Marketing and Promotional Techniques Used by 4* International Central London Hotels - Research Paper Example

Marketing and promotional techniques used by 4* International Central London Hotels. TABLE OF CONTENTS 1 Introduction and Problem Statement 1.2 Research Objectives and Hypothesis 1.3 Review of Available Literature 1.4 Data Collections and Research Methods 1.5 Time Plan and Mile Stone 1.1 Introduction In the last two decades there have been major changes in the broader economic environment resulting from increasing globalization, deregulation, increased competition and specialization of industries (Lovelock & Wright) cited in Kotler (2002). This has lead organisations to adopt varying methods such as cooperative agreements and alliances thus shifting competition from stand-alone to networked rivalry (Johnson et al. 2005). The marketing mix has its origin in the marketing of goods for consumer markets and consists of the well known 4P's: Price, Promotion, Place, and Product. With increase service activities, it is but vital for this four Ps to be addressed within the service sector. For the greatest communication impact, Kotler, (2003) argued that the entire marketing mix must be carefully coordinated for greatest success. Against this background, this research seeks to answer the following questions What are the various marketing Techniques employed by 4star hotels in London What are the motivations for adopting one marketing technique as opposed to the others by these hotels What are the effects of the different promotional techniques on the activities of 4star hotels in London 1.2 Research Objectives and Hypothesis With previous work experience and knowledge in the hotel industry, I have nested an interest in the sector, especially within the marketing department. The main objective of this paper will be to find out and evaluate the various marketing and promotional techniques adopted by four stars hotels in the London municipality. Other objectives will include To find out the motivation of adopting one marketing and promotional technique as opposed to the other by these hotels. In addition, the research will find out the effect of promotional and marketing techniques on the activities of the organisation 1.3 Review of Available Literature As the fight of market shares and quest for product success continue, marketers are employing all the necessary tactics, and methods to give their product a break through, or remain competitive (Brennan, Baines, and Garneau, 2003, Rowley 2004). According Kortler (2002), the marketing communication mix or promotional mix involves specific mix of advertising, personal selling, sales promotion and public relations a company uses to achieve it advertising and marketing objectives. The five major types of promotion are:- Advertising Personal selling Sales promotion Public relations Previous research has shown that consumers often use their existing perceptions of a brand to evaluate new offerings such as product or line extensions (Aaker and Keller 1990). Because it appears similar to the original brand, consumers will then transfer attributes of the original brand to the brand imitator, thereby affecting evaluations and purchase decisions. These attributions include, but are not limited to, product quality, performance, reliability, and origin (d' Astrous and Gargouri 1999). Francesca Sterlacci, a fashion designer, who heads the fashion design department at New York's Fashion Institute of Technology, says that copying is simply a way of life (Karr 2003). In a recent website interview Sterlacci admits that it is "expensive and risky to actually create new designs, and much cheaper and easier to simply knockoff a successful one" (Karr 2003). The goal of service companies is to add value to their customers which is a prerequisite for customer satisfaction. But in order to meet customer needs, it is first of all necessary to understand what their needs are. In a second step, services need to be designed and developed, which fulfill the requirement of adding value to customers. Payne and Clark (1995) point out that "customer service can be regarded as a process which provides time and place for the customer, and which also involves pre-transaction and post-transaction considerations relating to the exchange process with the customer"(p.357). They propose a particular model for approaching customer service. Promotional Techniques Still, the expanded marketing mix suggested by Booms and Bitner (1981) has been considered to be a valuable tool for marketing service. Payne and which leads to their expanded marketing mix for services. Figure 1: The 7P's Model Source: Payne and Clark, 1995 Payne and Clark (1995) argue that the traditional 4P's model is insufficient for service marketing because it does not consider the complexity of services. In addition, the 4P's model does not take into account the prevailing interrelations in service businesses. The expanded model can be utilized for service marketing sue to its cross-functional character and thereby is typically more concerned with "keeping the customer (relationship marketing) than catching the customer (transaction marketing)" (Payne and Clark, 1995, p.339). Having identified the expanded marketing mix as an important concept for strategic service marketing, it appropriates to address the three additional elements: People, processes, and customer service. However, in the previous chapter the human factor in service organization has been elaborated upon, and will therefore not be discussed in this section. Next processes and customer service will be investigated. Impact of Services: Much of the service literature around today talks about trying to maximise customer satisfaction. The emphasis for focus on customer satisfaction is the belief that this satisfaction will transpire into customer loyalty and then customer equity, (which we are looking to increase) which is the 'Total discounted lifetime value of all of its customers' Customer equity will increase as customers' loyalty intentions increases, but how can service firms achieve customer satisfaction The answer is service quality. Figure 3the behavioural and Financial Consequences of service quality This diagram by Thorpe, Payn (1995) highlights the consequences that service quality can have for the firm. With superior service Fisk, Brown and Bitner (1998) identified that the behavioural intentions are favourable and thus customers are more likely to remain with the firm. Consequently with greater customer retention not only are costs reduced, because service firms do not have to spend so much on gaining purchases, but customer equity is also likely to increase. This is due to the pertinent link between increasing loyalty of customers and increasing their lifetime value to the firm. However, this will only happen as long as firms have measures in place to make sure that the most valuable customers are retained and unprofitable customers are abandoned. As Kanwar states that 'The need to layer customer metrics on top of traditional brand metrics will soon become imperative.' History and Evolution of Services In the literature there has been a tremendous number of publications dealing with the marketing and management of services. Fisk, Brown and Bitner (1998) state that the development of service marketing and management can be divided into three phases. First, there is the "Crawling-Out Phase" from 1950 to 1980, when only a few researchers made efforts to distinguish between marketing strategies for goods and services. These few researchers proclaimed that services are different from goods, and therefore need specific marketing and management attention. In her article "Breaking Free from Product Marketing" Gronroos (1981), demanded further research interest in services. She states that the traditional marketing and management theories do not provide relevant tools for the characteristics of services. This critique has been accepted later by academicians and practitioners. Second, in the so called "scurrying-Out Phase" from 1981 to 1985, further concentration on the marketing and management of services took place. With significant publications from Gronroos (1981), Berry (1980), Gronroos (1981), and Devlin, &.Dong (1994), marketing and management of services received the right to be considered as an independent discipline. During this period several articles were published in some of the best known journals, i.e. Journal of Marketing, Journal of Retailing, and Harvard Business Review. New service specific journals also emerged, for instance the Journal of Services Marketing and international Journal of Service Industries Management. There have been strong efforts to develop marketing and management tools which are applicable to improve services. As a consequence, relationship marketing (Berry 1983) and internal marketing (Gronroos 1981) have their roots in the intense research of the service sector. Finally in the "Walking-Erect Phase" from 1986 until today the number of contributions in books, articles and dissertations has increased explosively. Efforts have been undertaken in order to improve the understanding of the heterogeneity of services, designing and controlling intangible processes (Fisk et al., 1993). Bateson (1999) went further and states that, the emerging interest in services can be labeled a new service paradigm from the marketing discipline's traditional focus on marketing purely physical goods. The three Dimensions of the Service Encounter Feedback Translation Translation Source: Schwenner, 1995 In the service encounter, there is first of all the service task that explains why the service exits in the marketplace and what the customer expects from the service. It can also be called the "voice of the customer". Second, the service standards which define what effective service provision are to the customer and thereby refer to controls, the quality, and cost efficiency in the service firm. In addition, the service delivery system which specifies how the service is produced, including how it is controlled for quality, cost, and customer satisfaction, Piercy, (1995) argues that the service delivery system need to be coordinated with the other two dimensions in order for service encounter to be strengthened when those three dimensions are mutually consistent. Concerning the interaction between the service provider and customer, Bitner & Hubbert (1994) developed a comprehensive model to explain the impacts of the physical surrounding and participants, the so called front-line employees in service companies, during the service encounter. She points out that service companies, during the service encounter. She points out that service companies should manage and control every single service encounter because this is the period of time which has most influence on the customer's evaluation of the provided service product. 