INDIVIDUAL ASSIGNMENT MOS (SECTORIAL STUDY MODULE VII)

Submitted To: Dr. P.K. Bansal By: NeerajAnand E-25 Mos-4

What is Service Marketing Mix?

The service marketing mix is also known as an extended marketing mix and is an integral part of a service blueprint design. The service marketing mix consists of 7 Ps as compared to the 4 Ps of a product marketing mix. Simply said, the service marketing mix assumes the service as a product itself. However it adds 3 more Ps which are required for optimum service delivery.

The product marketing mix consists of the 4 Ps which are Product, Pricing, Promotions and Placement. These are discussed in my article on product marketing mix the 4 Ps. The extended service marketing mix places 3 further Ps which include People, Process and Physical evidence. All of these factors are necessary for optimum service delivery. Let us discuss the same in further detail. Product The product in service marketing mix is intangible in nature. Like physical products such as a soap or a detergent, service products cannot be measured. Tourism industry or the education industry can be an excellent example. At the same time service products are heterogenous, perishable and cannot be owned. The service product thus has to be designed with care. Generally service blue printing is done to define the service product. For example a restaurant blue print will be prepared before establishing a restaurant business. This service blue print defines exactly how the product (in this case the restaurant) is going to be. Place - Place in case of services determine where is the service product going to be located. The best place to open up a petrol pump is on the highway or in the city. A place where there is minimum traffic is a wrong location to start a petrol pump. Similarly a software company will

be better placed in a business hub with a lot of companies nearby rather than being placed in a town or rural area. Promotion Promotions have become a critical factor in the service marketing mix. Services are easy to be duplicated and hence it is generally the brand which sets a service apart from its counterpart. You will find a lot of banks and telecom companies promoting themselves rigorously. Why is that? It is because competition in this service sector is generally high and promotions is necessary to survive. Thus banks, IT companies, and dotcoms place themselves above the rest by advertising or promotions. Pricing Pricing in case of services is rather more difficult than in case of products. If you were a restaurant owner, you can price people only for the food you are serving. But then who will pay for the nice ambience you have built up for your customers? Who will pay for the band you have for music? Thus these elements have to be taken into consideration while costing. Generally service pricing involves taking into consideration labor, material cost and overhead costs. By adding a profit mark up you get your final service pricing. You can also read about pricing strategies. Here on we start towards the extended service marketing mix. People People is one of the elements of service marketing mix. People define a service. If you have an IT company, your software engineers define you. If you have a restaurant, your chef and service staff defines you. If you are into banking, employees in your branch and their behavior towards customers defines you. In case of service marketing, people can make or break an organization. Thus many companies nowadays are involved into specially getting their staff trained in interpersonal skills and customer service with a focus towards customer satisfaction. In fact many companies have to undergo accreditation to show that their staff is better than the rest. Definitely a USP in case of services. Process Service process is the way in which a service is delivered to the end customer. Lets take the example of two very good companies Mcdonalds and Fedex. Both the companies thrive on their quick service and the reason they can do that is their confidence on their processes. On top of it, the demand of these services is such that they have to deliver optimally without a loss in quality. Thus the process of a service company in delivering its product is of utmost importance. It is also a critical component in the service blueprint, wherein before

establishing the service, the company defines exactly what should be the process of the service product reaching the end customer. Physical Evidence The last element in the service marketing mix is a very important element. As said before, services are intangible in nature. However, to create a better customer experience tangible elements are also delivered with the service. Take an example of a restaurant which has only chairs and tables and good food, or a restaurant which has ambient lighting, nice music along with good seating arrangement and this also serves good food. Which one will you prefer? The one with the nice ambience. Thats physical evidence. Several times, physical evidence is used as a differentiator in service marketing. Imagine a private hospital and a government hospital. A private hospital will have plush offices and well dressed staff. Same cannot be said for a government hospital. Thus physical evidence acts as a differentiator. This is the service marketing mix (7p) which is also known as the extended marketing mix.

1.

Primary Health care sector

Primary health care, often abbreviated as PHC, has been defined as "essential health care based on practical, scientifically sound and socially acceptable methods and technology made universally accessible to individuals and families in the community through their full participation and at a cost that the community and the country can afford to maintain at every stage of their development in the spirit of self-reliance and self-determination. In other words, PHC is an approach to healthbeyond the traditional health care system that focuses on health equity-producing social policy Service marketing mix with reference through Apollo Hospitals Product: Apollo hospital provides quality healthcare services with more than 53 branches across the country. Prominently Apollo is known best for heart problems and Knee and Hip replacement surgeries besides other major ailments. The specialities include Heart, Orthopedics, Spine, Cancer Care, Gastroenterology, Neurosciences, Nephrology& Urology Critical Care. Price: The hospital is priced premium and it can afford to do the same because of its positioning and its assurance as well as the reliability on the brand of Apollo hospitals. Along with it, it also helps that there are so many locations and specialities in Apollo hospitals. Thus a patient is reassured of his well being. Place: Apollo Hospitals has around 8500 beds across 53 hospitals in India and overseas. It is located in 15 different places across India which include Ahmedabad, Aragonda, Bangalore, Bhubaneshwar, Bilaspur, Chennai, Delhi, Hyderabad, Kakinata, Kolkata, Madurai, Mauritius, Mysore Noida. Promotions: Apollo promotes itself through the Community Initiatives viz

SACH Save a Childs Heart CURE Extends preventive as well as rehabilitative cancer treatment to the economically SAHI Society to Aid the Hearing Impaired

backward.

DISHA Distance Health care Advancement Project

People: Currently engages more than 19,000 doctors, nurses, paramedics, clinical staff and management professionals to manage over 8500 beds across 53 hospitals in India and abroad. Along with this Apollo Hospitals has several courses along with research facilities to facilitate innovation. Process:

The largest achievement of the Apollo Group has been to take quality health care to across

the length and breadth of India. This operation in itself involves very established procedures and documentation.

