Marketing and Customer Retention in the Hospitality Industry

This report discusses the retaining of customers in the hospitality industry by adopting and implementing various strategies for loyalty programs. It covers the understanding of marketing mix, characteristics of relationship marketing, and strategies for loyalty programs.

Marketing and
Customer Retention in
the Hospitality
Industry

Table of Contents
INTRODUCTION...........................................................................................................................1
Knowledge and understanding about marketing mix of Bed and Breakfast Restaurant.................1
Characteristics of relationship marketing to implement a
successful loyal programmes..........................................................................................................3
Propose strategies of loyalty programmes in Bed and Breakfast Restaurant..................................4
CONCLUSION................................................................................................................................6
References:.......................................................................................................................................7

INTRODUCTION
Marketing can be defined as the process of creating awareness of the products and
services offered of the company. This is done with the help of promotional activities and
advertisements strategies formulated within organization. Selling, purchasing, market research,
target audience are all the elements of marketing. Hospitality industry is the services industry
which provides accommodation, lodging, food, beverage, entertainment, event planning,
restaurants, hotels, tourism and travel activities (Amoako, Neequaye, Kutu-Adu and Ofori,
2019). The following discussion is based on the retaining of the customers by adopting and
implementing the various strategies for loyalty programs. This report will review the insight of
marketing mix which includes the product, price, place, promotion, process, people and physical
evidence. Discussions are also made on the characteristics of relationship marketing which
includes service culture, segmentation, database, trust and commitment and recognition and
reward. Strategies of loyalty programmes which includes sending greeting cards, offering
discounts, organize mini celebration, games and other stuffs, other strategies and benefits to the
restaurant are also covered in the following report with conclusion.
Knowledge and understanding about marketing mix of Bed and Breakfast
Restaurant
Marketing mix concept: It is defined as the combination of various actions sets and strategies
which an organization uses to promote its company. Marketing mix is model for businesses
which helps the companies in accomplishing the marketing objectives. Initially it was only 4 P's
marketing that is product, place, price and promotion. But now it is extended to the further 3 P's
such as process, people and physical evidence. These are the elements of marketing mix used by
the bed and breakfast restaurant to follow the marketing mix strategies (Anwar, Ferine and
Sihombing, 2020).
Product
It is one of the element of marketing mix. It is the main entity or value which is offered
by the organization in order to gain some revenue through it. In context of bed and breakfast
restaurant, it has a large range of product portfolio along with the services which are rendered to
the customers. Such as breakfast, rooms, Wi-Fi services, lunch, dinner, sports services,
1

swimming pool and parking. Restaurant has adopted the product strategy of comparative analysis
form the competitors.
Price
It is an another element of marketing mix which states the value or worth of the product
which is being sold by the organization. In context of bed and breakfast restaurant, organization
has set the base price according to the competition in the market place. It also includes the
agreements, discounts and negotiation. Pricing strategy used by the restaurant is the marketing
penetration pricing strategy. It states that initially the restaurant keeps low price for every new
product or services launched by them and if its demand rises, they slowly increase the price.
Place
It is also one of the element of marketing mix. It states the location of the outlet of the
organization where customer visits to purchase the products and services offered by the firm. In
context of bed and breakfast restaurant, distribution channels are used by the restaurant. It is used
in the form of direct, modern and traditional form of distribution. It has attractive strategy to gain
the customer attention.
Promotion
It is also an another element of marketing mix. It is related to the advertising if the
organization in order to create awareness about the products and services offered. Its motive is to
attract the customers towards the brand. In context of bed and breakfast restaurant, organization
uses online advertising, informative materials and newspaper advertisements. Restaurant uses
both the form of promotional strategies that are the traditional and digital mode of promoting the
company (Barusman, Rulian and Susanto, 2019).
Process
It is one of the element of marketing mix. It states the entire procedure of working of the
organization from the purchasing of raw materials to the selling and after sale services to the
customers. It is contributing in the enhancement of customer experience with the brand. In
context of bed and breakfast restaurant, its operational management is based on the total quality
management and just in time management, this is because it highly focuses on the qualitative
management with accuracy in time.
People
2

