The Luxury Food Service Industry - Essay Example

?The Luxury Food Service Industry Introduction Marketing concentrates on the most fundamental necessities of companies to identify s, their needs and preferences, and to analyse their attitudes to promotion and other factors that influence their purchasing decisions; it also focuses on what influence them to buy products and services from the firm rather than a competitor (CIM, 2009). This report concentrates on the marketing tools that build the element ‘luxury’ within the services industry. The study will examine, evaluate and analyse the strategies employed in the context of a service orientated market, and where competition and success is primarily based on providing a “customer experience”. The selected three different venues from the high end food service industry based in London are Jumeirah Carlton Tower, Radisson Edwardian Hotel, and the Langham London. This assignment tends to analyse the marketing strategy for these three choices. Jumeirah Carlton Tower: The luxury, five-star Jumeirah Carlton Tower Hotel is located in the heart of Knightsbridge. The demographical advantage which makes the Jumeirah one of the most preferred hotels is its location within the walking distance of Harrods and Harvey Nichols department stores and the exclusive designer boutique of Sloane Street. Moreover, the highlighting points that make Jumeirah Carlton Tower one among the most chosen is that it has been voted Europe’s leading Business Hotel 2011 at the World Travel Awards; top three best hotels for service in the UK in the Conde Nast Traveller Gold List 2011 and 4th place for Best UK Business Hotel in the 2010 Conde Nast Traveller Readers’ Travel Awards (Jumeirah Carlton Tower, n.d). Radisson Edwardian Hotel Radisson Edwardian Hotel is located at the very heart of London’s theatre land, a five-star hotel of a Leicester Square landmark. The hotel is with the accent on contemporary elegance that has the potential to drag the customers into it. The luxury fabrics and muted shades of the individually designed rooms are much liked for its calming and comfortable experience. Moreover, the hotel’s warmth and hospitability belies the red-carpet glamour of its location. In the same way, the Hampshire Bar and Restaurant buzzes suits well for al fresco dining on the square. Today, the hotel has become a part of the Green Tourism business scheme and has received the Silver Award, which proves that it is working well with the high standards set by Green Tourism (Radisson Edwardian Hotels, 2011). The Langham London The Langham London is a renowned luxury hotel situated in London with more than 140 years of history. Guests can discover its 380 luxurious guestrooms and suites, 15 function rooms and the dazzling Palm Court, a place known for the tradition of afternoon tea. The hotel remains high having enchanted royalty, dignitaries, and celebrities since 1865, when the first grand hotel was opened in Europe by the firm. The Langham Hotel London continues to impress the potential travellers with its legendary ‘service with poise’ (The Langham, n.d). The well celebrated history and renowned reputation of the obviously fine company make it different from other everyday London hotels. Moreover, it offers impeccably luxurious surroundings on Regent Street, one of the city’s premier locations. Service Marketing Mix The service marketing mix, also known as an extended marketing mix is an essential element of a service framework design, which comprises of 7 P’s as compared to the 4 P’s of a product marketing mix. In other word, the service marketing mix presumes the service as a product itself, but adding 3 more P’s which are required for optimum service delivery. (Source: Bhasin, 2011) Product – The product in service marketing mix is intangible in nature, which cannot be measured like the physical products such as soap or toothpaste. Tourism industry or the luxury food industry can be an excellent example. At the same time, service products are diverse, unpreserved, and cannot be owned, which are therefore need to be designed with care, through a service blue print clearly and specifically defining the service product. For example – a luxury food industry blue print will be prepared before establishing a restaurant business. This service blue print predicts accurately how the product is going to be. The three luxury hotels focus on their products and services they offer according to the anticipated customer demands and customer requirements. Moreover, the London markets have been always potential for the luxury food industries. Place - Place in case of services industry is considered with the location where the service product is going to be placed. For example, a highway or a city would be the best place to open up a petrol pump rather than in a place where there is less traffic. As discussed above, London has been a good place for the luxury food industries. The above illustrated information about the three firms proves that London has been a prosperous market place for each of them. Promotion – Promotions have become a critical factor in the service marketing mix as they can be easily duplicated with its ability to set a service brand apart from its counterpart. Likewise, competitions