It has been a major player in scripting the medical landscape of the nation. This is primarily

because the group has continuously been at the helm of several game-changing innovations in Indian health care.

Apollo hospitals is NABH, NABL accrediated and also has ISO 9002 award.

Physical Evidence:

Apollo Hospital has been know for its quality health care services, at much affordable Provides the services for all the ailments & diseases, assuring the healthy recovery with Apollo Hospitals conducts a rigorous site survey process as well to take care of various

price.

quality care from the staff.

parameters in all their hospitals

2.

EDUCATION INDUSTRY

Product policy: In higher education refers to the services the sector offers. We have on the one hand, educational services as main products and support services as associated services, and we have on the other hand, the three main activities of universities as services offered: teaching, research and the third sector services (Bratianu, 2008; Huisman, 2007; Kantanen, 2007). The nature of services in general and their specific characteristics (simultaneity, perishability, intagibility, heterogeneity Fitzsimmons and Fitzsimmons, 2001) affect also higher education services and their marketing. Service marketing principles apply to higher education. To exemplify, it is well known that when we talk about services, both external and internal marketing becomes equally important, as the nature of the interpersonal interaction between the customer and the contact employee (in our case the contact between students and teachers and support personnel) often affects satisfaction (Voss, Gruber, Szmigin, 2007). Therefore, relationship marketing is one viable strategy in the context of higher education (Arnett et al., 2003), as service staff (lecturers, secretaries, administration offices personnel etc.) are to be responsive to the students needs and expectations. Quality of higher education institutions services becomes important as a trigger for customer satisfaction. But, every stakeholder in higher education has a particular view of quality, dependent on their specific needs (Voss, Gruber, Szmigin, 2007), consequently higher education institutions have to fulfil multiple needs. For instance, when we talk about quality of educational services designated to students, the teaching and learning activities are the two facets of the same coin and the results depend on both teachers and students (Temple &Shattock, 2007), who have to participate in the process to obtain a quality service. Branding is another marketing concept that started to be used by higher education institutions. Branding can be seen as part of both product policy and promotion policy and it has specific characteristics in the higher education sector: a) When talking about branding in higher education, the relationship between concepts such as brand, reputation and image has to be considered. Branding and reputation share common

grounds, but they are not identical. Reputation is generally seen as something that is more naturally built over time, while a brand is more constructed (Chapleo in DAndrea, Stensaker& Allison, 2007). Reputation is seen to be the collective presentation of past images of an institution established over time, while image (and based on it the brand) is the immediate set of meanings associated with a particular institution (Kantanen, 2007). Reputation is also seen by universities chief executives, to better reflect reality than brand does (Chapleo, 2004). For universities reputation is their very being and what they actually sell every day (Temple &Shattock, 2007). So reputation, rather than branding is a more suitable concept for the higher education sector. b) Branding is associated usually with the creation of images with the purpose of increasing sales. In higher education the purpose of developing a brand is not to sell products and services, but to communicate corporate identity in order to promote attraction and loyalty (Bulotaite, 2003). It is suggested that the concepts of institutional image and reputation can be interpreted differently in higher education compared to other sectors, as usually a good reputation for a company is associated with increased sales, while in higher education high reputation is often linked with minimal sales (HemsleyBrown &Oplatka, 2006), as the more prestigeous an university is the fewer students accepts in its educational programs. This illustrates again the differences between marketing concepts applied to the business sector and to the higher education sector. c) The higher education sector encounters challenges in branding due to the high degree of uniformity of the sector and consequently the difficulty to differentiate and create unique images for most higher education institutions. As Temple and Shattock (2007, p. 81) noted most universities are actually doing (or they say are) very like most other universities in branding they play with some mix of excellence, quality, achievement none remotely unique. d) the fact that higher education has multiple stakeholders, makes the branding effort much more complex and a multiversity perspective that shows multiple images at the same time is reccommended by some (Huisman, 2007). There are indications that branding played so far a modest role in higher education (Stensaker&DAndrea, 2007) and it is appreciated that there are a number of concepts associated with branding that have still to be explored in higher education (Hemsley Brown &Oplatka, 2006).

Distribution policy is rather not considered, as having too little applicability to the higher education sector. Promotion policy concentrates in higher education around marketing communications and dissemination of information, mainly in the context of choices made by potential students. This type of activity that emphasize on the use of communication tools (such as advertising, public relations, personal selling) in order to attract students, it can be associated with the selling approach, if the information provided at admission about the HEI and its services, does not correspond to reality. Subsequent efforts to ensure good student experience through valuable teaching experience and good support services and to prepare students for their profession (as main requirements of students from higher education Voss, Gruber &Szmigin, 2007) are to be done to ensure correspondence between reality and the communicated image and to maintain promotion policy within the marketing philosophy that concentrates on the consumer. Pricing policythat deals with setting the prices for the educational services has a number of peculiarities in the higher education sector. First of all until a decade ago, in many countries (mainly the European ones) higher education was totally state budgeted that meant from the students point of view that it was free of charge. Since tuition fees have been introduced, they encountered different forms in different countries (as full costs, as partial contribution to the educational costs) but the state still plays a major role in setting tuiton fees. For instance, in UK partial tuition fees for undergraduates have established upper limits by government, with the consequence that most higher education institutions have the same tuition fees. This illustrates how the application of this marketing concept has limitations in higher education, as the sector does not have always the freedom to set its own prices. This does not mean that the importance of price related aspects should be ignored. Price related information (tuition fees, cost of living, scholarships) is given equal importance as the programmes characteristics in the potential students choice, given the recent increased consumerism in higher education choice (Maringe, 2006). The use of these marketing specific concepts in higher education varies highly from one country to another. In USA as compared to Europe marketing concepts in higher education have been assimilated to a higher extent, as USA has gone through the clash of cultures between the traditional academic values and the market-focused values 10 years earlier (Chapleo, 2004). Even in Europe there are differences, with UK being seen among the earliest in Europe to introduce more market-like approaches to higher education (DAndrea,

