Opportunities in the Hospitality Industry - Assignment Example

Running head: Opportunities in the Hospitality Industry OPPORTUNITIES IN THE HOSPITALITY INDUSTRY Goes Here al Affiliation Goes Here Abstract The essay pertains to the importance of the market research in determination of consumer behavior in the hospitality industry. Opportunities in the Hospitality Industry Introduction Defining hospitality industry With expansion of world trade and traveling for business as well as pleasure, the hospitality industry in any country such as UK has acquired a lot of significance in any economy. Hospitality industry can be easily as the service industry that caters about the accommodation and other facilities for travelers in any city or village all over the world. This industry includes various categories such as cruise lines, transportation, event planning theme parks and lodging. One of the important variables for this industry is the average vacancy or usage rate. Any part of hospitality industry such as theme parks, hotels regardless of its status and restaurants try to maximize the number of visitors and the turnover of the business. Almost all businesses in this line use various avenues for increasing their business and sales. One of these ways is eWOM.  Defining eWOM and its importance for hospitality industry The full form of eWOM is Electronic word of mouth and can be defined as the customer reviews that are posted on Social Media as well as other websites. The marketing experts have studied the importance and relation of eWOM with existing and future paying customers and the relation between content of eWOMand increase in sales volume.  The main mediums of eWOM include blogs, social media sites such as facebook, pintereste, Twitter and others. This medium also includes various popular travel websites where most of the people do their bookings, chat rooms and other user-generated websites in this field. It is a fact that the hospitality business in UK must pay attention to these online reviews, as most of the potential customers prefer to check the reviews before booking of the room in any UK Hotel (Melián-González, Santiago, Bulchand- Gidumal,, Jacques and González López-Valcárcel, Beatriz (2013)). Due to this, the hospitality industry should keep the negative reviews at minimum and positive reviews at the maximum. One way with which this can be done is to contact the person who has posted negative reviews and sort out the issue.  These studies also consider some factors such as the role of volume and valence of eWOM for an increase in sales for future. The volume of reviews of any hotel affects the (RevPAR revenue per room. The valance refers to the ratio of positive review vs the negative review and has a lot of effect over business of luxury hotels. The volume refers to the number of reviews posted on relevant websites, blogs and other social media (Melián-González, Santiago, Bulchand- Gidumal,, Jacques and González López-Valcárcel, Beatriz (2013)). It is a known fact that first few reviews on any UK hotel or any other facility are invariably negative. However, it has been conclusively proved that as the number of reviews increases, so the positive tenor of the reviews and the valance of the reviews becomes balanced and negative effect of the reviews is mitigated.  eWOM and the performance in sales of UK Hospitality industry he effect of eWOM has been studied by experts in many fields, especially in hospitality marketing. With these studies, it has been proved extensively that the effect of eWOM largly depends on the customer segment or product segment.  This relationship varies as per the customer well as market segment and the characteristics of the products. These studies prove that the eWOM is used more for the reviews of high-end hotels and accommodation places than mid-range or lower end range of UK hospitality industry. Apart from eWOM, the consumer behavior and market research also play an importantpart in success of this industry. Defining Consumer Behavior Today, the consumer or customer is the main reason behind the start and end of any marketing activity all over the world. He is always kept on the top of the chain in any market. Before the determination of consumer behavior, it is necessary to understand the term consumer. This term refers primarily to two types of consumers, organizational consumer as well as final individual consumers (Kahle, 2011).  There are many differences between organizational and individual customers. The organizational buyers purchase products and services for use in organizations as well as resell to the final consumer whereas the individual users purchase products and services for personal use. Take an example, when any organization does booking of rooms in hospitality industry, it is for their designated employees or for the guests at some occasions. In the normal process, most of the individuals book rooms in any hotel for their personal or guest’s use and also for individual occasions (Writing, 2013).  The second difference between organizational and individual customers is the fact that organizations hire or purchase products and services from any industry in bulk whereas individual customers may not do that (Ali- Jeraisy, 2013).  Based upon consumer’s buying behavior on the market, the term, Consumer behavior can be broadly defined as the study of consumers who comprises individuals, organizations, groups, etc.  The study mainly comprises of the process that is used for selection, secure, using and disposal of experiences, goods, services or ideas for the satisfaction to the requirements, and it impacts upon the consumer as well as the society.  The study of consumer behavior blends various elements, which comprise economics, marketing, sociology, psychology and social anthropology. Further, it also studies the variables regarding demographics and behavioral science in efforts for understanding of individual characteristics of the customers. This study also tries to understand various types of influences in the choice of customers such as friends, family members, peer group and modern society (Kahle, 2014).  Defining Market Research Market research has become an important part of business strategy and brand positioning in hospitality industry. To get continuous success in business, it is necessary for any company to understand and determine the present and future consumer taste, their purchasing power, their desires and present lifestyle. The companies also need to understand the present and future expectation of the targeted customer group by the hospitality industry. As UK is one of the prominent businesses as well as tourist destination, for the success of UK hospitality industry, one of the best methods is the commissioning of the UK hospitality market research.  