in the service sector are often high and promotions are essential for the firms to survive (CIM, 2009). Thus the food industry especially has adopted different promotional strategies to survive competition. The important promotional techniques used by luxury food industries to attract more customers include providing additional benefits to the customer like health care schemes, entertainment facilities, airlines and travel facilities, etc. Pricing – Pricing in the case of service industry is more complicated than that of product. In the case of a restaurant owner, he can price people only for the food he is serving, and not for the nice ambience built up, or the band for music. Therefore, the important elements that must be taken into account while the process of pricing is carried out in a luxury food industry involve labour, material cost, and overhead costs. Hence, food industries must use proper pricing strategies to overcome the issues of pricing. People – People is the significant element of service marketing mix that define a service. In the case of a food industry, it is the chef and the service staff team that define the business. Since the element of people has greater significance, companies like the Langham London and Radisson Edwardian Hotel have focused more on getting their staff trained on interpersonal skills and customer service that in turn would ensure maximum customer satisfaction. Process – Service process is the manner and method in which a service is delivered to the end customer. The luxury food industries take additional care in meeting the requirements of the customer at the maximum speed. Hotels like the Jumeirah Carlton Tower concentrates on delivering its services with utmost importance without losing its quality. Physical Evidence – Finally, the physical evidence in the service marketing mix is a significant element, which provides the customer with tangible elements of service to create a better customer experience (Continuum Learning, n.d). Physical evidence can be well explained in the case of food industry. For instance, customer normally choose a hotel which has ambient lighting, nice music, good seating arrangements and good food rather than a hotel that has only chairs and tables and good food. Thus the physical evidence has a greater role to play in the luxury food industry. The following photographic evidences clearly show how important the physical evidence is to each of the selected luxury hotels: Jumeirah Carlton Tower: Radisson Edwardian Hotel: The Langham London: The Luxury Factor Jumeirah Carlton Tower Being synonymous with sophistication and luxury, Jumeirah Carlton Tower offers the customers the comfort of 216 rooms with five star accommodations. The five-star hotel is situated overlooking the private gardens of Cadogan Place with spectacular sight of London’s skyline. The luxury factors of the hotel offer the most modern communication tools like the complimentary Wi-Fi and high speed internet access to the residents’ rooms. The residents can have the luxury of three restaurants; The Rib Room, Chinoiserie and Club Room. The hotel offers Peak Health Club and Spa with facilities including fully equipped gym and 20 meter indoor pool. Besides, it offers a classy cocktail lounge, called Gilt. The luxury suite of the hotel is exclusively designed by world famous interior designer Kaun Chew, and the suites reside on the top floors of the hotel with spectacular view of the London Skyline from the balcony. Each suite of the hotel symbolizes a glamorous retreat with luxury key to experience. The Jumeirah hotels offer a wide variety of restaurants and bars through its luxury hotels. Customers feel the luxury experience whether it is traditional British cuisine, a dining al fresco al Terrace or enjoying a healthy buffet. The hotel is equipped with nine flexible function rooms that are bathed in natural light, providing and exclusive venue for up to 670 guests (Jumeirah Carlton Tower, n.d). Radisson Edwardian Hotel The luxury factors of the Radisson Edwardian Hotel include the five function rooms that can accommodate up to 100 people. It also facilitates a dedicated conference team with all the modern AV and communications equipments, ensuring the success of customers’ events in the central avenue (Radisson Edwardian Hotels, 2011). It offers a complimentary wireless internet connection throughout the hotel with in-room broadband/modem internet access. Every single room and the conference rooms are air conditioned with satellite TVs and complimentary DVD players in each room. There are also other facilities like direct dial number with voicemail, in room safe, in room bar, gym, in room spa treatment, etc. The Langham London The most liked luxury element is its impeccable five-star luxury accommodation with comprehensive facilities for meetings and events. The hotel enhances Wi-Fi throughout the public areas, and complimentary high-speed internet access in the business centre together with a 24-hour IT support for the customers. Each room is equipped with 32” flat-screen television with cable and satellite television programming (The Langham, n.d). Moreover, all the three hotels enhance the luxury factors of valet parking, 24 hour reception, gymnasium, indoor pool, telephone