Stensaker& Allison, 2007). But in many countries marketing related activities are at initial stages in higher education, communication being usually the first step to introduce a marketing orientation in the institution. To conclude, the most frequently met type of marketing activity that universities conduct is strong promotion and communication towards potential applicants related to increasing recruitment and admission. However, marketing specific actions should not stop here, the essence of satisfying the consumer (the student as primary consumer) is to offer him quality services (educational and support services). Therefore providing good student experience plays a major role in ensuring student satisfaction. Institutional image and reputation and based on them a constructed brand are also important in attracting students. Images, reputations and brands are also formed based on delivering quality services towards students and other stakeholders. In the case of higher education the product itself (teaching, research, third sector services, support services) are more important to deliver customer satisfaction, than any other marketing activity.

3.

FINANCIAL SECTOR

Marketing for financial services pose distinctive challenges to marketers because services are intangible, inseparable and cannot be inventoried. An expanded marketing mix is required to fully answer the differences between product marketing and marketing for financial services. The expanded marketing mix aims to capture the distinctive nature of financial services. Product The product is the heart of the firms marketing strategy. Poorly designed service products that do not create value for customers are destined to fail regardless of how well the other 6 Ps are executed. The goal of the product element is to create a service concept that would offer more value to a market segment than competitors. Working to transform this concept into reality involves designing a cluster of different but mutually reinforcing elements. The product must be a means to solve a problem or satisfy a want in the market. To date, overspending is a major issue in the Western world. This is the reason why the new HSBC prepaid card is included in the new current account package as a means to ensure that customers do not overspend by ensuring prudential budgeting of financial resources. Unique Features: Prepaid Card: HSBC will launch two prepaid cards, namely, the HSBCs Financial Manager and the HSBCs Budget Manager prepaid card. Both prepaid cards come preloaded with 10 after the customer pays the initial card issue fee. The Financial Manager is a way to manage a monthly budget by transferring your spending money from your bank account onto the card. It has an annual load limit of 15,000. The Budget Manager on the other hand has a smaller annual load limit of 2,000. The new HSBC prepaid cards would be fee-free while offering the same flexibility as a credit or debit card. The prepaid card however, would need to be loaded up with cash first before allowing its users to purchase products and services. The prepaid cards can also be used to withdraw money from cash machines. Real Time Balance Alerts: Real time balance alerts will be sent to the customers mobile device every time a HSBC prepaid card user purchases something. This balance update will notify the prepaid card user on the amount of money spent and the amount of money left for free. HSBC may need to team up with companies like Vodafone to provide this service. Online Banking: Another unique element of the HSBC prepaid cards are their flexibility in managing the customers financial resources. Bank customers can access the HSBC website

and set standing orders on how much money to load onto the budget manager every month as long as the funds are available in their current account. Optional Savings Account :Bank customers that pay more than 500 into their current account every month would qualify for the HSBCs Current Account Advance. Regular payments can be made through the internet or by direct standing order from the customers current account to save a specific amount every month. This feature is ideal for customers with a fixed monthly income. Price: The pricing component plays twin roles for HSBC in the sense that it must be able to first attract customers to purchase the service and also generate revenue for HSBC. According to Adrian Palmer (2008), there are five main factors that influence pricing decisions, namely, profit maximisation, market-share maximisation, survival, social considerations and personal objectives. While pricing strategy is highly dynamic for other products and services, pricing for current account services have become rather static in recent years. Most banks do not require any fees to set up a current account. Banks instead rely on the money that floats in the interval when they are deposited to when they are spent in order to profit from current accounts. It is unlikely that any increases in interest rates would be able to attract customers to open up new current accounts with HSBC. The base lending rate that is now at 0.5% provides little room to manoeuvre for banks and other financial institutions. Adding to that is the credit crunch and declining asset prices that makes borrowing at a higher rate unattractive at the moment. The initial prepaid card issue fee should be around 10. This is in line with what competitors are charging at the moment. The catch with the prepaid card scheme is that it encourages bank customers to save. Any money that is saved is held within the customers current account and remains available for banks to provide further lending. This may prove to be highly beneficial to HSBC during times when raising new capital is extremely difficult. Place: The place element involves delivering the product element to customers through appropriate methods and delivery channels. Delivery may involve both physical and electronic channels. Failure to make a service product readily available to customers would guarantee its failure regardless of how good the service product is. The new current account package would be made readily available throughout HSBCs 1,492 branch network and also through the internet.

Promotion: The promotion element relies on effective communications to bring awareness in the market of the service products offered by HSBC. The three objectives of the promotion element are to gain the attention of customers, provide additional information and persuade customers to purchase the product. Advertising is mass, paid communication that is used to transmit information, develop attitudes and induce some form of response on the part of the audience (Adrian Palmer, 2008). The choice of media that would be utilised includes newspapers, magazines, outdoor advertising and the internet. A sales promotion will also be carried during the first three weeks after the launch date to help stimulate customer purchase and the effectiveness of intermediaries (Adrian Palmer, 2008). Other promotional materials include press releases, posters and brochures. People: Despite technological advances, many financial services still require direct interaction between customers and bank employees. The nature of these interactions strongly influences how customers perceive service quality (Hartline & Ferrell, 1996). This is particularly true for financial services as employees are often the first line of contact with the customer. Due to the importance of this element in the marketing mix, special attention needs to be given to the training of employees concerning the new current account package. The prepaid card concept also requires some serious attention as its aim is to show HSBCs change of stance concerning the psychology of spending. Training should only be given to bank staffs that are directly involved in the new current account package. However, back office staff must also be formally notified concerning this new current account package to ensure that the entire organisation have a coherent understanding on the banks products and services. Besides that, training of IT personnel must also be stressed as new information systems may have to be put in place before the launch of the new product. Physical Evidence It is generally recognized that physical evidence can be subsidized into two components (Shostack, 1982): peripheral evidence which can be possessed by the consumer but has little independent value and essential evidence, which cannot be possessed by the consumer but has