The term, marketing research can be broadly defined as the organized effort by any company or organization in any industry, such as hospitality industry for gathering of comprehensive information about their targeted customers and society in general. It refers organized data collection, then analysis by the trained analyst and their interpretation for the data regarding specific queries of the organization in any industry such as hospitality industry. The market research report gained functions as comprehensive input for creation of business strategy for increasing growth in marketing and sales of the products or services (Melián-González et al, 2013). Market research is used primarily for identification of consumer needs and aspiration both in terms of present as well as the future time period. It means that the commencement of market research is very essential to the formulation of the best possible marketing strategies of any organization. The market research offers a comprehensive overview of the environment faced by any company, especially in hospitality industry for the market.  As the main goal of any organization, including hospitality industry is to achieve maximum effectiveness as well as efficiency, it is necessary to determine the reasons behind consumer behavior such as why, where and what. Market research offers answers to these questions. There are many direct and indirect methods of market research to study UK hospitality industry and its future prospects. These methods include online surveys, telephone interviews; online customers review, etc. As most of the customers who book the rooms of hotels around UK are foreign visitors, it is imperative that the management group should focus on this group by contacting them online.  Approaches to Consumer Behavior Research There are two types of approaches to consumer behavior research 1. Traditional consumer behavior research The traditional approach to consumer behavior research can be divided into two types that are known as positivist and interpretivist approaches. Positivist Approach In this type of approach, the author can generalize the consumer actions that are based on the cause and effect. The author can test the consumer actions with empirical research and measured objectively. This type of market research is based upon Quantitative methodology and requires large samples.  Interpretivist approaches In this type of approach, the author cannot generalize the cause and action as a consumption pattern as well as behavior is unique and unpredictable. The author cannot test the consumer action with empirical research and objectively as every consumer is considered unique and different. This type of market research is based upon Qualitative methodology and requires small sample (Sahney, 2011). 2. Current Consumer Behavior Research The current consumer behavior research considers all types of human behavior and is widely known as Dialectical approach. This approach to consumer behavior research is very broad in scope and includes 4approaches that include Contradiction, Totality, Change and materialism. These approaches use both qualitative as well as a quantitative approach in the studies.  Relation of Market Research with Consumer Behavior It is a known fact that every individual is unique and different from other people and consequently, their desires, requirements, tastes differs from the others. However, still there are groups of customers in every society whose tastes and desires are homogenous and are broadly referred as the segments of the market group. The market research for any particular industry helps in identifications of particular market segments in society that are targeted by the organizations for their products as well as services. During market research, the marketers identify various market segments and determine their consumer behavior in a comprehensive manner. Then, they design their marketing strategy for the right delivery of their products and services as per the requirements and desires of the customers in the targeted market segments (Sahney, 2011). This induces the customers to purchase the products and services of that particular organization in preference to their competitors. Today, more and more organizations and brands use the current approach to market research, which is the combination of both qualitative as well as quantitative market research techniques. Quantitative market research techniques use the various techniques to gather data as well as doing analysis such as statistical tools, surveys, experiments and observation. This is one of the best ways to reach the target group for UK hospitality industry that includes domestic and foreign visitors. Qualitative market research techniques use non-statistical techniques such as focus groups, observation of consumer behavior or in-depth interviews.  Conclusion It is clear from this essay that market research plays an important and vital role in determining of the consumer behavior in any industry such as hospitality industry. With tough market and discerning customers all over the world, the industries like hospitality industries are totally dependent on the consumer behavior for its survival as well as continuing prosperity to the business. The market research offers answers regarding the why, what and where of the consumer behavior and helps in formulation of the best possible business strategy as well as brand positioning in the market. One of the best methods of understanding consumer behavior in any situation is eWOM. This method also affects the sales performance of UK hospitality industry in a very big way. The UK Hospitality industry also requires results of regular market research at the regular intervals in order to prepare for further consumer behavior of the customers in order to survive as well increase their profit in future years. References Ali- Jeraisy, Dr. Khaled Ibn Abdul-Raheman (2013) Consumer behaviour, Available at:http://d1.islamhouse.com/data/en/ih_books/single/en_Consumer_Behavior.pdf(Accessed: 14th April 2015). Kahle, Lynn R. (2014), Marketplace Lifestyles in an Age of Social Media: Theory and Methods, Edition, Routledge. Melián-González, Santiago, Bulchand- Gidumal, Jacques and González López-Valcárcel, Beatriz (2013) Online Customer Reviews of Hotels: As Participation Increases, Better Evaluation Is Obtained, Cornell Hospitality Quarterly, 54(3), pp. 274– 283. Sahney, Sangeeta (2011) Market Research and Consumer Behavior, in Indian Institute of Technology(ed.) Available at http://nptel.ac.in/courses/110105029/pdf%20sahany/Module,module-2-3.pdf: Vinod Gupta School of Management , pp. 1-12. Melián-González, Santiago, Bulchand- Gidumal, Jacques and González López-Valcárcel, Beatriz (2013) Online Customer Reviews of Hotels: As Participation Increases, Better Evaluation Is Obtained, Cornell Hospitality Quarterly, 54(3), pp. 274– 283. Writing, Alexis (2013) What are the differences between organizational and consumer markets?, Available at: mallbusiness.chron.com/differences-between-organizational-consumer-markets-641.html (Accessed: 14 April 2015). Read More