Marketing and Customer Retention in the Hospitality Industry

This project report explores the use of marketing mix and relationship marketing in the hospitality industry, specifically focusing on customer retention. It discusses the strategies used by Shangri-La Hotel, such as their loyalty program 'Golden Circle', and analyzes the characteristics of successful relationship marketing programs. Additionally, it provides strategies for developing a loyalty program in the hospitality industry.

Marketing and Customer
Retention in the Hospitality
Industry

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Use of marketing mix and extended marketing mix of marketing strategies in organisation.....1
Analysis of characteristics of organisations relationship marketing programme and its success
on customer retention..................................................................................................................3
The strategies for the development of own loyalty programme in the business within the
hospitality industry......................................................................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
Customer retention can be defined as ability of companies to retain the customer base for
some specified period. It is a process of marketing which focuses on engagement of existing
customer’s to buy products and services continuously to fulfil their desires (Kanten and Darma
2017). With good customer retention tactics company enables to form long lasting relation with
its consumers who become loyal to the brand. The company selected for this report is Shangri-La
Hotel which has over 100 luxury hotels and resorts. The topics covered in this project report are
understanding of theoretical framework of marketing mix and broader understanding of
relationship marketing strategics.
MAIN BODY
Use of marketing mix and extended marketing mix of marketing strategies in organisation.
Marketing mix helps organisations in achievement of its businesses goals and objectives
and it is widely used theory which is used to define strategies. From the following elements the
marketing mix of Shangri-La Hotel can be discussed:
Product Strategy- The chosen hotel provides various hospitality services all across the
world. Luxury hotel chains of Shangri-La Hotel has exclusive services like extended stay in
luxury suites which are part of marketing mix product and services. The loyalty program which
is known as 'Golden Circle' is also among with the services which are specially provided to the
loyal customers of hotel. The hotel has also collaborations with airlines, online platforms, dining
and shopping outlets and financial institutions like American express which helps the out siders
to make payments easily.
Place Strategy- Shangri-La Hotels have presence all most all over the world with 100
luxury hotels with 40,000+ hotels. It has been growing in recent years with more services at new
places. Starting from Hong Kong, the hotel has focused on the group of customers which fall
exclusively in high stand of society. When hotel started growing it focused on expansion and
emerged in the area of Asia and Europe (Ateke 2016). After this its growth in international
business emerged in market of luxury services. With various brands like, Shangri-La Resorts,
traders Hotels, Hotel Jen and Kerry Hotels it has different marketing strategies with different
distribution strategies.
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Price Strategy- As the hotel is a service provider, the customers who are targeted are
from exclusive segment of society. The price of Shangri-La Hotel in London are different from
the hotels which are located in different city. The range varies with the value-added services such
as extra Wi-Fi usage, parking and all other exclusive services which are cost for guest of hotels
(Palto, Fraser, and Lebcir 2018).
Promotion Strategy- Shangri-La Hotel which is a well known brand for long time in
hospitality industry extensively focuses on the finest services and customer satisfaction. The
main target base of customers for hotels are the travellers and couples who come for the visit in
the city. For the promotional activities the hotel has collaborations with many business firms,
companies which operate at multi national level, and various other groups which has booking on
the priorities. Apart from this it has also collaborations with payment banks which promote the
seasonal packages of hotels.
Physical Evidence- It is the environment in which services delivered to the customers. It
is one of the way to determine whether a goods or service has been delivered successfully. In
context to, Shangri-La hotel physical evidence includes hotel lobby, restaurants, phone, music,
before and after sale services, amenities related to the customer (Bhargav 2017). Hotel provides
its services according to customers need, that can satisfied the customer in nicely manner.
consumers will judge it, while walking into the restaurant, the customers expectations are a
friendly and clean environment inside.
