. It helps in acquisition and retention of the customers. As it is very cost-effective for the company to retain its existing customers than to acquire new ones, so it is also being used as a customer retention strategy. Relationship marketing also plays a significant role in competitive marketing strategy (Kanagal, n.d). By using this technique company can increase their occupancy level and thus achieve competitive edge over the other rivalry firms. Levels of Relationship Marketing Relationship marketing includes three levels. The first level of this marketing involves price enticement in order to secure customer loyalty. By offering discounts and premiums, company can motivate people toward them (Relationship marketing for competitive advantage, 2010). The second level of relationship marketing engage in developing social bond between the customers by taking help of personalization and customization of relationship. And the last but not the least level, focus its attention on providing solutions to the problems related to customers. Important elements of relationship marketing: Focussing on inputs and outcomes To manage and maintain relationship effectively, there is a need to pay attention on the elements of the process. These components can be categorised as input and outputs in the process of relationship marketing (Buttle, 1996). To develop relationship, it is very important to interact and listen to the consumers needs and problems. Through this process of interaction, company can know the specifications of the product and services desired by the potential customers and

by meeting their needs they can achieve loyalty. The result of this network should be long term and must provide benefits to both the customers and organization. Strategic Customer Relations The Survival of each and every organization depends upon its relationship with all stakeholders in the market. If there is harmonious and positive relations, than business will flourish and vice-versa. So, keeping this in mind it becomes very imperative for almost all types of companies to manage healthy relations and network with the customers. When we talk about Hospitality industry, customer relationship management becomes very essential (What is CRM, n.d). It helps in attracting new customers to the company and retains the existing ones. CRM system helps the Hotel industry to have all the relevant information about the customers through its database, know about customers preference and can understand the perception of an individual in regards to the company. At the time of recruiting workforce for providing services to customer, various factors should be kept in mind by the management such as technical competence, functional expertise, knowledge in relation to specific field, interpersonal skills etc. Lack in any such qualities can create bad impression in front of the client. Increase in the consumer relationship will help in generating more loyal guests for the business. In order to gain loyalty, organization should understand the desire and wants of the customers. This can be achieved only through good and healthy customer relations. 1.3 Customer loyalty strategies for Hospitality and Tourism organization Cost of acquiring a new customer is often regarded as more than that of retaining an existing one. Thus, organizations across industries try to adopt effective loyalty strategy which can help them in building loyalty and maintaining long term relationship with the customers. In Hospitality and Tourism industry, service quality plays a imperative role. Employees and quality of services are the main basis of differentiation and competitive advantage in hospitality industry. There exists direct and positive relationship between effective and skilful employees and service quality of the company (Price, 2007). Various customer loyalty schemes which are practiced by organizations in order to retain customers are elaborated below:
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 Reward loyal customers with coupons Pivot of customer loyalty program lies on building relationship with the customers. Gifts and discounts play a very important role in this process (Borchert, 2011). By providing discounts coupons and gifts company can attract and retain new customers. This program compels an individual to visit the hotels again and again. Brand flag Flag or standard depends upon the number of different potential customers of the hotel. It must be based on the target market as well as on the product and services offered by an organization. Matching the specification of customers will lead to build loyalty in the minds of the customers (Sullivan, 2004). Frills and discounts for regular customers By offering accompaniments and discounts, company can persuade its sales and occupancy. People will love to come repeatedly on such places where they are benefited both by price and quality. This technique act as a motivational tool for the customers. Loyalty programs Many loyalty programs are conducted by organization to induce customers. Such program includes value added options, membership for premium customers and discount and accrual programs on the basis of quantity purchased (5 Essential Customer Retention Strategies, n.d). Outstanding customer service Service quality plays a very important role in Hospitality and tourism organization. Customers will like to visit to those Hotels which provide better quality food and services. So, for each and every company wishing to have loyal customers, need to improve their level of quality in services as well as in their offerings. Delivering the promises Customer will be loyal towards an organization, if the company is capable of satisfying the needs and wants of their clientele. Guest will be amazed only when firm delivers to them, what they have promised earlier. So abiding by the promise to deliver good services and products, must be fulfilled by an organization. Civility - This is of great importance in Hospitality and Tourism organization. Interpersonal skills of all the staff members should be proper. They must be capable enough to express their views in a better way in front of the guests. To
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improve the interpersonal skills of the hotel staff, company can provide training to them, so that they can present themselves effectively. The top level managers of the company should communicate in proper manner and courtesy with their group and should also act as a coach for them. Definite and specific standards of communication should be made in every organization. All the members of the company are supposed to abide and follow those standard phrases while interacting with the customers. They must not go beyond those principles whether communicating on phone or face to face. By adopting this process, workers of the hotel will be efficient in interacting with the guests. They will have pleasurable and warm style. All these strategies help in reinforcing the cord of relationship with the customers.