in each room, wake up call, Wi-Fi availability in rooms, and music and movie channels, etc. Customer view Jumeirah Carlton Tower Customers find the Jumeirah Carlton Tower to be the first among their choice as they find the stylish superior rooms contemporary in design and perfect looking for relaxation. The superior quality rooms are much larger and offer all the luxuries. In the same way, the junior suites are also preferred by the customers as they have studio style living. The spa suites have been exclusively designed to call relaxation and calmness. The hotel holds the unique feature of egg-shaped free standing bath with inset TV and walk-in rain shower. The professionals who seek for a place to conduct their business often chose Jumeirah Carlton Tower as its elegant versatile rooms are perfect for events ranging from boardroom meeting to cocktail parties, and from corporate Christmas parties to weeding celebrations. Moreover, the potential customers are attracted towards the various dining offers and weekend packages offered by the hotel. Radisson Edwardian Hotel The great customer support is the great element behind the success of the Radisson Edwardian Hampshire. They are attracted towards the five-star hotel which offers 127 highly decorated bedrooms with beautiful English fabrics and marble bathrooms. Moreover, the hotel gives a great customer experience through its uniquely decorated suites with designer furnishings that offer a panoramic view of the capital and a genuine luxury London hotel experience. The residents have the advantages at the luxury hotel of utilizing the business centre, fitness centre and also the complimentary wireless internet access. For the advantage of its customers, the hotel has several airline and partner loyalty programmes. The Langham London For many of the customers, the reason behind choosing the hotel is its internationally-renowned Chuan Spa, designed to captivate the senses with treatments mixed in the values of traditional medicine. The health club also provides fully equipped fitness centre with state-of-the-art Technogym cardio and resistance equipment. Moreover, Langham is ideal for meetings, conferences and events, which make many to choose it for the gathering with business associates or family and friends in the luxury hotel within opulent surroundings that commemorate a classical aesthetic feel. Strategies used by Luxury food industries The business environment of a service industry includes all the external influences that impact its decisions and performance. It is not an easy task for the managers to effectively monitor and analyse the external factors. The managers make use of various technical tools to analyze the external factors like political, economic, social, and technological factors that affect the operations of the business. Here, on considering the luxury food service industry, the first prerequisite for an effective environmental analysis is based on the primary principle of the industry; that is to make profit. For that the firm must be able to create a value for customers, which requires a clear understanding of the customers first. In the same way, to create value for the firm, the firm should understand its vendors and suppliers who provide the required goods and services for the firm, thereby creating effective business relationships with them. Moreover, the firms’ aptitude in creating profitability from value-creating activity is depended on the amount of competition faced among other firms who search for same value-creating opportunities in the market. And so, it is essential for the firm to understand its competitors too. Therefore, the core elements of each firm in the luxury food business environment or industry environment are based on its association with the three significant agents: customers, vendors, and competitors. Furthermore, the macro-level factors such as general economic trends, social and political trends, and changes in demographic structure are the critical factors for analysing what the firm is going to face in the future. As already mentioned, the primary objective of the firm is to create value for the customer through services. Value for the customer is created when the price that the customer is willing to pay is more than the cost spent by the firm. This is done when the surplus of the value over cost is apportioned between our customers and the firm by the forces of competition. When the competition within the service industry gets stronger, the customers get more of the surplus in the form of consumer surplus, which indicates the variation between the price that actually paid by the customers and the highest price they would be willing to pay. Company view On our interview with one of the members from the board of The Langham London, he said that the firm expects 2012 to be a good year for the firm, and the firm anticipates meeting the high expectations and hopes of all customers. It is expected that the firm will be going in to 2012 with some levelling off but with greater trading with the Olympic and Paralympic Games all in the same quarter. Moreover, he added, outside the quarter period, especially in the shoulder periods, the firm remain concerned about the reduced demand, and the above average room