People- One of the most essential element of the marketing mix is people. This includes
everyone those are involved in the product or services, directly or indirectly. In hotel service it
consider; receptionist, bell boy, laundry serviceman, butler, chefs, cleaner and waiter. It plays
crucial role in hotel marketing, customers judge the services which are provide to them, better
service make customers loyal for the brand.
Process- It refers overall activities which is done with the product or service, from
manufacturing to final consumer. It can affect the performance of the service which firm provide,
involving the delivery of product to consumer (Hanaysha 2018). In this hotel it refers to the
actual procedure, policies, operating system and service delivery system in which mechanism are
competing. Delivery system and policies plays crucial role for hotel's image, customers want fast
and friendly service
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Analysis of characteristics of organisations relationship marketing programme and its success on
customer retention.
Customer relationship marketing (CRM) programme is a process which helps to maintain
relationship with clients, their loyalty and the value of brand to build ,marketing strategies and
activities. Such activities allows business develop long term relations with its existing and new
clients. It important for Shangri-La Hotels to have such system because it gives each and every
detail of customer which makes it easy to track profitability of customer (Mmutle 2017). The
costumer loyalty program which is operated in Shangri-La Hotels is Golden Circle. Some of the
characteristics of this programme are as follows:
 Simplicity- With this loyalty program member’s are secured from different complexities
which the other visitors may face while visiting the hotel. The complexities here may be
booking issues at the pick time, or the high prices of rooms. The members receive options
from which they can choose the option they think would be best for them.
 Global- The feature of global existence which associated with the loyalty programs
which has sparked loyalty networks. The members of Shangri-La's loyalty programme
can have the benefit of this program at any of its hotels all across the world. This gives
them benefit to save money and continue the visits and invest at the place which is
familiar to them.
 Relevant rewards- These are critical part of successful loyalty program. In the chosen
hotel the members of loyalty program get GC points on their visits to hotel were by they
can redeem them on the next visit and get the discounts accordingly. As the loyalty
program of Shangri-La hotels partners with Tai InnerCircle Points, the members simply
connects the member of Golden Circle memberships and this alliance gives them greater
recognition whenever they travel.
 Offers- When the hotel gives different offers to members of loyalty program, the trust is
built and long-term relationship can be maintained. Offers may involve discounts, gift
cards and other such offers with makes customers feel of being profitable at the end of
booking in the hotel (Ngacha and Onyango 2017). But it is necessary of companies to
track the offers for best results and to understand the needs of customers properly.
With the implementation of Golden Circle loyalty program, Shangri-La Hotels have succeed in
its performance and has achieved profitability state. The program gave improved guest
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experiences which made the visitors visit again because they feel they are been taken care very
well. The hotels have increased bookings as the rewards and offers are enough to attract the
members and even the new guests to get them in membership programs (Parawansa 2018). This
also help the hotel to retain its customers because when the company builds long-term relations
with their existing customers, it is easy to acquire new customers which will increase profit
margins.
With effective retention techniques hotel safe their investments on marketing as there is
no need to market the existing customers. So, this means if the customer retention rate is high for
Shangri-La hotels, there is less need to spend on advertising. Ultimately, all this things boosts the
revenues of hotel, as it is obvious that when the customers are happy with one visit, then only
they will visit again. All this things benefit the hotel in succeeding and retain the customers and
sustain in competitive environment.
The strategies for the development of own loyalty programme in the business within the
hospitality industry.
Marketing can be defined as the combination of strategies and policies which are
implemented by marketing managers of company to promote its products and services. For such
policies and strategies marketing mix is an essential part. Marketing mix helps the company
understand products and services which can be offered to its customers, it is important to know
the needs and desires of people and accordingly provide its services in market (Ramphal 2016).
The companies can plan successful product offering which attracts more and more customer
base. The proper mix of seven elements gives strengths and avoids unnecessary costs which can
help the managers invest in other activities.
