Marketing and Customer Retention in the Hospitality Industry
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This report discusses the use of marketing mix and customer relationship program in the hospitality industry, with a focus on Starwood Hotel. It also proposes strategies for the development of a loyalty program to retain customers.
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Marketing and Customer Retention in the Hospitality Industry
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Table of Contents INTRODUCTION...........................................................................................................................1 MAIN BODY...................................................................................................................................1 Marketing mix..............................................................................................................................1 Customer Relationship Programme.............................................................................................2 Strategies for the development of loyalty programme.................................................................5 CONCLUSION................................................................................................................................6
INTRODUCTION Marketing refers to a business function which allows the organizations to ensure that they are able to reach their customers using specific strategies, methods and approaches. Customer retention refers to the ability of an organization to retain its customers for a longer period of time (Hamilton, Rust and Dev 2017). This report is based on Starwood Hotel which is a hospitality company operating its hotels all over the world. In this assignment, detailed focus will be made on the use of marketing mix, analysis of relationship marketing programme. Additionally, it will also propose strategies for the development of loyalty programme to retain the customers. MAIN BODY Marketing mix Marketing mix refers to making the use of various types of techniques of marketing so that the organizations are able to ensure that they are able to achieve their marketing goals and objectives effectively and efficiently(Mmutle, 2017). Therefore Starwood Hotel also makes the use of marketing mix so that it is able to achieve its goals and objectives. The marketing mix of the hotel is as follows- Product- It refers to the goods or services which are provided by an organization to its customers(Ngacha and Onyango 2017). Starwood Hotel provides the different types of services to its customers and thereby makes sure that they are able to make the right use of these services by getting appropriate value for the money which has been paid by them. Price- It means the amount of money which is paid by the customers to avail the services of the organization. Starwood Hotel sets a different range of price for its different facilities. Therefore in this manner the hotel can make sure it is able to set a price which can attract customers towards it. This will help the hotel in achieving its goals and objectives in the future. Place- It refers to the location at which a business organization operates. In the context of Starwood Hotel it means the places in the world where it operates its business. Therefore, the managers of the hotel are required to select the right places all over the world which can be quite effective in ensuring that the hotel is able to enhance its overall profitability level effectively and efficiently. Promotion- It means the strategies which are used for the purpose of promotion by the organizations. Thus, in the context of Starwood Hotel it is very important that they are able to 1
use appropriate promotional strategies through which they can attract the customers and clients towards them. People- It means the staff of the organization. They are quite crucial for it because they provide their various types of services to the company. In the context of Starwood, it is important that it provides the right training to its staff members and ensures that they are able to handle the complaints and grievances of the customers effectively. Therefore it is important for the HR managers of the hotel to put their concentration and focus so that the relevant outcomes can be attained. Process- It means the the type of activities which are undertaken in the organization. It means the flow through which these activities are undertaken. In Starwood, there has to be a focus on adoption of a process through which the right hospitality services are provided to the customers and clients in an appropriate manner. There has to be cooperation and coordination among the different types of departments in the hospitality processes which can enable the hotel to be able to provide its services to customers and clients thereby ensuring that they are highly satisfied and provide positive reviews. Physical evidence- It refers to the actual experience which the customers can have while purchasing a product or while availing a service(Parawansa 2018). Therefore, In the context of Starwood it is quite crucial that they make the hotel look attractive for the customers and clients which can ensure their higher-level of satisfaction while availing the services. They should make the furniture, overall look of the hotel attractive so that the right reviews are provided by the customers and clients which can be very helpful for the hotel in achieving the marketing goals and objectives both in the short-term and long-term in the future. Customer Relationship Programme ACustomerRelationshipProgrammereferstoaprogrammethroughwhichan organization aims to ensure that a right relationship can be maintained effectively with the various customers(Ramphal 2016). The use of such a programme can be quite helpful for the organizations so that they are able to ensure that they are able to maintain their relations in a right manner with their different customers. In Starwood Hotel, Starwood Preferred Guest programme is present for the guests who are loyal towards the hotel. It is a loyalty programme which aims at ensuring that the regular guests of the hotel are provided various types of benefits which is a reward for displaying their loyalty. 2
