Hospitality Business Development

The Customers drive the hospitality Industry and thus the Essay starts with the definition of Actual and Potential Customers. Then the essay talks about the different kinds of market segment that the hotels attract. Targeting a particular market segment is a very crucial decision that a service provider has to take and this decision is very important as it creates a competition with other players in the market. To remain in competition the hotel has to know about the techniques that help in knowing the strengths and weaknesses of the competitors in the market. One such technique that the essay talks about is competitive intelligence. Customer satisfaction is to be achieved by the service organization and for this there are crucial steps such as cost differentiation and focus. For developing a sound business the competition in the market has to be identified and then the development of products and services can be carried out. Then the essay links the work place climate to the customer satisfaction because a good work place climate motivates the employee to perform better and achieve the target. Then the essay narrows its discussion on the Indian scenario and highlights the steps to be taken to create a mid market hotel business targeting the Indian middle class specifically. The research methodology used for this Essay comprises of both primary and secondary data and is linked properly to provide a concrete connection between the two. The essays draw towards the suggestions and recommendations which are very much essential to be taken care of in order to keep the customers attracted towards the products and services. Jones & Merricks, (1994, pp.19) defines customers as people who actually pay for products and services and may or may not be also consumers. Hence, these customers if gets satisfied

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through the products and services given to them may refer the business to outsiders that is the so called potential customers. A hospitality establishment is always customer centric in nature and hence the products and services thus developed should meet the demands and needs of the targeted customers. But the question arises that how can an organisation achieve customer satisfaction? A possible answer can be a favorable work place with an optimum environment which means the stronger the work place climate the stronger the customer relation and once a good bonding are established then the organization rises up. Anon (2011) Knowing customers and reaching beyond their expectations is a tough task and for these Robert et al (1996) suggests the understanding of value as perceived by customer which can be achieved by few simple steps. The organization should first identify the value, select the identified value, provide the value, communicate the value to the customer and lastly assess the value that is being delivered. On the contrary Hassanien et al (2010) then they suggest the development of new products for new markets that will automatically attract new customers, they suggest strengthening of more market share that is market penetration. Thus, a well structured marketing strategy is very much essential. This helps in knowing your customers in many different ways such as the market segment they represent, their annual income, their choice of products and services. There are three different kinds of market strategies for achieving competitive strategies which are cost leadership, differentiation and focus. (Horner and Swarbrooke, 1996) When market competition comes into mind then there are two main types as suggested by Bowie and Buttle (2004) that is direct and indirect competition. In direct competition the two different business organizations provide same products and services targeting the
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same market segment, hence it can be also termed as face to face competition. These kinds of establishment are generally located in the same vicinity. For example in the Indian market Dominos and Pizza Hut have same kinds of products i.e. Pizza and target the younger generations. So, it is very important that when the products and services are exactly same then they come out with new ideas from time to time. For example the fast food industry was held responsible for contributing a lot towards obesity and to gain attention McDonald introduced Happy Meal for children that encouraged them to eat more fruits, vegetables, fruit juices and low fat dairy products. Valliere and Balice (2010) This type of ideas help in maintaining excellent market competition and good business. But when we talk about indirect competition then in this type of competition the products which can be substituted in place of each other come under the category of indirect competition. A possible example can be a situation where due to unavailability of a business class seat in a plane the traveler takes economy class as a substitute. When the given topic is justified about setting up a hospitality business in Indian Market then a hotel targeting the middle class market will definitely do good business because it represents the largest and widest market in India. When the research carried out by HVS and Federation of Hotel and Restaurant Associations of India (2009-10) is taken into consideration the competition in the Indian Market is very high. There is increasing use of technology and easy availability of manpower and the products and services offered are almost same in one or the other way. Hence there is a need of competitive advancement in the market to establish a sound business. Hence competitive intelligence is an effective tool that can be used to counter check the growing competition in the market as it gives an insight into the strengths, weaknesses, their marketing strategies
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coupled with some more information which help in getting market share in global competitive environment. Wadie Nasri (2010). The report by Euromonitor International (2009) Suggests that Asia Pacific (10%) and Australasia (15%) has the largest mid market segments share and is growing at a rapid pace and will account for a major market share by 2013. After the economic meltdown people became more and more concerned about their spending and hence they always look for cheap and best. So, they are attracted by the budget hotels. The economic downturn also forced the finance managers to cut down all available cost cutting options. But the good news is that despite their efforts they could not manage to cut more to avoid spending on travel and accommodation hence the only option is left is the budget segment. The competition in the mid market segment is quite healthy and there are numerous hotel operators with the presence of international chains like Accor and the like. Hence, when a hotel business is to be developed then it is to be kept in mind that the Indian Customers demand services that means complete comfort. They like to be given value and the term customer satisfaction is to be achieved by all means. Hence, a proper market research is required as the prerequisite for effective decision making about how to develop the offer and then deciding the appropriate location for the business development. When the appropriate location for the business development is set then the time comes for pricing of the offer. When the price is high the expectations of the quality for the products and services are also and vice versa. But an advantage can be on the sideline when a business development offers greater quality at a moderate rate. Bowie & Buttle (2004) Indian market is as such that the customers need to be treated as god. Thus a sound business development strategy is very crucial for the inception of a business
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establishment. So, it is to be kept in mind that inception of a business for the middle market/ budget segment the competition is very crucial and new products and services are to be developed from time to time to attract the actual and as well as the potential customers. It is also a fact that what people see they believe. Hence, right ambience is also desired for this market segment. The hotel industry in India is a very big industry and hospitality is what makes India a country of choice. It is clear with the essay that the mid market segment in India is the largest segment and forms a major part of the population. Hence, from the entire Essay it is clear that managing customers and competition simultaneously is what can be expected from a new hotel. But it is also to be kept in mind that the development of a business and steering it into the hearts of the Indian people is easy if the products and services are designed in accordance with their needs. But at times it is seen that associated organizations with the hotels behave wayward with the customers. Everyday new hotels are coming up with greater ideas and lots of options in offer, which states the intensity of competition in the market. Hence, the mantra for success will be innovation all through the day again and again.