independent value. The peripheral evidence is the prepaid card itself while the essential evidence includes bank branches, cash machines, posters and brochures. Process The process element focuses on the mechanisms by which the service is delivered, including business policies for service provision, procedures, degree of mechanization etc. It is imperative that the policies and procedures are written and tested before the launch of the new current account package. Bank personnel are to conduct a test to determine how efficient and effective front line staffs are at explaining the new current account package and setting up new current accounts. A step by step guide on how to set up a new current account and prepaid card system is to be issued to all front line staff to ensure that no confusion is to occur during the critical launch date. Besides that, front line staff should also be constantly monitored to ensure that the delivery of services occur smoothly. Customer feedback and complaints should be welcomed as they would provide the input needed to continuously improve service delivery and customer satisfaction.

4.

TOURISM INDUSTRY

Tourism being a people oriented industry requires persons serving other persons. It has proved to be important element of this industry for last several decades. Ever since market oriented approach has come in to existence tourism services are facing severe challenges not only in terms of quality but also in terms of diversity. For instance, in the past people used to travel for a specific reason, i.e., trade or religion. Hence, their classification procedure was simple and their requirements could easily be assessed. But today motivation for travel has become so diverse that not only there classification has become complex but it has also affected the product designing process. In subsequent Units you will study about technicalities involved in designing of tourism products. You should know that the peculiar characteristics of tourism product related services are that it is highly sensitive to internal as well as external factors. In our recent past you must have noticed that the post-December 13, 2001 period witnessed decline in tourist arrivals due to advisories issued to international tourists bygovernments regarding unsafe political conditions in the country. This happened once again after terrorist attack on pilgrims at Akshardham temple in Gandhinagar in Gujarat. These are sufficient reasons to say that in comparison to other services tourism services are more vulnerable to sensitive issues. Thus, while designing tourism products or their related services you must bear in mind all these issues and considerations Product: Product in Tourism is basically the experience and hospitality provided by the service provided. In general the experience has to be expressed in such a way that the tourists see a value in them.

Process The process in Tourism include, (a) trip planning and anticipation, (b) travel to the site/area, (c) recollection, (d) trip planning packages. The trip planning packages include, maps, attractions en route and on site, information regarding lodging, food, quality souvenirs and mementoes

Place and Time Location and Accessibility.The place and time in tourism is providing directions and maps, providing estimates of travel time and distances from different market areas, recommending direct and scenic travel routes, identifying attractions and support facilities along different travel routes, and informing potential customers of alternative travel methods to the area such as airlines and railroads.

Productivity and Quality: This is similar to other service industries. The quality is assessed by time taken for a service, the promptness of the service, reliability and so on.

Promotion and Education Like other services, the promotion should address, the accurate and timely information helping to decide whether to visit target audience, the image to be created for the organization, objectives, budget, timing of campaign, media to be selected, and evaluation methods.

People People is the centre for Tourism. It is more a human intensive sector. For hospitality and guest relations it is very important to focus on people. It also plays a vital role in quality control, personal selling, and employee morale.

Price and other user costs The price of the tourism services depend on business and target market objectives, cost of producing, delivering and promoting the product, willingness of the target, prices charged by competitors offering similar product/service to the same target markets, availability and prices of substitute products/services, and economic climate. The possibility of stimulating high profit

Products/services by offering related services at or below cost.

Physical Evidence In Tourism the physical evidence is basically depends on travel experience, stay, and comfort. Here, the core product is bed in case of stay.

5.

HOTELINDUSTRY

In any organisation, we find product the focal point. The hotel services also require a fair combination of core and peripheral services. It is right to mention that in almost all the hotels of same category by and large the core services are found identical and therefore the peripheral services divert a close attention where the hotel personnel need professional excellence. More innovative the peripheral services, more attractions we add to our product mix. This makes it essential that hotels and hotel companies assign due weightage to the formulation of an optimal product mix in which peripheral services prove to be a point of attraction. The emerging trends in the socio-economic parlance necessitate an analogous change in the product mix. With the passage of time, it is quite natural that some of the services becomes outdated and therefore, we need to eliminate them. At the same time, it is essential that we keep our minds open and come to know the latest developments in the likes and dislikes of the customers, and while including new services in the product mix, assign due weightage to their preferences, While formulating the product mix it is pertinent that we make the ways for

frequent innovation. It is also right to mention that frequency in innovation is found essential and at the same time easier in the context of peripheral services.

The hotel professionals are required to formulate a package that helps in attracting the customers. Modifications in the existing services by adding a few outstanding properties is found to be a suitable strategy for the development of product. The generation of idea, the formulation of concept, the analysis of product cost and the testing of services before their final commercial launch become significant in the very context.

This necessitates an in depth study of product life cycle. A hotel manager bears the responsibility of adding attractions to the product mix and this is possible when they have world class professional excellence. While formulating the product mix for the hotel services, it is essential that catering management, restaurant and cafeteria management, management of bedrooms, management of convention halls are given due weightage.