It is an another element of marketing mix. It relates with the employee or staff which are
involved in the organization for the functioning, working, management and operations of the
firm. In context of bed and breakfast restaurant, organization hires the staff as per the needs and
requirements of the restaurant. Specially in the department of customer servicing as it is
considered as one of the most essential domain in hospitality industry.
Physical Evidence
It is also an another element of marketing mix. It states the physical looking and practical
environment of the store or outlet where the products and services are kept for sale. In context of
bed and breakfast restaurant, its physical evidence includes the well furnished and positive
ambience for the customers. Dining services with an attractive look with proper accommodation
look. Other attention gaining factors are the dress code of the service people, lighting, music and
many more which provides an attractive look to the restaurant.
Characteristics of relationship marketing to implement a
successful loyal programmes
Relationship marketing concept: It is defined as the concept which is associated with the direct
responses developed from the marketing campaigns. It mainly targets the customers retention by
satisfying the customer in terms of its experience with the organization. It does not focus on the
sales transaction but only targets the maintenance of long term relationship with the customers.
This is done to gain the loyalty from them towards the brand.
Service culture
It is one of the characteristic of relationship marketing. Service culture is defined as
proving the type of environment to the customers in their first time visit which impresses them to
visit again in the future. Every time the servicing of the customers must encourage them to
choose the same restaurant for any further plans. It includes the proper respect, empowerment,
ritualism, common language, friendliness, celebrations, continuous feedback and shared
responsibility (Frye, Kang, Huh and Lee, 2020).
Segmentation
It is an another characteristic of relationship marketing. Segmentation is defined as the
dividing of the customers in some basic classification. It is the grouping of customers in the form
of age, gender, interest and spending habits. Type of products and services offered by the
3

restaurant are directly or indirectly relates with the segmentation. It helps in the relationship
marketing by attending the customers as per the target segmentation (Sota, Chaudhry and
Srivastava, 2020).
Database
It is also one of the characteristic of relationship marketing. Database is defined as the
technical concept of recoding the track of each and every customer. This is done so that
according to the nature of the customer, data is being analysed and strategies are formed for the
same. It is the examination of the current and future decision making in regards with the
relationship marketing with the customers.
Trust & Commitment
It is also an another characteristic of relationship marketing. Trust and commitment is
defined as the believe that employee focuses on to make on the customer. If there is a proper
trust and commitment maintained by the restaurant then customer will automatically provide
loyalty towards the brand. Relationship marketing has this concept on a priority because many a
restaurants break such trust for the current benefit without focusing on the future terms
(Mahmoud, Hinson and Adika, 2018).
Recognition & reward
It is one of the characteristic of relationship marketing. Recognition and rewards to the
customers are important because they find beneficial to get something extra of what they actually
pays. This helps in the maintenance of long term relationship with the customer because
customers visits again and again if they recognised and rewarded for the same. This also helps in
the loyal programmes within restaurant (Porcu, del Barrio-Garcia, Alcántara-Pilar and Crespo-
Almendros, 2019).
Propose strategies of loyalty programmes in Bed and Breakfast Restaurant
Loyalty Program name: Celebrating customer's special day – Concept
Bed and breakfast restaurant must established the loyalty program of celebrating the
customer's special day. Special day must be recorded by the restaurant on the first time visit of
the customer. For example, birth date, anniversary date and any other special day of the
customers as per the demands of the customer (Sahoo, 2018). There are strategies to implement
this program such as :
Sending greeting cards
4

It is one of the strategy of loyalty program. Sending the greeting cards on the recorded
special day of the customer can help the customer feeling special and impressive. Customer will
definitely visit the restaurant and party hard for offering such a beautiful and attractive greeting
from the restaurant. Greeting must contain the golden words for the customer so that it can be
attention gaining for them.
Offering discounts
It is an another strategy of loyalty program. When customers visits the restaurant on their
special day with their group in order to party, then it is the responsibility for the restaurant to
provide then the worthy offers and discounts. It must be suitable as per the needs and
requirements of the party theme and culture.
Organize mini celebration
It is also one of the strategy of loyalty program. If customers are not willing to visit to the
restaurant then the restaurant must provide the offer of organising of mini celebration from their
side. It can include the welcome drinks along with the suitable party theme according to the
special day so that the customer can surely attend the restaurant party organised for them (Salem,
2021).
Games and other stuffs
It is also an another strategy of loyalty program. Games according to the party theme
must be organised by the restaurant so that the customers can gain interest while having the fun
on their special day. Games like romantic games for anniversary couple and many more. Other
stuffs includes the entertainment. For example, songs and mini movie presented by the customers
itself by arranging the projectors and good sound systems.
Other strategies
There are other different and attractive strategies as well in order to gain the loyalty from
customers. Such as free online delivery to some occasions, welcome drink or a free desert,
getting the free gift on the 10th visit and celebrating the season. Moreover, inviting on the events,
concerts and theme nights, secret menus, time bound campaign and referral programs.
Benefits to the restaurant
There are several benefits to the restaurant of the loyalty programs. Such as it offers
better return on investment than the usual coupons offered by the restaurant. It helps the
restaurant in repeating the customer on a frequent basis. It allows the restaurant to connect
5