Word Count: 1486

Books

Bowie, D & Buttle, F (2004) Hospitality Marketing, Oxford: Elsevier Limited

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Horner, S. & Swarbrooke, J. (1996),Marketing Tourism, Hospitality and Leisure in Europe. London: International Thomson Business Press.

Hossanien, A., Dale,C. and Clarke, A. (2010) Hospitality Business Development, UK, Butterworth Heinemann

Jones, P. & Merricks, P., (1994) The Management of Foodservice Operations. London: Cassell. C

Robert B. Woodruff, Sarah Gardial (1996) Know your customer: new approaches to understanding customer value and satisfaction. Oxford: Blackwell Publishers

Journals

Nasri, W., (2010) Competitive intelligence in Tunisian company, Journal Enterprise Information Management, vol.24(1), pp.53-67 Cornell Quarterly (2011) Article of the year, Volume 51: 2010, Article of the Year Focuses on Excellence in Customer Service available from http://cqx.sagepub.com/content/52/1/6.citation [accessed on 08/03/11]

Websites

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Euromonitor International (2009) Global Travel and Tourism: Budget Travel -Driven by Economic Uncertainty available on http://www.euromonitor.com/global-travel-and-tourism-budgettravel-driven-by-economic-uncertainty/report [Accessed on 10/03/11]

HVS and FHRAI (2009-2010) The Indian Hotel Industry Survey available from http://www.hotelnewsresource.com/article51182Indian_ Hotel_Industry_Survey________.html [accessed on 02/03/11]

Valliere, S., and Balice, M., (2010) http://www.aboutmcdonalds.com/mcd/media_center/rec ent_news/corporate/Press_Release__McDonalds_Laun ches_Shrek_Themed_Happy_Meal_to_Motivate_Kids_t o_Eat_More_Fruits_Vegetables_and_Dairy.html [accessed on 01/03/11]

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