2. Marketing communication strategies for Hospitality and Tourism organization

Marketing communication is defined as a process in which all the activities undertaken inform and influence the purchase decisions of the potential customers. It also helps in developing brand awareness among all the consumers (Richards, n.d). For Hospitality and Tourism organizations, marketing communication plays a very important role. Many benefits can be availed by hotels using different strategies of communication. A right and appropriate marketing communication strategy chosen by the company, ensure to make use of one or more components in order to circulate message of the firm. Conveying benefits of the product becomes easy and accurate by appropriate strategy in the market (Greene, n.d). To increase the sales of product and services, it is very essential to make all the people aware about the brand or product. This can be done by using many different marketing communication tools such as advertising, public relation, Emarketing, direct marketing, E-mail, event sponsorship and many more (Allen, 2009). If an organization successfully select the best and right marketing program for communicating its services and product, than they can easily enhance the level of sales. Following marketing communication strategies can be used to develop brand: Corporate identity: Organization can also use corporate identities or celebritys to promote their sales. Many hotels like InterContinental Hotels Group and Hyatt

international are witnessing the influx of many renowned personalities in their Hotels. This is a priceless service given by the company to its patrons. Internal communication: In order to build brand loyalty, Communicating with the internal stakeholders like employees and staff also plays a significant role. Employer branding is considered as a best attraction and retention strategy. It is defined as making an organization a best and suitable place to work in. For gaining good impression in the minds of the customers, need of talented workforce is also indispensible (Rosethorn, 2009). Sponsorship support: Now a days, Sponsoring an event and activities by eminent companies have become the most popular marketing tool. This helps in developing and creating good brand image of the company. Many Hotels and travel agencies are sponsoring events such as cricket matches, parties and F1 races. It helps in formulating a positive impression in the intellect of all the potential customers. 2.1 Use of Marketing Communication to develop Brand Marketing communication program plays a significant role in developing or building brand equity. These programs can be in relation with the product, price or channels of distribution (Integrating Marketing Communication to Build Brand Equity, 2008). In order to create brand awareness and equity, use of such programs is impartial. Brand refers to name, sign, symbol and logo which can be identified by the customers easily from one seller to another (Brand, 1999). With the help of brand, differentiation of the product and services from those of competitors can also be done. This brand can be created by using marketing communication. The most popular form among them is advertising. It is very essential for each and every business to adopt marketing communication program because it helps in ascertaining the point of similarity and difference with competition. These strategies can also be used to make a good impression of the brand in the minds of customers and thereby, develops strong consumer on the basis of brand equity (Aaker, 1997). Long term relationship with stakeholders can also be maintained, If the company has well built brand equity. Marketing communication also helps in organizing the four Ps of marketing mix that is price, product, promotion and place. An integrated plan communicates
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complete and proper message to the customers (Frenz, n.d). When some positive message or information constantly revolves around the consumers, a sense of awareness in built. And these responsiveness results in making purchases decisions and loyalty for the brand. This is popularly known as word-of mouth advertising and is considered as an important tool for marketing communication. The above process of planning and implementing integrated communication is known as integrated marketing communication. 2.2 Effectiveness of E-marketing, Guerilla marketing and viral marketing strategies within Hospitality and Tourism organization In Hospitality and Tourism organization, marketing is becoming very important. Many corporate giants have entered in this sector because of which competition increased substantially. For sustaining a place in the market, each and every company needs to deliver quality goods and services which satisfy needs of the customers (Advanced Marketing for Hospitality and Tourism, n.d). This can be identified with the help of various marketing concepts, some such are explained below: E-Marketing In todays business world, the use of internet has become a major practice in conducting its operations. Internet provides free exchange of information from one place to another in just a few seconds (Napier, et.al, 2001). E-marketing refers to the process of directly marketing the message and information commercially to the group of people by making use of e-mails (Emarketing, n.d). It helps business by providing customized and easy forms of marketing. It can be used for many different purposes such as promotion of product, newsletter, invitation for an event, marketing campaigns and query response etc. It is very convenient, cost effective and target large groups of customers. Increase in technological advancement has resulted in utilization of internet in almost all businesses. Each and every organization is turning towards internet, considering it as their preferred choice of marketing channel. Internet has also imposed many impacts on the Hospitality and Tourism sector. Most of the Hotels are adopting social networks such as face book, twitter as a means to communicate information and brand awareness among all the

potential customers (What is E-Marketing and how is it better than traditional marketing, 1999). Application of internet in the Hospitality and Tourism organization helps in facilitating communication between the company and its potential customers. Guest can easily get information regarding the offers and prices (Dotcom, n.d). Online reservations can also be possible without wasting much of the time. If an organization successfully develops E-marketing, than information related to the latest trends can be transmitted timely to the Hotel mangers. There exists a positive relationship between the development of E-marketing and business of hospitality industry (Pilepic, Petkovic, and Perisic, 2010). Company can also achieve competitive advantage by using E-marketing as a communication tool. Many benefits can be availed by Hotel industry from this marketing communication strategy like reduction in the cost, response can be possible faster from marketers, increase in interaction, low risk and global accessibility (Advantages & Disadvantages of e-Marketing, n.d). Role of E-marketing in Hospitality industry: E-marketing plays a vital role in Hospitality and tourism organization. It has been extensively being used in online booking. For booking hotel rooms and other elements of travel, agents widely use internet. E-marketing or internet is also being used as marketing tool. Hotel can make use of attractive design for websites to attract more customers or guests (Strategic E-Marketing, n.d).