The boarding services are considered to be an important part of product mix. In addition, the lodging services also become significant. Here it is essential that facilities like light, water, electricity, ventilation, entertainment, sanitation arrangement of bed etc. are available to the guests. While formulating the product mix, the hotel organisations are required to make possible a fair mix of core and peripheral services. We can't deny the fact that as and when we talk about the services of hotel industry, our focus is on the tourism industry because from there we get profitable business. In addition, the industries and their executives also divert our attention since they help us substantially in getting the business.

We can't devalue the instrumentality of educational institutions and business houses in getting business for our convention halls. These facts make it clear that while formulating product strategy, it is pertinent that the hotel professionals keep in their minds the users of services and their characteristics. In the formulation of a sound product strategy, it is essential that we assign due weightage to the mix of services expected and desired by the potential customers. We need to make the information system strong enough to initiate suitable guidelines for the strategic decisions. What to offer? What to modify? What to alter? What to eliminate? These questions require suitable answers which are expected from the professionally sound and high performing team of hotel personnel. If we find that our competitors have been innovating their strategies, we have no option but to practise the same. If we want to project our image as a

leader, we have no option but to make the ways for innovation. We need broad-based information related to the local community vis-a-vis the foreign and domestic tourists. In addition, the information regarding the facilities available in the hotel would be related to both such as areas producing revenue and areas not generating profitable financial returns. The information regarding the details of competition are also to be collected regarding the various facilities made available in a hotel including the prices, profile of potential customers, such as age-bracket, sex. Type of group, place of employment, place of residence, mode of transport, room popularity, new guest, first choice, length of stay, any complaints and who made the booking. Besides, we also need information related to hotel activities, such as occupancy statistics, seat turnover percentage, number of empty days. Pattern of sales in restaurant and bar or so. It is not to be forgotten that needs of the guests are the cornerstone of marketing analysis.

An in depth study of what the competitors are doing, implementation of unique selling proposition to fulfill the needs of customers, determination of objectives and the formulation of strategies, advertise a promise which is genuine and creditable and in which the customers can easily discern their own benefits can't be devalued in the very context. It is pertinent that we view everything from the customers perspective.

The accommodation facilities available and the housekeeping draw our attention to improve the quality of services. While formulating strategic decisions, it is significant that we include in our product mix all the new services offered by our competitors.

Not only the primary and auxiliary or core and peripheral but even the supportive services offered by allied industries divert our attention. The development process cant remain static. This necessitates a continuous effort for incorporating 'he necessary changes in our service mix. The issue of concern here is how and what to incorporate? A sound product strategy is found a pre-requisite for establishing a fair or positive image. Image is the way in which a hotel portrays itself. The factors like atmosphere, brand name, the status, type of people and corporate institutions patronising a hotel would be instrumental in building up a fair image. And the most important thing in the projection of a fair image is the quality of services and the behaviour of the front-line staff.

PROMOTION MIX FOR HOSPITALITY SECTOR:

For successful marketing, it is only not sufficient that we concentrate on the quality of services but it is also impact generating that we promote our business in such a way that our prospects come to know about the quality to be offered to them as hotel customers- This focuses our attention on innovative promotional measures. It is against this background that we talk about the promotional measures. There are a number of components for promoting the business and it is hoped that professionally sound employee would blend the different constituents in such a way that effects are proactive but the process of persuasion is cost-effective. The components like advertisement, publicity, sales promotion, personal selling, word-of-mouth promotion and telemarketing need due attention of hotel professionals. The success rate of a hotel is virtually coiled in the essence of transforming the occasional visitors into the habitual visitors because this helps substantially the process of increasing the occupancy ratio. The sensitivity is vigorously influenced by creativity.This makes it essential that the decision makers in the hotel industry make sincere efforts to formulate sound promotional strategy. We can't deny the fact that creation of awareness has a far reaching effect on the formulation of promotional strategy. If scientifically formulated, optimally blended promotional measures are used by the professionally-sound and personally-committed hotel personnel, the rate of success would be found satisfactory. We find a number of instances to quote that even quality services failed in creating and expanding market because the promotional measures failed in sensitizing the prospects. This draws our attention on using the different components of promotion in such a way that we find them very much instrumental in throwing a positive impact Price Mix Pricing decisions are found critical, challenging and chaotic. Of course, no marketing mix is found so much critical as pricing. Pricing is not only the outcome of the marketing forces. It conveys something to customers even about the quality of a product. There are a number of variables influencing the pricing decisions of an organization. The pricing decisions are beset with many problems. No doubt in it that fixing the hotel tariffs is just like pricing other goods and services. At the same time, it is also right to mention that the hotel professionals need more excellence while fixing the hotel tariffs since the services are found of perishable nature. In addition, the seasonal fluctuation in demand and increasing

intensity of competition also complicate the task of professionals. They need world-class excellence while making strategical and tactical pricing decisions. Pricing decisions are found important in both strategic and tactical sense. In the tactical sense, it plays an outstanding role. This is due to the inseparability and perishability of the hotel products. This is also due to the inability of the service engineering organizations to carry over unsold stocks as a buffer to cope with future demand as found in the goods manufacturing organizations. Also known as price deregulation, tactical pricing is found instrumental in promoting the hotel business. Experiences show that in the hotel industry, it is found to be a major selling tool. There are a number of ways for practicing and benefiting from this tool:

Seasonal Discounts Found applicable in the hotel industry. Customary to charge lower Trade Discounts Found applicable in the hotel industry as tour operators and travel agents Special Discounts In the hotel industry, we find special function room rates for overnight

prices, specially during the off-season.

are offered discounts.

convention. Pricing for Room Tariffs Here, we go through the guidelines for fixing reasonable room tariffs. While fixing room tariffs, it is essential that we assign due weightage to the price structure to be adopted. The average room rate should not be much higher than the competitive hotels otherwise the market will not welcome it. A hotel may also adopt a policy to give high pay roll to provide a higher standard of services that the customers are ready to pay. There are some common factors considered by the hotel management and the public:

Current charges prior to a review the established inflationary effect on cost the general economic situation the emerging trends in currency exchange and the intensity of competition.