Shangri-La hotels tends to provide luxury and friendly environment to the travellers and
couples visiting city. For this hotel runs Golden Circle programme, which its a consumer loyalty
program by which members can gets various benefits. The features of this royalty program are
simplicity, global reach, relative rewards and offers. Unlike very organisation, Shangri-La hotel
also focus over all such activities which can help in customer retention and with the use of above
loyalty program, the hotel has succeeded in doing so. After completion of LMU BA Top-Up
hospitality management course student adopt following strategies to run own loyalty programme
within the same industry.
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Social media influence- The strategies would be formulated which are in trend and can
be used for competitive environment. As per the trends social media is the source which helps
every company to invest less and earn more. This is happening because people are more active
over the social media (Hyun and Perdue 2017). The information which is shared through social
media can be spread to millions of people and many customers can be attracted on the same time.
But for such activities company needs to have proper research over the targetted audience and
the media platform which would be more appropriate. All such things are necessary to know
because targetting wrong people may waste the time of company. Platforms like Gmail,
Instagram, Facebook can be used because all these applications have global users.
Relationship management within organisation- Customers get attracted more towards
the environment and the services provided to them. It is important for all companies to maintain
coordination and cooperation so that work gets done effectively. The leaders and managers are
responsible to train staff members and ensure that they are working according to the standards of
organisation. The internal environment of company reflects the culture within company which
can be seen by the customers (Lopes 2016). It is necessary to have friendly environment with the
staff members and managers because they are the people who have more interactions with the
customers and they are the ones who know the taste and preferences of people. Relationship
building is necessary not only with buyers but with the employees also.
From the above strategies either one strategy can be adopted or both can adopted by the
individual while implementing own loyalty program. Both the strategies are effective for a
loyalty program which mainly focus on customer relationship marketing.
CONCLUSION
The above project report concludes that relationship marketing can defined as strategies
which are adopted for customer loyalty, interaction and long-term engagement with customers.
To develop strong connections with customers information is provided directly which suit to
needs and interests and strategies are designed to promote open communication. The marketing
mix which consists of seven elements which are product, place, price, promotion, people, process
and physical evidence helps the companies to formulate the strategies which would be used for
marketing. Apart from this company formulates loyalty programs which helps companies to
effectively retain its customers on long-term bases.
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REFERENCES
Books and Journals
Ateke, B. W., 2016. Customer Involvement Management (CIM) As a Correlate of Customer
Retention (CR) in the Hospitality Industry. International Journal of Marketing and
Communication Studies. 1. pp.1-9.
Bhargav, S., 2017. A study on marketing mix of hospitality industry. International Journal of
Management, IT and Engineering. 7(9). pp.253-265.
Hanaysha, J. R., 2018. Customer retention and the mediating role of perceived value in retail
industry. World Journal of Entrepreneurship, Management and Sustainable
Development.
Hyun, S. S. and Perdue, R. R., 2017. Understanding the dimensions of customer relationships in
the hotel and restaurant industries. International Journal of Hospitality Management.
64. pp.73-84.
Kanten, I. K. and Darma, G. S., 2017. Consumer Behaviour, Marketing Strategy, Customer
Satisfaction, and Business Performance. Jurnal Manajemen Bisnis. 14(2). pp.143-165.
Lopes, M., 2016. The hospitality industry (Doctoral dissertation).
Mmutle, T., 2017. Customers' perception of service quality and its impact on reputation in the
hospitality industry.
Ngacha, W. J. and Onyango, F. E. V., 2017. The role of a customer-oriented service culture in
influencing customer retention in the hotel industry.
Palto, D., Fraser, P. and Lebcir, M., 2018. An investigation into the relationship between
customer relationship marketing and customer retention: superstore retailing context in
Bangladesh. journal of Business and Retail Management Research.
Parawansa, D. A. S., 2018. Effect of commitment and customers’ satisfaction on the relationship
between service quality and customer retention in rural banks in Makassar, Indonesia.
Journal of Management Development.
Ramphal, R., 2016. A complaints handling system for the hospitality industry.
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