directly with the customers with positive feedback systems. Moreover, it reduces the slow
seasons and cost as well. It boosts the profits and find new clients every time. It enhances the
brand reputation in the market place and also provides the competitive advantages to the
restaurant (Alkitbi, Alshurideh, Al Kurdi and Salloum, 2020).
CONCLUSION
It is concluded that marketing and customer retention is an important concept to learn and
study so that its application can be applied in the real world organizations. This is because
marketing is one of the most essential face of the restaurant which is highly required for retaining
the customer. The above report is all about the understanding of the marketing mix,
characteristics of relationship marketing and strategies for loyalty programmes. Now a days,
customer retention is considered as the area of implementation without which the organization
cannot survive in the market place. The reason being is that without maintaining the relationship,
company cannot get the loyalty from the customer and hence low sales and revenues. Therefore,
marketing, customer retention, marketing mix, relationship marketing and loyalty programmes
are the imperative concepts to follow in the restaurants. Thereby, this report covers all such areas
in order to better understand the conception of marketing.
6

References:
Books and Journals
Alkitbi, S.S., Alshurideh, M., Al Kurdi, B. and Salloum, S.A., 2020, October. Factors affect
customer retention: A systematic review. In International Conference on Advanced
Intelligent Systems and Informatics (pp. 656-667). Springer, Cham.
Amoako, G.K., Neequaye, E.K., Kutu-Adu, S.G. and Ofori, K.S., 2019. Relationship marketing
and customer satisfaction in the Ghanaian hospitality industry: an empirical examination of
trust and commitment. Journal of Hospitality and Tourism Insights.
Anwar, Y., Ferine, K.F. and Sihombing, N.S., 2020. Competency of Human Resources and
Customer Trust on Customer Satisfaction and Its Consequence on Customer Retention in
the Hospitality Industry North Sumatra. Journal of Environmental Management &
Tourism, 11(6), pp.1515-1519.
Barusman, A.R.P., Rulian, E.P. and Susanto, S., 2019. The Antecedent of Customer Satisfaction
and Its Impact on Customer Retention in Tourism as Hospitality Industry.
Frye, W.D., Kang, S., Huh, C. and Lee, M.J.M., 2020. What factors influence Generation Y’s
employee retention in the hospitality industry?: An internal marketing
approach. International Journal of Hospitality Management, 85, p.102352.
Mahmoud, M.A., Hinson, R.E. and Adika, M.K., 2018. The effect of trust, commitment, and
conflict handling on customer retention: the mediating role of customer
satisfaction. Journal of Relationship Marketing, 17(4), pp.257-276.
Porcu, L., del Barrio-Garcia, S., Alcántara-Pilar, J.M. and Crespo-Almendros, E., 2019.
Analyzing the influence of firm-wide integrated marketing communication on market
performance in the hospitality industry. International Journal of Hospitality
Management, 80, pp.13-24.
Sahoo, K.C., 2018. The influence of social media marketing on customer satisfaction in
hospitality industry. Journal of Tourism Challenges and Trends, 11(1), pp.31-48.
Salem, S.F., 2021. Do relationship marketing constructs enhance consumer retention? An
empirical study within the hotel industry. SAGE Open, 11(2), p.21582440211009224.
Sota, S., Chaudhry, H. and Srivastava, M.K., 2020. Customer relationship management research
in hospitality industry: a review and classification. Journal of Hospitality Marketing &
Management. 29(1). pp.39-64.
7