Right averages and average room rates are the two important aspects to be taken into consideration while fixing hotel tariffs. The following are the economic criteria on room tariffs:

The total amount of net operating costs (after contribution from the food and beverage

departments). Net operating costs, net operating cost plus rent (if payable) net operating cost plus interest and net operating cost plus a target return on capital.

This helps in calculating the total room sales and to achieve various levels of profits with On the basis of the above, a schedule should be produced as per the average room rates Budgets on room sales are to be planned based on sales mix taking into account the After this, based on the current quoted tariffs, it is possible to calculate the different sources

the assumption that room department cost ratios, staff numbers and staff standards are known

required in order to break even and/or to achieve the profit targets at various occupancy levels.

different sources of business.

of business, must/not be exceeded if the average rate required is to be achieved. The most expensive suite of THE REGENT, Mumbai, i.e. king suite is for Rs. 45000 + 20% taxes and the Normal Suite is for Rs. 15000 + 20% taxes. In each room they are providing facilities such as T.V., computers, telephones, etc. the major difference behind this price variation is the different quality of services provided by the hotel such as better quality shampoo, bed sheets, and the dcor of the room. Pricing for Food and Beverage In a majority of the hotels, there are three or four types of rooms but so far as the menus are concerned we can have dozen of dishes. There are some of the important points to be considered in the process:

Do you find that your guests are eating in the hotel restaurant or coffee shop where the

competitive restaurants are very close to the hotel. Generally a proportion does eat in but a significant proportion goes out.

Where a hotel has two or more restaurants, they compete with each other and help splitting The business in the function room.

the market down the middle rather than offering a true price.

Pricing for Function Restaurants can get more business because the food, services or atmosphere is unique or just a little better than the competitors. But this aspect is found more complicated for function room services. Most of the functions are fairly routines that make it difficult to produce a gastronomic experience. In addition, this aspect is found more competitive specially on the price front. Payroll is found to be a major cost on functions. Unless we move to the self-service (buffet style) functions, the payroll would remain an important dimension. A number of hotels are found fixing a staff standard for functions based on their style of hotel or one waiter to a table of ten people or one waiter to two tables. Yet, we find payroll more expensive.

Place Mix The problems hotels experience in reaching new customers lead them to use third parties as intermediaries. This costs money in the form of commissions, of course, but then so does advertising. Let us consider the various means by which hotels and their customers can be brought together . Direct individual sales This is the simplest method. The would-be guest chooses a hotel and then contacts it by letter, telephone or some other medium. The only parties involved are the hotel and the customer. Of course, the customer has to find out about the hotel first. This involves some kind of advertising or promotion. Typical methods include mentions in guidebooks, local accommodation brochures or directories such as the motoring organization handbooks. One of the main problems with direct contact is that the customer is usually located a considerable distance from the hotel. This means that he has to place a long distance telephone call in order to make a booking, and might have to repeat this several times In order to obtain a

room at a particularly busy period. This costs money and (what is often worse) often takes a good deal of time. However, not all travellers bother or are able to arrange accommodation in advance, and a hotel can always appeal directly to these. Roadside advertisements are examples of this approach. Direct group sales Many direct bookings are actually made on behalf of groups of one sort or another. Some of these are relatively small, such as sports clubs outings, overnight functions and the like, but others can be very large, such as major conferences. These are sometimes arranged by specialist agencies, but quite often the organizer prefers to deal with the hotel directly. Groups are so important as a source of business that they are an exception to the usual rule that it is not worth the hotel while to try to contact the customer directly for some face-to- face selling. Travel agents There are two main types: 1 Retail agentsThese are the common and familiar high Street agents who sell direct to the public. Their main business is to arrange holidays for their customers, including hotel accommodation. 2 Company agentsSome city centre agencies specialize in business house travel, while organizations such as major multinational companies are so big that it is worth their while to have their own travel agency to handle all their business. Sometimes they buy one outright, sometimes they simply invite a small agency to specialize in their business. Either way, the agency is likely to handle a lot of valuable bookings. It receives the usual commission, though some of its profits are likely to be passed on to its parent company or major client. Travel agents make their money from commissions received on the sale of tickets and bookings. Since tickets are fixed in price, the mechanism is simple. The agency carries a stock

of blank tickets and simply remits the money less the commission to the carrier after it sells one. Group Tour Operators These include the familiar names whose brochures you will find in any retail travel agent. Many of the larger ones have their own retail out lets. In all, they sell an enormous number of holiday packages and book a comparable amount of space at hotels. This category also includes a vast number of smaller operators of various sorts. Some undertake speciality work, arranging battlefield or birdwatching tours, safaris, ski trips and the like. Others specialize in arranging conferences. One of the fastest growing sectors is that of incentive travel, usually arranged by a company for its clients or its successful sales staff. This is a specialized field, and it has attracted its own full-time companies that provide a range of consultancy and administrative services. Group tour operators do not receive commission because they are not introducing clients but rather booking the space themselves. They make their money from the difference between the cost of the separate elements of the package (transport, food, accommodation, entertainment, etc.) and the price they are able to charge for it as a whole. Airlines The major airlines are in a special position, since they are large and commercially very powerful. They are important to hotels because:

The nature of their operations means that they are constantly having to send their flight

crews to overnight in hotels all over the world, and this in itself means that they create a considerable amount of business.

They deal with an enormous number of travellers. Such travellers often find it

convenient to arrange other services, such as car hire and hotel accommodation, at their destinations as part of the booking process. This puts the airlines in much the same position as the nineteenth-century railway companies, who also used to make hotel bookings for their passengers, and who even found it profitable to own and operate their own hotels.

