Essay 1500 Words

Hospitality Business Development

The Customers drive the hospitality Industry and thus the Essay

starts with the definition of Actual and Potential Customers. Then

the essay talks about the different kinds of market segment that

the hotels attract. Targeting a particular market segment is a very

crucial decision that a service provider has to take and this

decision is very important as it creates a competition with other

players in the market. To remain in competition the hotel has to

know about the techniques that help in knowing the strengths and

weaknesses of the competitors in the market. One such technique

that the essay talks about is competitive intelligence. Customer

satisfaction is to be achieved by the service organization and for

this there are crucial steps such as cost differentiation and focus.

For developing a sound business the competition in the market

has to be identified and then the development of products and

services can be carried out. Then the essay links the work place

climate to the customer satisfaction because a good work place

climate motivates the employee to perform better and achieve the

target. Then the essay narrows its discussion on the Indian

scenario and highlights the steps to be taken to create a mid

market hotel business targeting the Indian middle class

specifically. The research methodology used for this Essay

comprises of both primary and secondary data and is linked

properly to provide a concrete connection between the two. The

essays draw towards the suggestions and recommendations

which are very much essential to be taken care of in order to keep

the customers attracted towards the products and services.

Jones & Merricks, (1994, pp.19) defines customers as “people

who actually pay for products and services” and may or may not

be also consumers. Hence, these customers if gets satisfied

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through the products and services given to them may refer the

business to outsiders that is the so called potential customers. A

hospitality establishment is always customer centric in nature and

hence the products and services thus developed should meet the

demands and needs of the targeted customers. But the question

arises that how can an organisation achieve customer

satisfaction? A possible answer can be a favorable work place

with an optimum environment which means the stronger the work

place climate the stronger the customer relation and once a good

bonding are established then the organization rises up. Anon

(2011) Knowing customers and reaching beyond their

expectations is a tough task and for these Robert et al (1996)

suggests the understanding of value as perceived by customer

which can be achieved by few simple steps. The organization

should first identify the value, select the identified value, provide

the value, communicate the value to the customer and lastly

assess the value that is being delivered. On the contrary

Hassanien et al (2010) then they suggest the development of new

products for new markets that will automatically attract new

customers, they suggest strengthening of more market share that

is market penetration. Thus, a well structured marketing strategy

is very much essential. This helps in knowing your customers in

many different ways such as the market segment they represent,

their annual income, their choice of products and services. There

are three different kinds of market strategies for achieving

competitive strategies which are cost leadership, differentiation

and focus. (Horner and Swarbrooke, 1996) When market

competition comes into mind then there are two main types as

suggested by Bowie and Buttle (2004) that is direct and indirect

competition. In direct competition the two different business

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organizations provide same products and services targeting the

same market segment, hence it can be also termed as face to

face competition. These kinds of establishment are generally

located in the same vicinity. For example in the Indian market

Dominos and Pizza Hut have same kinds of products i.e. Pizza

and target the younger generations. So, it is very important that

when the products and services are exactly same then they come

out with new ideas from time to time. For example the fast food

industry was held responsible for contributing a lot towards

obesity and to gain attention McDonald introduced Happy Meal for

children that encouraged them to eat more fruits, vegetables, fruit

juices and low fat dairy products. Valliere and Balice (2010) This

type of ideas help in maintaining excellent market competition and

good business. But when we talk about indirect competition then

in this type of competition the products which can be substituted in

place of each other come under the category of indirect

competition. A possible example can be a situation where due to

unavailability of a business class seat in a plane the traveler takes

economy class as a substitute. When the given topic is justified

about setting up a hospitality business in Indian Market then a

hotel targeting the middle class market will definitely do good

business because it represents the largest and widest market in

India. When the research carried out by HVS and Federation of

Hotel and Restaurant Associations of India (2009-10) is taken into

consideration the competition in the Indian Market is very high.