Employment and recruitment can also be possible in the Hospitality industry by using internet (The Role of Internet in the Hospitality Industry, n.d). So, to conclude we can say that emergence of internet has drastically changed the operational system of the Hospitality and Tourism organization. Advantages of using E-marketing: Organization can have Many advantages by using this strategy for communicating and promoting its product and services in the market and some of them are: easy understanding of offers by audience, increase in sales, valuable feedback

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from the customers can be gained, attention can be garbed by using graphics in campaigns etc. Guerrilla Marketing Guerrilla marketing is defined as an advertising strategy which uses low cost and eccentric means in order to promote the product and services of the company. The term Guerrilla marketing was developed as an unusual system of promotion that depends on time and energy (Guerrilla Marketing, n.d). It does not rely on heavy marketing budget. Campaigns of this type of marketing are interactive in nature, unexpected and target its potential customers at those places which are not expected by them. The ultimate aim of this type of strategy is to develop and create unique provoking concept so as to produce drone in the minds of the consumers. Guerrilla marketing refers to the process in which different and uncommon ways is being used for approaching budding customers. This marketing tool is considered as very cost effective method. It was initially targeted by the small business organization, but after sometime it was even adopted by big corporations for their own benefit. In Guerrilla marketing strategy, Social media can also be used in an effective manner. Mangers can ask all guests and customers who visited in Hotel to share their experiences and this information can be posted on You Tube or Face book pages (Ingram, n.d). There are many factors which states about Guerrilla marketing. This strategy generally target small and imminent firms on the basis of time and creative marketing. Using innovative technology and different tools for campaigns, helps in building new border. So, for a hotel business which has sound capital structure but less brand superiority, guerrilla marketing strategy is a best option. This is because of the fact that big companies can afford more risk in comparison to smaller firms or business. For enhancing Guerrilla marketing successfully, company can also offer wide range of products and services. This will help in impelling the customers of competitor brand to switch over towards them (Buhalis and Law, 2008). Effects of Guerrilla Marketing on Brand Equity: Brand equity of an organization can be affected by Guerrilla marketing. There is long lasting
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effect of this strategy on equity of company. This can be divided in to three parts: positive effects, neutral effects and negative effects. Guerrilla marketing strategy has positive effect on the brand equity of the firm. If the strategies are done effectively, creatively and correctly than customer will impress with the companys product and the value of brand increase. Sometimes, marketing campaigns and guerrilla marketing strategies does not successfully aware customers regarding the product and services of the company and thus, does not impose much impact on the consumers. Since, guerrilla marketing is mostly dependent on surprise; there is more likely chance of backlash of campaign. Viral marketing Viral Marketing is defined as that marketing technique and communication strategy which includes passing on messages to others or to the customers that share information with their known one, who in turn convey to their known contact. It has been named viral marketing because as virus spreads to all those who come in contact with the affected person, similarly marketing information spread like virus. This type of marketing can also be termed as digital word of mouth marketing technique. If any productive or lucrative deal come across in the knowledge of an individual, than he will definitely convey to his friends and relatives. By this way, the news and message will spread like grapevine (Ingram, n.d). Elements of Viral marketing strategies: There are basically six elements in viral marketing strategies. All these components must be present in this type of marketing. These elements are: giving away valuable product and services to attract customers attention, effortless transfer of message to others, spreads from small to large, use of existing communication networks, take advantage of other resources and finally, it exploits common motivation and behaviour (Wilson, 2012). For Hospitality industry, viral marketing is considered to be the best suited strategy because most part of the target audience is already online, engage the customers to revolve around their passions such as travel, parties, luxury and bargain hunting. It can be used in these sectors
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by supplementing the existing membership programs, promotion of new and exclusive product or services, monitoring attitudes and beliefs of customers and by expanding the reach of the brand. Viral marketing strategy also helps Hospitality and tourism organization by helping in achieving the short term objectives of the company. This marketing technique enables an organization to remain optimistic in their competitive market. 2.3 Recommendations for Marketing Communications Strategies For hospitality industry, there are many marketing communication strategy that can be adopted by an organization. This can be used to promote and aware all its customers regarding services and products offered by them. In order to increase the revenue of the firm, an appropriate mix of strategies is required. Different strategies such as online marketing, Relationship marketing, corporate social responsibility system, social media marketing is recommended for hospitality organization. In todays scenario, each and every person is busy and in rush, because of that they prefer only those things that saves much of their time valuable time. For such type of consumers, online reservations and alterations is considered as a boon. Another marketing communication strategy for hotel industry that is important is building effective public relations by announcing at press conferences and press releases (Morris and Goldsworthy, 2008). Customers always want to relate themselves to those organizations that have strong and sequential core values. Abiding by the rules and regulations and social responsibility can also be an effective communication tool (Zarrella, 2009). Hospitality and Tourism organization should also adopt marketing strategies in relation to differentiation, retention of customers, consistency and customer satisfaction. They should use electronic word of mouth as their potential strategy to promote and market themselves.

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