They frequently have to make arrangements for travellers grounded through no

fault of their own. Arranging overnight accommodation for a planeload of passengers held up by fog or some other operational problem is a common task for airline staff, and can be a useful source of business for hotels in the vicinity of major airports. Hotel representatives Hotel representatives were originally an American idea, developed because the USA is a large country with widely dispersed centres of population, yet a lot of business travel. Hotel representatives base themselves in one such area (some now have worldwide representation) and act as sales and reservation agents on behalf of a number of non-competing hotels from other regions. Local travel agents are able to make bookings for the clients quickly and cheaply, rather than incurring the expense involved in long distance telephone calls. Representatives will also distribute your brochures and other promotional mater locally. They are usually paid an annual fee plus commission on the reservations they generate. Hotel booking agencies Some areas are short of hotel space and it is particularly difficult to find accommodation in them at busy times of the year. This is fine for the local hotels, but not much fun for those trying to make bookings there. This has led to the development of specialized hotel booking agencies. Some of these offer this service to individuals. Other hotel reservation agencies deal mainly with travel agents or conference organizers and offer a national, continental or ever worldwide service. Such agencies earn their living from commissions in the usual way, though there is usually also a systems charge to cover the installation of any specialized equipment. Group reservation systems These are designed to help customers to book accommodation at any of the hotels within a group, usually with one local telephone call. They offer a valuable service to travel agents, who may have to make a number of bookings at different locations at the same time. However, the facilities can also be useful to the individual traveler, who is able to make a booking at a distant hotel with one local call. An incidental advantage is that the systems make it easier for the group to monitor overall booking trends.

Tourist Information Centres The idea behind the Tourist Information Centre is quite different to that of the group reservation system. The latter aims to help customers to book at group hotels anywhere in the world. A Tourist Information Centre aims (among other things) to help customers to book accommodation at any hotel within its own local area. It resembles the hotel booking service, except that it is not a commercial enterprise but a local government service. The Tourist Information Centre also differs from most of the other intermediaries in terms of the type of customer it deals with. Group reservation systems tend to be set up by the big international hotel chains and used by agencies specializing in business travel services. Tourist Information Centre booking services tend to be used by private individuals interested in much cheaper accommodation, often of the bed and breakfast type.

The Internet Group reservation systems restrict the customer to Just one company or consortiums hotels. The Tourist Information Centre system is not limited in this way, but it suffers from resource problems that reduce its usefulness. In any case, it still puts an intermediary between the customer and the hotel. The Internet does away with these limitations, as more and more customers are discovering. Any would-be guest equipped with a computer and a modem can now call up a hotel database covering his proposed destination and select an establishment on the basis of its location, price and facilities. He can use the built-in e-mail facility to check its room availability, make a booking and even pay a deposit by quoting his credit card number, all without having to leave the comfort of his home or office. With a fax connection as well, he can have a confirmation slip printed off. In short, it allows him to select a hotel anywhere in the world and offers him instant connection at minimum cost, with all the advantages of immediate response and a permanent record. The People

In an age of sophisticated information technologies when we have been making superhighway for communications, there is a basic change in the expectations of users. The personnel serving the hotel companies no doubt depend substantially on the instrumentality of information technologies but here it is also important that hotels and hotel companies assign due weightage to the development of personnel. Sky is the limit for perfection. This phrase is meaningful not only for the technologies but even for the people who manage them. It is against this background that the marketing experts the world over has been found making a strong advocacy in favour of an ongoing training programme for the personnel servicing the hotel companies. The prime focus is on the front-line-personnel working in hotels in different capacities. The receptionists, the porters, the housekeepers, the waiters and waitresses and even the doormen play an incremental role in promoting the business. The sales executives, the marketing managers, the senior executives bear the responsibility of managing the front-line-personnel in such a way that the promised services reach to the ultimate users without making any distortion. Of course, they are supposed to have proper education and knowledge regarding the services they need to offer but here, it is also important that the hotel organizes for them an ongoing training programme, refresher courses, capsule courses, lecture programme, specially related to the behavioral profile. There are several cases to quote that even the five star hotels where the users stay with high expectations, a minor mistake committed by the receptionists or the housekeepers has resulted in a big loss. The frontline- staff in particular needs to identify the changing levels of expectations of users and in a majority of the cases they virtually fail in doing such. A gap is generated between the quality promised and the quality-offered. If the hotel personnel prove to be high-performers, personally committed, professionally sound, value-oriented, aware of the behavioral management; familiar with the aesthetic management; they can satisfy the users even if the sophisticated technologies develop a fault. This makes it essential that the hotel personnel are made available an ongoing training facility efficacious in enriching their professional excellence.

The cases of menu fatigue, power interruption, mismanaged bedrooms, function rooms and restaurants, indecent behaviour of doormen, poor information to the receptionists and enquires can be minimized considerably if due weightage to performance-orientation is assigned. THE REGENT, Mumbai, has recruited only those employees who have completed their diploma or PGDBA in Hotel & Catering Management. They have 700 permanent staff and 200 trainees. Their whole staff is well educated and well mannered because they are from the Hotel Management field only. These employees have western formal dress code. Slang is not allowed by the staff. This is how THE REGENT is maintaining and improving their quality of service. Training is also given to these employees. For this training they are appointing a well-known personalities from the field of hospitality industry. Process In order to ensure that the core product and the supplementary product is developed and delivered in the right manner and at the right time, the hotel has formed certain set processes. When the room is being prepared for customer check-in , the house-keeping department make sure that all the room amenities are provided as per the check list. For e.g. certain room amenities like 3 embroidered laundry bags, 2 closed slippers with logo, 2 shoe bags, etc. are provided by The TajMahal Hotel. Infact the processes are so specifically laid down that hotel staff are even advised on what to say and what words to use while talking to a customer. The following example will illustrate this better. When a customer asks for something to be done instead of saying no problem, the staff is taught to say most certainly People People here mean the customers, employees, management and the society. It is the final customer who is to be satisfied and this can be done only with the help of the employees, who are directed and guided by the management. In the end the final motive of Taj is to provide consistently and relentlessly an Indian experience of warmth and hospitality by anticipating and exceeding guest expectations. They also provide various customer services such as The Taj Inner Circle Group, Taj Advantage and Taj Epicure. In order to ensure the productivity of their employees they provide them with various facilities such as medical help, consultation, traveling facilities, perks and bonuses. The employers here