supply would sustain in the firms trading. Competitors’ planning for a short-term price hiking during the Olympic season will only worsen the customer demand once the season is over. He further stated that, amidst many uncertainties about the coming year, the firm has decided a potential range of extra visitors and replacements and the additional room nights required to meet the customer demand during 2012. The firm also counts the UK hotels forecast 2011 and 2012 while calculating the anticipated customer demand for the coming year. The UK hotels forecast 2011 and 2012 reveals the following estimates of extra Olympic visitors and night rooms. Estimates o Extra Olympic visitors, visitor and room nights Scenario Extra visitors (foreign and domestic, excluding displacement) Extra visitor nights (000’s, including displacement) Extra room nights (000’s including displacement) High Scenario 908,440 4,900 3,400 Mid Scenario 660,000 2,400 1,800 Low Scenario 450,000 1,700 1,200 (Source: the PwC Hospitality Directions Europe series, 2011) According to the opinion of the board member, the firm’s forecast for the Olympic “effect” in 2012 is based on the estimated number of visitors to attend the Olympics and the number of displacement occurring due the Olympics (that is the number of people avoiding London due to the Games). This is indeed a factor of uncertainty and from the experiences we know that Olympic city always struggles to estimate demand, with overestimating the extra arrivals, often with a greater margin. Therefore, the firm concentrates more on accurately and precisely predicting the exact scenario. Findings & Recommendations Marketing always concentrates on the most fundamental necessities of companies with intent to identify its potential customers, their needs and preferences. The luxury food industries in London can make use of the marketing tools to boost up the quality of service they provide, by implementing effective service marketing strategies. The revised RevPAR growth for London showed 8.9% in 2010 and 9.3% in 2011, giving a better finish than what was expected while reflecting harder comparatives and above average levels of new supply (PwC Hospitality Directions, 2011). Therefore, the luxury hotels like the Langham London and the Radisson Edwardian Hotel can make use of various marketing tools concentrating on the 7 P’s of service marketing in order to expand their service demography and thereby increasing the customer experience. Moreover, for the Olympic year, London is anticipated to provide another good set of results and the provinces are also expected to have some reasonable growth, showing an additional 4.3% RevPAR growth for the year as a whole (PwC Hospitality Directions, 2011). This would be a great advantage for the luxury hotels like the Radisson Edwardian to take advantage of the boon in the market. References Bhasin, H 02 January, 2011, ‘Services marketing mix’, Marketing91.com, Viewed 19 November 2011, CIM: The Chartered Institute of Marketing, 2009, ‘Marketing and the 7Ps: A brief summary of marketing and how it works’, pp.1-9, Viewed 19 November 2011, Continuum Learning, n.d, ‘7Ps of services marketing’, Continuum Learning Pte Ltd, pp.1-4, Viewed 19 November 2011, Jumeriah Carlton Tower, n.d, ‘Jumeriah Carlton Tower: The essence of Knightsbridge’, Viewed 19 November 2011, The Langham, n.d, ‘The Langham London, the original grand hotel’, Viewed 19 November 2011, The PwC Hospitality Directions Europe series, March 2011, ‘UK hotels forecast 2011 and 2012: How big a party for hotels in 2012?’, pp.1-27, Viewed 19 November 2011, < http://www.instituteofhospitality.org/news/april_issue/uk_hotels_forecast> Radisson Edwardian Hotels, 2011, ‘Hotel services’, Viewed 19 November 2011, Appendix Interview Following is an extract from the interview we had with Mr. Sherman Butcher from the management of The Langham London. Interviewer : What The Langham London hotel and its long backed history offers its customers to stay put in with the company? Mr. Butcher : The Langham London is a renowned luxury hotel situated in London with more than 140 years of history. Our guests are offered the chance to discover our 380 luxurious guestrooms and suites, 15 function rooms and the dazzling Palm Court, a place known for the tradition of afternoon tea. Our hotel remains high having enchanted royalty, dignitaries, and celebrities since 1865, when the first grand hotel was opened in Europe by our company. Moreover, The Langham London continues to impress the potential travellers with our legendary ‘service with poise’. The well celebrated history and renowned reputation of the obviously fine company make it different from other everyday London hotels. And we offer impeccably luxurious surroundings on Regent Street, one of the city’s premier locations. Interviewer : What do you think the company is going to face during the coming years? Mr. Butcher : We expect 2012 to be a good year for the firm, and the firm anticipates meeting the high expectations and hopes of all customers. It is expected that the firm will be going to 2012 with some levelling off but with greater trading with the Olympic and Paralympics Games all in the same quarter. Furthermore, outside the quarter period, especially in the shoulder