Methods in Ensuring Customer Loyalty and Positive Brand Reputation - Research Paper Example

 What Methods are Available to Today’s Hospitality Industries to Ensure Customer Loyalty and Positive Brand Reputation TABLE OF CONTENTS 1. Client Brief……………………………………………………………………… 3 2. Aims and Objectives……………………………………………………………. 4 2.1 Aim……………………………………………………………………... 4 2.2 Objectives………………………………………………………………. 4 3. Background to Study (Literature Review)……………………………………. 4 3.1 Internal Processes and Marketing Actions…………………………... 8 3.2 Knowing Current Customer Trends…………………………………. 9 4. Research Design…………………………………………………………………. 10 5. Data Presentation and Results………………………………………………….. 12 6. Conclusion and Report Evaluation……………………………………………... 13 7. References………………………………………………………………………… 14 1. Client Brief There have been considerable studies conducted which identify the importance of marketing in the hospitality industry, both domestically and across the globe. Hospitality involves such industries as hotels, restaurants, and other service-oriented companies which must cater to a wide variety of different clients with different cultural and socio-economic backgrounds. One of the main difficulties for many hospitality industries is attempting to create long-term value for customers in the hopes of creating loyalty and a positive brand image. Much of this appears to be largely affected by a company’s ability to create sound marketing strategies which leave customers with lasting, positive impressions of the business in order to make a particular brand the brand of choice and a preference over other competing company brands. This research study focuses on identifying the specific, modern marketing efforts and branding strategies being undertaken in a wide variety of different hospitality industries in order to effectively gain customer loyalty and keep these businesses profitable. There does not appear to be a specific marketing tactic which can guarantee successes in building a positive brand image or gaining long-term loyalty, however this study identified several key factors which have assisted many modern hospitality companies in satisfying clients and making their unique businesses stand out over that of competition. This research report is designed to add value to virtually any hospitality-oriented company as it identifies the most successful methods being undertaken today to build a positive brand image in the hospitality industry. 2. Aims and Objectives This research study will intend to identify what methods are available to today’s hospitality industries in order to ensure customer loyalty and positive brand reputation. Thus, this research study is largely marketing focused. 2.1 Aim The aim of this study is to help today’s hospitality industries to create a workable and profitable marketing model which can bring increased value to businesses which may be struggling with building competitive marketing and how best to reach a wide demographic of differing customers across the globe in many different marketplaces. 2.2 Objectives This study has two specific objectives: Identify what drives today’s customers to choose one hospitality industry over another in highly competitive hospitality markets. Identify the current marketing activities of several hospitality-oriented companies (case studies) in which positive brand reputation has been built as well as customer loyalty achieved. 3. Background to Study (Literature Review) It appears that one major difficulty for marketers in the hospitality industry is reaching the customer and being able to, effectively, alter their perceptions about a particular company, brand, or hospitality-oriented industry. One marketing expert clearly states, “Most people already know what they’re searching for…and you have about five seconds to convince them that you’re the ones they’re looking for” (Seth, 2008: 2). What this suggests is that clients who are looking for a specific industry, whether hotel or other tourism-based companies, already have pre-conceived ideas about a particular industry prior to actually becoming a guest or client of these businesses. This might also suggest that potential customers must be affected positively, and quickly, by using clever marketing which can alter their perceptions and make a specific company or industry stand out from competition. If customers must be responded to quickly, this would suggest that a business must first understand their customers before they can provide marketing which can make a rapid, positive impression. How, then, does a business come to understand the client in such a manner that their perceptions can be altered in just a matter of seconds? Davidson, Kegan and Brill (2004) suggest that the use of corporate logos is one positive method to make this happen under the principle of master branding. This type of branding, especially in a virtual environment where customers are looking for hospitality-related services online, consistently uses colorful or creative logo presentation in all marketing literature so that the client is given a rapid, positive impression of the business. This type of marketing is used largely in Japanese hospitality industries where the corporate name and logo is the dominant marketing feature online and in other print marketing literature (Davidson et