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Hospitality Industry Management - Essay Example

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It means establishing a new branch of Ku-De-Ta hotels would require assessing the number of customers to for clear assessment (Alter, 2000). Similarly,…
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Hospitality Industry Management Bargaining Power s Number s in the Market s in Scarborough beach, Perth, Western Australia are critical of price changes because of numerous factors. It means establishing a new branch of Ku-De-Ta hotels would require assessing the number of customers to for clear assessment (Alter, 2000). Similarly, recommendations should evaluate the overall implications of other substitutes.
Availability of Substitutes
Substitutes deal with the RFM (customer value) analysis that attempts to comprehend how customers react to new products (Wearne and Morrison, 2011, 111). This is supported by the bargaining leverage that assist in reducing high fixed costs that characterise most of Ku-De-Ta Hotels around Perth in Western Australia.
According to (Chon and Maier, 2010, 479) these substitutes often affect buyer alternatives because they are unable to choose between two services offered by hotels of the same standards.
In their analysis, (Elliot et al 2012, 94) agree that Ku-De-Ta Hotels should assess the consequences of total customers in relation to other substitute products offered by rival hotels. It means they should introduce incentives for retaining loyalty program. This will limit the buyer alternatives enjoyed by most customers.
Threat of New Entrants
Economies of Scale
Another significant implication involves expansions of economies of scale because of rigid government policy. Australia has complicated legislations of conducting business that often affect industry profitability. Consequently, (Gordon, 2012, 125) believes Ku-De-Ta Hotel deserve to invest in product differentiation to establish a strong brand and customer loyalty.
Brand Loyalty
In brand loyalty, threats should be averted by accessing equal distribution of products and services in the new market. It should also invest in modern modes of advertising such as the use of Facebook, Twitter, or blogs to establishing lasting rapport with middle-class clients frequently using technology (Knight, 2013, 114).
Capital Requirements
However, this is only possible by having adequate capital requirements to sustain industry profitability that usually balances the absolute costs of conducting business. Accordingly, (Morrison 2002, 123) assert that capital requirements could be solicited through loans or savings.
The entry of new entrants will lead to low threats because of setbacks such as expected competition and low cost benefits. Ku-De-Ta Hotel also has an edge over others because of its feasible location proves it difficult for new entrants (Knight, 2013, 124).
Threat of Substitute Products
Switching Costs
In switching costs, Ku-De-Ta Hotel is faced with the threat of their rivals who offer substitute products and, thus, interfere with customer loyalty. This suggests that customers are susceptible to alternatives such as identifying hotels that have warm water instead of cold water. It, thus, is upon Ku-De-Ta Hotel to maintain its tradition of business to retain market propensity (Perreaul et al., 2011, 79).
Buyer Loyalty
Understanding buyer loyalty means evaluating how substitutes affect profits and the hotel’s potential of moderating its prices to achieve relative performance. In their perspective, Reid and (Bojanic, 2006, 137) hotels should derail customers’ propensity and, thus, ensure product standardization in the new market. Conversely, perception of buyers in Scarborough beach is upon the Ku-De-Ta Hotel during its marketing.
Therefore, in attempting to create a balance switching costs and buyer loyalty, Ku-De-Ta Hotel should integrate the use of online marketing to attract new customers. As a result, the hotel industry will significantly reduce quality depreciation that often causes buyer switching costs (Sharp and Sharp, 1997, 475).
Alter, Suita Kim. 2000. Business Planning Reference Guide for Social Enterprises. (Accessed on 12 April 2014)
Chon, Kaye and Thomas Maier. 2010. Welcome to Hospitality. 3rd ed. USA: Delmar.
Elliot, Greg et al. 2012. Marketing. 2nd ed. Australia: John Wiley & Sons Australia, Ltd.
Gordon, Ross. 2012. Re-Thinking and re-tooling the social marketing mix. Australasian Marketing Journal 20(2): 122-126
Knight, Peter. 2013. Site Visit Interview of Peter Knight, interview by Curtin students, September 2nd , transcript, Pan Pacific, Adelaide Terrace, W.A.
Kotler, Phillip and Armstrong, Gary. 2010. Principles of Marketing. 13th ed. Boston: Pearson Education, Inc.
Morrison, Anderson. 2002. The marketing Plan and 8P’s. Hospitality and Travel Marketing. New York: Delmar Thomson Learning.
Perreault, William D., Joseph P. Cannon, and E. Jerome McCarthy. 2011. Basic Marketing: A Marketing Strategy Planning Approach. New York: McGraw-Hill.
Reid, Robert D. and David C. Bojanic. 2006. Hospitality Marketing Management. 4th ed. Canada: John Wiley & Sons, Inc.
Sharp, Byron and Anne Sharp. 1997. Loyalty Programs and their impact on repeat-purchase loyalty patterns. International Journal of Research in Marketing 14(5): 473-486.
Wearne, Neil and Morrison, Alison. 2011. Hospitality Marketing. New York: Routledge. Read More
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