each have their own lockers in which they keep their uniforms and other belongings, they also have bunkers with small beds so that the employees working in shifts can catch some sleep if need be. In spite of the fact that human resources management is such an integral part of the service industry of which hotels form a major part, its role has begun to be acknowledged only recently. The Taj Group of Hotels is probably one of the first Indian hotel chains to have recognised and respected the significance of HR in the hospitality industry. Says K S Srinivasan, GM-corporate human resources, The TajMahal Hotel, Mumbai, Functions like sales, marketing and HR are not hotel-specific, unlike those of chefs, housekeepers, bartenders, stewards and the like. They are, in fact, common to all businesses. He asserts that HR, as a function, is like a partner in the business in any organisation and not a stand-alone function. It is the key to effective utilisation of the manpower that the hotel industry is so dependent on. And the Indian hotel industry is among the most labour intensive since the number of people serving guests is the maximum here. It is precisely for this reason that the significance of HR requires to be appreciated. It is not merely monetary rewards that employees seek today; the intriguing aspect is the learning experience that the job promises. It is precisely with this very thought in mind that the Taj Group of Hotels, a Tata enterprise and one of the oldest hotel chains in the country, decided on a training programme for the operations trainees, explains Srinivasan. Interactive sessions between the Taj management and the director of the Tata Institute of Social Sciences (TISS), a Tata educational and research institution, led to an interesting and comprehensive tailor-made course curriculum being chalked out. Thus was born the Taj TISS HR Associate Programme, a one-year course comprising four modules that are designed to give equal importance to and impart balanced knowledge of both the theoretical and the practical aspects of all HR-related functions of the hotel industry. After finalising the course details, the Taj made announcements about the course, offering interested trainees with two to three years of work experience an opportunity to apply. The response was encouraging and five trainees were shortlisted for the first batch of the training programme. Each of the four modules have four sections. The first stage consists of theoretical lessons, providing a sound background to the practical application of the knowledge required of them in

the second stage. In the third stage, the students return to the Institute and their performance is evaluated by professors of TISS. In the fourth and final stage, grades are awarded. While practical training sessions for the first three modules have been organised at the Taj hotels across the country, the fourth modules practical sessions had students of the first batch working in Tata companies such as TISCO and Tata Consultancy Services (TCS). This gave them a wider scope and more exposure, besides making them realise that HR skills in a servicespecific industry like the hotels are much more challenging than their application in the manufacturing or any other industry, observed Srinivasan. He said he himself had started off in the manufacturing industry and only later did he move over to the service industry. I have been in the industry for over a decade now and am well-set here, he added. The key to retaining staff and ensuring the success of any business organisation lies with the HR department and its effective functioning. Any organisation, including hotels, incur heavy expenditure on their employees, especially between the time of recruitment and the employees acquisition of the skills imparted during their training. It can be inferred, therefore, that a high employee turnover rate lowers the efficiency of the staff as a whole owing to their constant onthe-job training and skill enhancement. An organisation must be able to create for itself a unique place and image in the minds of the employees, both present and prospective. This enables the employees to aspire to be a part of the organisation, giving it their very best, says Srinivasan. Though the training programme has and will continue to cost us money, we believe that it is truly worthy investment, he added. The Taj group, says Srinivasan, is an expanding organisation and we are a people-oriented company. What we need are people who can match our organisational standards. We are also looking to create and ensure a constant supply of good quality HR professionals, which is why we decided to impart training of an extremely specialised nature to our management trainees. I have observed them at the end of the programme and must say that they appear all charged up and raring to go, he remarked. The Taj-TISS joint programme is expected to create a demonstration effect in the industry with more hotel groups placing additional emphasis on the HR training programmes. To be a successful HR professional, what is required most is the aspirants ability to challenge themselves as well as their colleagues. Only then can they get the very best from themselves and their team. Challenges in the HR field are immense and since it is so people-centric, it is

only obvious that professionals should have strong people-management skills, explains Srinivasan. Besides this, a right attitude towards the job and life in general is extremely essential. As a manager myself, what I would look for in an applicant would be the ability to fit into my organisation perfectly and be emotionally balanced, competent and above all, be a cultural fit, fulfiling the basic values that the Taj is known for, concludes Srinivasan. Productivity The Taj as a hotel does not compare itself to only Indian hotels, but even with the hotels internationally as it claims to have World Class Quality. In order to ensure that its inputs are transformed into desired outputs, they provide extensive training to their employees irrespective of the field they come from. The TajMahal hotel has various quality tools to enhance quality. This involves every department, as they have to make sure that the raw material as well as the finished product is of top quality. At The Taj, it is the responsibility of the purchase department to make sure that the raw materials are purchased at the Right Time, Right Place, Right Cost and from the Right Source, in order to avoid any hindrances in their productivity and quality. Taj has developed enormous credibility in terms of trustworthiness being the oldest brand of hotels, with the reputation of being World class and honest service provider. Security, Communication and understanding the customer psychology are special assets the Taj management has mastered with time.