al). This would be highly important for today’s hospitality marketers looking to create a positive brand reputation, by using creative, innovative, and colorful logos which make the company, from a visual perspective, stand out from other competition. Since it has been identified that customers make their decisions in just a matter of seconds, logos would appear to be extremely important simply in getting customers to choose a specific company. Again, how does a company understand what type of logo and other branding images will appeal to their clients? Pence (2008) offers a unique marketing model, known as the VALS 2 marketing model, which segments all potential clients and customers into specific demographic groups based on their different values and beliefs. Figure 1 illustrates the VALS 2 Model: Figure 1 – VALS 2 Model for Consumer Attitudes in Marketing Source: www.franteractive.net As illustrated by the VALS 2 Model, there are eight different market segments, some with higher resources (i.e. finance) and those who fit into lower economic brackets. There are those potential customers who are looking for excitement and action when seeking a specific hospitality industry while others might be searching to have their individual self-esteem catered to by choosing an elite, highly service-focused industry which meets their every whim. The VALS 2 Model was highly important to this study proposal because it identifies the eight different needs and values of different clients so that today’s hospitality companies can learn about which specific clients they cater to, what the client demands, and how best to align internal services to fit these needs. If potential customers, with different values, have already pre-determined what they are looking for, it would appear to be absolutely vital to create services and a philosophy of hospitality which would best fit these values. For today’s companies searching for ways to fully understand their potential customers, the VALS 2 Model would seem to be a quality launching point to create positive brand reputation and ensure long-term client loyalty. Further in terms of creating loyalty, Sindell (2001) suggests that virtually every hospitality-oriented company should seriously consider launching a customer loyalty program. The Starwood Hotel and Resort, a U.S. based business, began promoting customer loyalty programs on their online booking websites in order to make the business appear more attractive in terms of long-term cost savings for clients. Even when simply booking a room, the client immediately built reward points, known as Star Points, which could be redeemed online for discounted in-hotel food and future stays at this company (Sindell). Once again, this would seem to fit the marketing principle that customers make extremely rapid decisions when searching for potential hospitality options, therefore the loyalty program would seem to be an effective business service to give customers a positive incentive to choose one brand over another. Eager and McCall (1999) further support this idea by suggesting that such a loyalty program creates perceptions of benefit and value, therefore strengthening (quickly) a brand’s reputation. Other companies, according to Fareed (2002) create dedicated toll-free numbers and offer dedicated email addresses in order to further boost perceptions that these hospitality businesses take their clients seriously, thus creating loyalty in the process. 3.1 Internal Processes and Marketing Actions Phillips and Rasberry (2008) offer that the key to ensuring loyalty and a positive brand image is to make people feel comfortable, desired, and part of the broader family. These authors identify that this is often accomplished internally once the client has chosen a specific company to meet their hospitality needs. Some companies, according to the authors, have created a mailing list which offers special discounts to VIP customers which creates the sense of being desired and also to add even more value to the brand’s variety of services. Such a mailing list appears to have brought significant long-term value to many different hospitality brands and also gives the company much more visibility in the process. Part of this same philosophy of making clients feel welcome and desired, according to Payne (2006), is to guarantee much more face-to-face contact with customers once they have chosen a specific company to serve their hospitality needs. The business should show considerable pleasure when greeting clients and continuously ask whether or not their needs are being fulfilled (Payne). Under this philosophy, especially in hotel environments, customers have been shown to have a much higher return rate (loyalty) then other companies which do not put as much emphasis on face-to-face relationships. However, in order to guarantee more interaction between clients and staff, there appears to be a need for much more training to show staff members how best to create positive relationships without appearing to be pushy or patronizing. Beirne (2006) identifies a recent standardized service at the Holiday Inn and Hilton Hotels known as People Notice where staff are trained to go the extra mile for guests, with this training being conducted through DVDs, seminars, brochures, and other training literature (Beirne). Both hotel chains have found much higher return ratios for clients since implementing People Notice, therefore this would appear to be a solid marketing philosophy (heavy staff training) to ensure loyalty and positive brand image. Some hotel chains, also, have even trained their staff how to prospect, such as sending staff members out into local community markets to meet with consumers and businesspeople to further strengthen the face-to-face relationships as part of brand-building activities (Grant, 2003). Walkup (2002) also emphasizes that managers must be on the floor at all hospitality industries constantly so that clients know they have an advocate for their needs. Since “acquiring customers is much more expensive than keeping them” (Gilbert and Tsao, 2002: 10), this would seem to be highly important for brand-building and ensuring loyalty. 3.2 Knowing Current Customer Trends Alonzo (2006) identifies a new type of marketing known as lifestyle marketing which responds to current social beliefs for a wide variety of different customer demographics. For example, the author identifies that there are large trends in many different client groups in terms of promoting better personal health and well-being, therefore some hospitality companies offer different well-being tea samples as part of amenities, as well as offering spa and massage services, in order to give a business a more modern, trendy appeal. Williams (2006) calls this type of marketing Innovative Experience Design in which hospitality companies are moving away from traditional client relationships and more toward innovation in meeting cultural trends which will appeal to the savvier client. Mariotti (2002) calls this Value Communication which seeks to enrich lives by creating new, innovative services to appeal to social trends as a means to build a stronger brand. The Westin Hotel, a global hotel chain, has created their “Well-Being Experience” in which clients are exposed to positive, somewhat new-age messages all throughout the hotel chains and in-room in order to link personal customer lifestyle with brand reputation, offering clients a means to avoid stress and to appeal to those yearning for escape (Mendez, 2008). These would also appear to be rather low-cost methods of advertising at the same time. 4. Research Design A research philosophy “describes our ontological assumptions about the nature of reality” (Maylor and Blackmon, 2005:155). This professional assumption would seem to highlight that the theoretical is not often in-line with events which occur in real-life. Therefore, in order to get to the root of what is actually occurring in today’s hospitality industries, and what consumers actually demand, this research study will be largely qualitative in nature. Qualitative research, according to Henslin (2003), examines behaviors and beliefs and attempts to draw actual meaning from interpretation and observation. Because this study is desk-based, and must rely on the previous research studies and theoretical positions of other researchers, there will be a certain amount of interpretation which must occur based on these previous research results. This proposed study will make use of secondary literature which has utilised questionnaires and personal interviews, in several different hospitality-oriented businesses, to uncover which specific marketing methods have met with failure in building customer loyalty and in brand-building efforts. This research study will examine a wide variety of different secondary literature, such as books, journals, and case studies, which have highlighted various questionnaire and survey distributions to various restaurants and area hotels, with reliable target sample populations of respondents, which have asked questions about current marketing strategies as well as historical marketing which may/may not have met with hospitality industry successes. Drawing on the theoretical and case study marketing concepts from this proposal’s review of literature, questions about logo presentation, understanding client needs, messages and communication, as well as internal staff philosophies will be highlighted in order to refute or support these theoretical concepts in terms of whether they can be deemed effective, positive brand-building efforts or whether they can actually meet with higher loyalty ratios than other marketing possibilities. The researcher will draw on other relevant literature, such as psychology texts and hospitality-oriented journals, in order to interpret and analyse responses to both research instruments. This will guarantee higher levels of validity and reliability, as these studies will have been peer-reviewed and constructed against professional, relevant literature to highlight known marketing efforts used in these industries. Further, a wide variety of different sociology-oriented texts and journals will be researched in order to provide different, professional viewpoints about what drives the current human condition in order to assist in ensuring higher reliability of the research study. Because this researcher may not have the skills in different sociology and psychology disciplines, consultation with these different texts can provide unique insight into human behavioural characteristics in order to create a sound analysis of the