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 Marketing strategies in hospitality and Tourism sector................................................................1

1.2 Role of Network and Customer Relationship marketing strategies for hospitality or tourism

organizations...........................................................................................................................................3

1.3 Customer loyalty strategies for Hospitality and Tourism organization........................................5

2. Marketing communication strategies for Hospitality and Tourism organization........................7

2.1 Use of Marketing Communication to develop Brand...................................................................8

2.2 Effectiveness of E-marketing, Guerilla marketing and viral marketing strategies within

Hospitality and Tourism organization......................................................................................................8

2.3 Recommendations for Marketing Communications Strategies..................................................12

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 (L’Etang, 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 consumer’s

needs and problems. Through this process of interaction, company can know the

specifications of the product and services desired by the potential customers and

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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 customer’s 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, E-

marketing, 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 celebrity’s to

promote their sales. Many hotels like InterContinental Hotels Group and Hyatt

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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 P’s 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 today’s 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 (E-

marketing, 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

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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 company’s 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

today’s 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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