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The various characteristics of the Customer Relationship Programme of the hotel are as follows- Characteristics of organisation’s relationship marketing programme are as follows- It is a programme in which betterment of customer relationship is focussed so that it will benefit the firm either directly or indirectly as they are the valuable part of any organisation(Hyun and Perdue 2017). Organisation tends to focus on long lasting effect on the minds of the consumer rather than short term by improving its service after the product is purchased. Needs, requirements, and demands of the buyer is understood by detailed study, research, and analysis so that there would not be any chance of loop holes after that. It focusses on making good terms with the consumer and make efforts to build trust among them as they are an integral part of a business as it cannot survive in the competitive market without their support. It emphasis on making a long term as well as a lasting relationship with the customers that are loyal to the firm and consists of a large proportion of overall buyers. Organisation uses best techniques that it could to lure overall customers but focusses mainly on the people that are regular as well as loyal by ways of giving special discounts, various type of sales,etc. It uses various method to reward the customers too that tends to make a good image of an organisation which will benefit its long term growth, prosperity, and profitability. They try to readdress the problems of the buyer as soon as possible as well as special teams are made to solve issues that are faced by genuine as well as the customers that are an integral part of the firm. It makes the image of the company grow in the eyes of the public as well as in the market. The features of Starwood Preferred Guest Programme is as follows- Starpoints- Starpoints are earned by the guests for their stay in the hotel. These points can be used by the customers in different ways which ensures that they are able to use their loyalty points in the right manner(Kandampully, Zhang and Jaakkola 2018). There is a facility of transfer of Starpoints to frequent flyer programmes of different airlines which thus can provide discount to the customers in an effective manner. Also, these 3
Starpoints can be used by the customers for availing discount for their future stay at the hotel. Membership rewards- Starwood Preferred Guest provides membership rewards to the guests which enables them to be able to avail certain premium facilities(Bhargav 2017). Access to Premium Lounges, Exclusive Facilities of the hotel are provided to the guests. Complimentary benefits- Starwood Preferred Guest provides complimentary benefits to the guests who stay frequently at the hotel. These benefits can be in the form of free nights in the hotel, discount offers on bookings, access to premium suites etc. Thus these are provided according to the points which are earned by the guests for staying at the hotel. Extra facilities- Starwood Preferred Guest programme provides the guests with different types of extra facilities which they can use as per their convenience. Offers for upgrading the room are also provided to the guests at the hotel. Reasons for the success of the programme- The Starwood Preferred Guest Programme has been a success. The reasons for the success of the programme are as follows- Valuefor the customers- The Starwood Guest Programmeprovidesitsdifferent customers with the desired value. They get benefits for displaying their loyalty towards the hotel. Marketing of the programme- Being a large hospitality brand Starwood has been able to do marketing of its loyalty programme. This has been able to make the customers aware about the programme. Partnership with the airlines- The Starwood Guest Programme offers benefits to the guests by providing them discount when they fly with different airlines. This offers the customers more benefits. Management of the points- The Starwood Guest Programme allows the guests to easily manage their various reward points in a highly effective manner. This enables the guests to be able to use their reward points whenever required. Strategies for the development of loyalty programme Based on the conclusions from the loyalty programme which is present in Starwood Hotel different strategies can be used so that it can be developed for the purpose of ensuring that 4
the hotel is able to ensure that it can retain its customers and clients. These strategies are explained as follows- Partnering with more airlines- Loyalty Programme can be developed in the right manner by partnering with more airlines(Jalilvand2017). Therefore from the point of view of Starwood Hotel it is quite important that it develops its loyalty programme through ensuring partnership with more airlines so that its customers are able to enjoy exclusive privileges in them. Providing more privileges to the customers- Loyalty Programme can be developed by providing additional privileges to the customers(Boateng 2019). In Starwood Hotel, these privileges can be extremely important so that the guests are able to enjoy their stay at the hotel. Customization offers for the customers- Loyalty Programme can be improved by allowing the customers customization offers. The reason for this is that the customers are able to customize the services which they want to avail. In the context of Starwood Hotel, these customization offers can be quite effective in offering the customers with more choices through which they are able to manage their stay at the hotel. Prioritizing the regular guests- The regular guests should be given priority in the hotel. Therefore, In the context of Starwood Hotel it is very important that the loyalty programme must offer the desired level of priority to the customers who are regular and stay at the hotel regularly. Therefore, it is very crucial for the hotel that it is able to prioritize its guests in its loyalty programme which will lead to a positive feedback from its customers and clients and its reviews and ratings will be on a higher side. Providing gifts- The regular guests can be provided gifts when they regularly visit the hotel. Thus, Starwood Hotel has to make sure that it can use this strategy in the right manner so that it is able to provide gifts to the regular customers as a part of its loyalty programme. This will be very helpful for the guests in enhancing their experience and this will initiate a positive review from them about the services which are provided by the hotel. CONCLUSION From the above report, it can be concluded that marketing is a process through which the overall awareness of the customers can be effectively enhanced. Customer retention is a process 5
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by which the variouscustomers can be retained through the application of strategies. Both of themareimportantfromthepointofviewofhospitalityorganizations.Thehospitality organizations use their marketing mix for developing their marketing strategies. The use of Customer Relationship Programme can be made by them by providing a loyalty programme for the regular guests. Also there can be an use of different strategies through which the loyalty programme can be developed which enables higher customer retention. 6
REFERENCES Books and journals Bhargav, S., 2017. A study on marketing mix of hospitality industry.International Journal of Management, IT and Engineering.7(9).pp.253-265. Boateng, S. L., 2019. Online relationship marketing and customer loyalty: a signaling theory perspective.International Journal of Bank Marketing. Hamilton, R. W., Rust, R. T. and Dev, C. S., 2017. Which features increase customer retention?. MIT Sloan Management Review.58(2).p.79. 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. Jalilvand,M.R.,2017.Theeffectofinnovativenessandcustomer-orientedsystemson performance in the hotel industry of Iran.Journal of Science and Technology Policy Management. Kandampully, J., Zhang, T. C. and Jaakkola, E., 2018. Customer experience management in hospitality.International Journal of Contemporary Hospitality Management. 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. 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. 7