information uncovered through secondary research. The research study will also make wide use of various, reliable online professional literature which highlights various case study statistics regarding current marketing efforts in the hospitality industry. Examining various quantitative data results, from previous research studies, will further assist in painting a picture of what drives the most effective brand-building and customer loyalty. By examining current financial documents from different publicly-traded hotel and restaurant industries, such as ratios and revenues, it can also highlight whether any specific marketing efforts which might be highlighted in different annual reports that can serve to create a more positive brand image and ensure long-term customer loyalty. For example, if revenues are down sharply at a specific hospitality company after a radical change in marketing philosophy, it can be rather easily interpreted that these are not successful marketing activities and should not be considered successful long-term for other companies in similar competitive marketplaces. 5. Data Presentation and Analysis The key to this study and the analysis of results lies in either supporting or refuting the viewpoints expressed in this proposal’s review of literature. Are any of the theoretical concepts described, based on wide secondary research, considered to be viable methods for building a strong reputation and higher levels of customer loyalty? If it is discovered that these theoretical principles are valid, then a new model of hospitality marketing can be created. Thus, presentation of data will rely on whether or not these concepts can be validated as important marketing strategies. If this research effort supports these concepts, data will be presented in the form of a new and innovative marketing model, presented in either graphic or chart format, which will be proposed as a new model of marketing for the hospitality industry. If results largely refute the evidence provided in this proposal, data presentation will consist largely of textual discussion and a stronger emphasis on interpretation and recommendations for other hospitality industries. If there are any commonalities uncovered between consumer attitudes and behaviors, which can be linked reliably to marketing efforts within different industries, presentation of data uncovered can be charted to show these linkages. 6. Conclusion and Report Evaluation The different theoretical concepts described in this proposal’s review of literature highlighted different methods for reaching widely-different consumers with vastly different values. At the same time, different marketing tactics designed to build a stronger brand image and more customer loyalty were described. Because this is a desk-based study, there are certain limitations to this study which cannot fully uncover the different perspectives of real-life, real-time managers and staff members in these different hospitality companies. Without a primary study, the results of this desk-based research is unable to explore managerial perceptions about their own unique experiences in these industries. However, there is ample evidence in the form of secondary research data, through multiple sources, which can paint a reliable portrait of what drives current marketing strategies in these hospitality-oriented businesses as well as what drives consumers to choose one industry over another. There are clearly different values which must be considered by hospitality marketers and this study maintains the potential to uncover even more tactics being undertaken by different industries to give this study a broader examination. This study maintains the ability to enhance the current marketing strategies in a wide variety of different hospitality-related environments and could, potentially, create a new model by which some of these companies can change and enhance their current marketing practices both internally and in terms of consumer literature and communication. It is hoped that this proposed research study can ultimately serve as a future benchmark for other businesses that have had considerable difficulty in finding high levels of customer loyalty and in building an image for their brand which outperforms competition. Whatever the actual results achieved in this desk-based study, it should clearly highlight which activities should and should not be considered for future marketing success. 7. References Alonzo, Vincent. (2006). Tools of the Trade. Successful Meetings. New York. 55(8): 24-26. Beirne, Mike. (2006). Holiday Inn Makes Nice, But Will People Notice? Brandweek. 47(10): 6. Davidson, J., Keegan, W. and Brill, E. (2004). Offensive Marketing: An Action Guide to Gaining Competitive Advantage. Amsterdam: Butterworth-Heinemann. ABI/INFORM Global Internet. Accessed 16/7/09. Eager, W. and McCall, C. (1999). The Complete Idiot’s Guide to Online Marketing. Indianapolis: Alpha Books: 108-109. Fareed, John S. (2002). Measurement tools help bolster marketing’s effectiveness. Hotel and Motel Management. Duluth. 217(14): 10. Gilbert, D. and Tsao, J. (2000). Exploring Chinese Cultural Influences and Hospitality Marketing Relationships. International Journal of Contemporary and Hospitality Management. 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