1.4 Data Collection and Research Methods The research will be in the form of a case study, focusing on four of the United Kingdom four stars hotels. One hundred open ended questionnaires will be randomly distributed to front line managers, and senior management of these four hotels. The aim of the proposed study is to analyse the various forms of marketing and promotional techniques used by four stars hotels in the London area with the hotels segmented by the number of years they have been in business. To effectively do so, the researcher requires an adequate sample. Given the scope of proposed study and the requirements of the program, the researcher will administer 100 open ended questionnaires for the front line managers and conduct semi structured interview questions designed and administer to senior management of each of the hotels. Thus, the target sample will be four of the four stars hotels. Qualitative studies build theories from the research by identifying patterns and broad relationships in the rich, descriptive data (Pidgeon and Henwood, 2004, bryman & Bell 2004, Burton 2000). The responses of each interview will be transcribed by the researcher. The researcher will conduct thematic coding and content analysis using MS Word to examine patterns between and within each interview. This will be compared to the results of previous studies. To improve the quality and accuracy of the research, deviating viewpoints as well as converging patterns will be highlighted (Barbour, 2001) Research Plan and Milestone Proposal Timescale and Milestone. This proposal is develop under the assumption that the thesis will be completed within one month. In the event of adjustment, the dates should be shifted forward. Where X = ONE Day, XX= TWO Days XXX= THREE Days Activity Week1 Week2 Week3 Week4 Mile stone Proposal Submitted x Proposal accepted Finalisation of introduction, problem statement and objective of study x Chapter one completed and approved. Reading of existing literature, initial contact with sample institutions x xx Literature review completed Finalisation of research methods, administration of questionnaires and conducting interview x xx All questionnaires dispatched and interview administered Data collection and data entry xxx Data ready for analysis Discussion with supervisor and data analysis and presentation x Submission date agreed upon and go ahead received for presentation Report writing xx Typing of report Report submission for review x Final copy of report submitted for supervisors review Correction and presentation of final report X Well Done Assumptions Weekly one-hour meetings with supervisor 14 day maximum turnaround time for supervisor 14 day maximum turnaround time for the researcher Contingencies of Research Plan Plan to submit after six weeks leaving 14 days for unexpected delays and issues References Barbour, R. (2001) Checklists for improving rigour in qualitative research: A case of the tail wagging the dog BMJ, 322, pp.1115-1117, accessed 26 March 2006, updated 7 June 2001, http://bmj.com/cgi/content/full/ 322/7294/1115. Bateson, John E G: Managing Service marketing, 4th ed . Dryden Press, Fort Worth, USA, 1999 Berry, L.L.,A. Parasuraman(1991): Marketing Service: Completing Through Quality,The Free Press, New York. Berry, L.L.,A. Parasuraman(1991): Marketing Service: Completing Through Quality,The Free Press, New York. Bitner, M.J., A.R.Hubbert(1994): Encounter Satisfaction Versus Overall satisfaction Versus Quality: the consumer's voice, in R.T. Rust Oliver(eds.),Service Quality: New Directions in Theory and practice, sage Publications, Thousand Oaks, CA. Bryman, A. and Bell. E: (2004)Business research methods. Oxford University press, 2003 Burton, D. (2000): Research Training for Social Scientists, a handbook for postgraduate researchers, edited by Dawn Burton. Sage Publications Ltd, Great Britain. Devlin, S.J., H.K.Dong (1994) Service quality from the customer perspective, Marketing Research: A Magazine of Management and Applications, Vol. 6,No. 1,pp.5-13 Fisk, R.P., S.W.Brown, M.J.Bitner (1993): Tracking the evolution of the services marketing literature, journal of retailing, vol. 69, no. 1, pp.61-103 Gronroos, C. (1990a): Service management and marketing: managing the moments of truth in service competition, Lexington Books, Lexington. Johnson G., Scholes K., Whittington R. (2005), Exploring Corporate Strategy. Prentice Hall, Financial Times, Kortler, P. (2002)A framework of Marketing Management. 2nd ed. Published by Pearson education, Inc. Lovelock, C.H., & Wright, L., (2nd edition) Principles of service marketing and Management, Prentice Hall, Upper Saddle River, NJ, 2002 Payne , A. (1993): The essence of Services marketing,Prentice-hall, Hemel Hempstead, UK Piercy, N,F, ( 1995): Customer Satisfaction and the internal market, marketing our customers to our employees, journal of marketing practice, applied marketing science, Vol. 1, no, 1,pp. 22-44 Pidgeon, N. and Henwood, K. (2004) Grounded Theory, Handbook of Data Analysis, Hardy, M. and Bryman, A., SAGE, London. Rowley J (2004) Just another channel Marketing Communications in e-business, Marketing Intelligence and Planning, Vol 22, no 1 Read More