There is increasing use of technology and easy availability of

manpower and the products and services offered are almost same

in one or the other way. Hence there is a need of competitive

advancement in the market to establish a sound business. Hence

competitive intelligence is an effective tool that can be used to

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counter check the growing competition in the market as it gives an

insight into the strengths, weaknesses, their marketing strategies

coupled with some more information which help in getting market

share in global competitive environment. Wadie Nasri (2010). The

report by Euromonitor International (2009) Suggests that Asia

Pacific (10%) and Australasia (15%) has the largest mid market

segment’s share and is growing at a rapid pace and will account

for a major market share by 2013. After the economic meltdown

people became more and more concerned about their spending

and hence they always look for cheap and best. So, they are

attracted by the budget hotels. The economic downturn also

forced the finance managers to cut down all available cost cutting

options. But the good news is that despite their efforts they could

not manage to cut more to avoid spending on travel and

accommodation hence the only option is left is the budget

segment. The competition in the mid market segment is quite

healthy and there are numerous hotel operators with the presence

of international chains like Accor and the like. Hence, when a

hotel business is to be developed then it is to be kept in mind that

the Indian Customers demand services that means complete

comfort. They like to be given value and the term “customer

satisfaction” is to be achieved by all means. Hence, a proper

market research is required as the prerequisite for effective

decision making about how to develop the offer and then deciding

the appropriate location for the business development. When the

appropriate location for the business development is set then the

time comes for pricing of the offer. When the price is high the

expectations of the quality for the products and services are also

and vice versa. But an advantage can be on the sideline when a

business development offers greater quality at a moderate rate.

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Bowie & Buttle (2004) Indian market is as such that the customers

need to be treated as god. Thus a sound business development

strategy is very crucial for the inception of a business

establishment. So, it is to be kept in mind that inception of a

business for the middle market/ budget segment the competition

is very crucial and new products and services are to be developed

from time to time to attract the actual and as well as the potential

customers. It is also a fact that what people see they believe.

Hence, right ambience is also desired for this market segment.

The hotel industry in India is a very big industry and hospitality is

what makes India a country of choice. It is clear with the essay

that the mid market segment in India is the largest segment and

forms a major part of the population. Hence, from the entire Essay

it is clear that managing customers and competition

simultaneously is what can be expected from a new hotel. But it is

also to be kept in mind that the development of a business and

steering it into the hearts of the Indian people is easy if the

products and services are designed in accordance with their

needs. But at times it is seen that associated organizations with

the hotels behave wayward with the customers. Everyday new

hotels are coming up with greater ideas and lots of options in

offer, which states the intensity of competition in the market.

Hence, the mantra for success will be innovation all through the

day again and again.

Word Count: 1486

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Books

Bowie, D & Buttle, F (2004) Hospitality Marketing, Oxford: Elsevier Limited

Horner, S. & Swarbrooke, J. (1996),Marketing Tourism, Hospitality and Leisure in Europe. London: International Thomson Business Press.

Hossanien, A., Dale,C. and Clarke, A. (2010) “Hospitality Business Development”, UK, Butterworth Heinemann

Jones, P. & Merricks, P., (1994) The Management of Foodservice Operations. London: Cassell. C

Robert B. Woodruff, Sarah Gardial (1996) Know your customer: new approaches to understanding customer value and satisfaction. Oxford: Blackwell Publishers

Journals

Nasri, W., (2010) “Competitive intelligence in Tunisian company”, Journal Enterprise Information Management, vol.24(1), pp.53-67

Cornell Quarterly (2011) “Article of the year, Volume 51: 2010, Article of the Year Focuses on Excellence in Customer Service” available from http://cqx.sagepub.com/content/52/1/6.citation [accessed on 08/03/11]

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http://cqx.sagepub.com/content/52/1/6.citation


Websites

Euromonitor International (2009) Global Travel and Tourism: Budget Travel -Driven by Economic Uncertainty available on http://www.euromonitor.com/global-travel-and-tourism-budget-travel-driven-by-economic-uncertainty/report [Accessed on 10/03/11]

HVS and FHRAI (2009-2010) The Indian Hotel Industry Survey available from http://www.hotelnewsresource.com/article51182Indian_Hotel_Industry_Survey________.html [accessed on 02/03/11]

Valliere, S., and Balice, M., (2010) http://www.aboutmcdonalds.com/mcd/media_center/recent_news/corporate/Press_Release__McDonalds_Launches_Shrek_Themed_Happy_Meal_to_Motivate_Kids_to_Eat_More_Fruits_Vegetables_and_Dairy.html [accessed on 01/03/11]

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Essay 1500 Words