periods, we remain concerned about the reduced demand, and the above average room supply would sustain in the firms trading. Interviewer : Do you think that the luxury food service industry is getting more and more tightened in this decade of competition? And what changes your company has made to meet such adverse situations? Mr. Butcher : In fact, some of our competitors plan for price hikes coming years. However, competitors’ planning for a short-term price hiking during the Olympic season will only worsen the customer demand once the season is over. Nevertheless, amidst many uncertainties about the coming year, we have decided a potential range of extra visitors and replacements and the additional room nights required to meet the customer demand during 2012. We also count the UK hotels forecast 2011 and 2012 while calculating the anticipated customer demand for the coming year. Interviewer : And how are you going to meet the peak time of Olympic year? Mr. Butcher : Our forecast for the Olympic “effect” in 2012 is based on the estimated number of visitors to attend the Olympics and the number of displacement occurring due to the Olympics, that is the number of people avoiding London due to the Games. This is indeed a factor of uncertainty and from the experiences we know that Olympic city always struggles to estimate demand, with overestimating the extra arrivals, often with a greater margin. Therefore, we concentrate more on accurately and precisely predicting the exact scenario. Interviewer : What marketing strategies the firm is going to make in order to obtain the maximum “customer satisfaction”? Mr. Butcher : We, like any other luxury food industries in London, make use of the marketing tools to boost up the quality of service we provide, by implementing effective service marketing strategies. The revised RevPAR growth for London showed 8.9% in 2010 and 9.3% in 2011, giving a better finish than what was expected while reflecting harder comparatives and above average levels of new supply. Therefore, we adopt marketing tools concentrating on the 7 P’s of service marketing in order to expand our service demography and thereby increasing the customer experience. Moreover, for the Olympic year, London is anticipated to provide another good set of results and the provinces are also expected to have some reasonable growth, showing an additional 4.3% RevPAR growth for the year as a whole. This would be a great advantage for the firm to take advantage of the boon in the market. Customer view - Survey The Jumeirah Carlton Tower What the customers think they are getting from the Jumeirah Carlton Tower Customers find the Jumeirah Carlton Tower to be the first among their choice as they find the stylish superior rooms contemporary in design and perfect looking for relaxation. The superior quality rooms are much larger and offer all luxuries. What motivates the customers to choose Jumeirah Carlton Tower? The junior suites are also preferred by the customers as they have studio style living. The spa suites have been exclusively designed to call relaxation and calmness. The hotel holds the unique feature of egg-shaped free standing bath with inset TV and walk-in rain shower. What value the customers of Jumeirah Carlton Tower feel they can gain? The professionals who seek for a place to conduct their business often chose Jumeirah Carlton Tower as its elegant versatile rooms are perfect for events ranging from boardroom meeting to cocktail parties, and from corporate Christmas parties to weeding celebrations. Moreover, the potential customers are attracted towards the various dining offers and weekend packages offered by the hotel. Radisson Edwardian Hotel What motivates the customers to choose Radisson Edwardian Hotel? The great customer support is the element behind the success of the Radisson Edwardian Hampshire. Customers are attracted towards the five-star hotel which offers 127 highly decorated bedrooms with beautiful English fabrics and marble bathrooms. What value the customers of the Radisson Edwardian Hotel feel they can gain? The hotel gives a great customer experience through its uniquely decorated suites with designer furnishings that offer a panoramic view of the capital and a genuine luxury London hotel experience. The residents have the advantages at the luxury hotel of utilizing the business centre, fitness centre and also the complimentary wireless internet access. For the advantage of its customers, the hotel has several airline and partner loyalty programmes. The Langham London What the customers think they are getting and what motivates the customers to choose? For many of the customers, the reason behind choosing the hotel is its internationally-renowned Chuan Spa, designed to captivate the senses with treatments mixed in the values of traditional medicine. The health club also provides fully equipped fitness centre with state-of-the-art Technogym cardio and resistance equipment. What value the customers of The Langham London feel they can gain? The Langham is ideal for meetings, conferences and events, which make many to choose it for the gathering with business associates or family and friends in the luxury hotel within opulent surroundings that commemorate a classical aesthetic feel. Read More