Marketing and Customer Retention in the Hospitality Industry

This report explains the significance of marketing and customer retention in the hospitality industry. It covers the marketing mix and relationship marketing characteristics, using the example of a Bed and Breakfast Restaurant. It also proposes strategies for loyalty programmes in your own business. Subject: Hospitality Management, Course Code: FdA, College/University: Nelson College

Marketing and
customer retention
strategy in hospitality

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Knowledge and understanding about marketing mix, including extended marketing mix of
proposed Bed and Breakfast Restaurant.....................................................................................3
Characteristics of relationship marketing (Service culture, Segmentation, Database, Trust &
Commitment and Recognition & reward) to implement a successful loyal programmes..........5
Propose strategies of loyalty programmes in own business in the hospitality industry, which
are going to open after completion of the FdA hospitality management programme from the
Nelson College ...........................................................................................................................7
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Customer retention and marketing are two major pillars of hospitality business which
helps in development of the business in a precise manner. In the long run, customer retention
helps a company to keep loyal customers attracted towards business entity (Chung, 2020).
Marketing also play a significant role in development of the business by increasing sales of
product. In this report the importance and significance of hospitality management is explained
along with scope of marketing in hospitality sector. This project covers application of marketing
mix in a newly established hospitality business. In this project the characteristics and traits of
relationship marketing are explained along with implementation of loyal programmes. In this
project the dimensions of relationship marketing are covered along with explanation of culture
and its practices in a business. In this report example of Bed and Breakfast Restaurant is taken
into consideration for understanding hospitality business and its functions. The Bed and
breakfast restaurant is a place where healthy food is served to customers at affordable prices and
the restaurant is situated in heart of London City.
MAIN BODY
Knowledge and understanding about marketing mix, including extended marketing mix of
proposed Bed and Breakfast Restaurant.
In the functioning of a business in hospitality sector marketing mix and its application
play a crucial role. The application of marketing mix brings effectiveness in business as it helps
in formulation of effective marketing strategy which is appropriate for selling products to target
customers. There are several elements in the marketing mix which helps a company to develop
perfect marketing plan. In the scenario of Covid-19 it is essential for a company to deliver best
marketing mix in order to lead the competition. The marketing mix and its application for newly
established business like Bed and breakfast restaurant is given below:
 Price- The price of product is the value of a commodity which is decided by a business
entity in order to sell a product in market. It is essential for a business to formulate
effective price of the product in order to sell maximum quantity of product. Product of a
company should be allocated with appropriate price tag in order to gain attention of
product Bed and breakfast restaurant will provide huge discounts for new customers in a

perfect manner to increase business sales. Many companies in hospitality industry focus
on deciding price of product at cheap rates for increasing annual turnover.
 Product- Product is final commodity, which is produced by a company to satisfy wants
and needs of customers. The product of a company is generally developed with quality in
order to get positive feed back from the customers. In hospitality industry, product is
generally food and beverages which should be provided to customer by keeping in mind
health parameters (Hyun and Perdue, 2017). Bed and breakfast restaurant will provide
foods and beverages to customers with utmost quality in order to lead the marketplace. It
is also main duty of production and operations department of Bed and breakfast
restaurant to maintain quality in product for achieving customer satisfaction.
 Place- Place is the geographical location selected by the business to sell products and
services. It is the main duty of top and strategic level management to select appropriate
place for selling products to easily sell products. Bed and breakfast restaurant has decided
to open near Convent Garden which is the best place to open a restaurant. After the
impact caused by Covid-19, Bed and breakfast restaurant will take assistance of skilled
and trained employees in marketing management for development of marketing
operations.
 Promotion- The promotion is also an essential part of marketing functions and activities
which includes advertisement and publicity of a product. In order to achieve marketing
objectives in a precise manner it is the major need for a business to select best
advertisement methods. Bed and breakfast restaurant can take support of social media
and internet advertising for the systematic growth of business.
 Process- It is considered as one of the major stages in application of marketing mix in a
company. Process includes the steps which are followed by a business to deliver final
goods and services to customers (Murillo and King, 2019). Bed and breakfast restaurant
will follow process formulated by professional marketing experts in order to grow at
faster pace.
 Physical evidence- Physical evidence includes the parameters which are expected by
target customers of the business. In the business environment, physical evidence refers to
layout and design of the restaurant. The physical evidence also includes branding and
packaging which will be helpful for the company to deliver quality products.

 People- It is important for a business to focus on salesman, marketing team or staff
member who are indulged in selling the product. The people are important for Bed and
breakfast restaurant in order to maintain effective sales related operations.
Characteristics of relationship marketing (Service culture, Segmentation, Database, Trust &
Commitment and Recognition & reward) to implement a successful loyal programmes
For the systematic growth of Bed and breakfast business in hospitality sector, it is
essential for a company to develop relationship marketing. In the business of Bed and Breakfast,
reward system is developed for the loyalty of customers. The regular and new customers of the
business will receive special privileges in restaurant. Special practices of providing reward
system will offer great cuisines to customers on huge discounts which will help the business in
customer retention also (Reilly, 2018). Business entity will develop a perfect plan related to
future and with the help of reward system Bed and Breakfast will achieve organisational goals.
In the recent times, many business organisations use information and technology to mainly
develop effective relationship with different customers. The major factors used by Bed and
Breakfast in customer relationship marketing are explained below:
 Service culture- The service culture of a business entity should be perfect in order to
serve major customers with utmost priority. It is compulsory for a company to give
preference to maintaining effective service culture for increasing customer satisfaction.
The Bed and Breakfast company should follow service culture in a systematic manner
for serving different categories of customers.
 Segmentation- In the development of a business, segmentation is considered as a major
function of marketing staff of a company which makes a company competent. In
segmentation of market, a business entity split up into groups that have similar
characteristics. Segmentation helps a business to identify target customers for the
business which play an important role in providing essential services to target customers.
 Database- It is also important for Bed and Breakfast to develop effective database of the
concerned customers for identifying main customers. The database of different
customers is important for organisational growth as it helps in making modifications in
product and services.
 Trust and commitment- A business firm should be loyal to various customers who are
present in the marketing environment. Loyalty helps in retention of different customers

which is important for the long term success of the company. Trust and commitment also
to leads to formation of perfect business which is ethical in nature. It is necessary for a
company to focus on trust and commitment in order to develop various ethical practices
related to the business.
 Recognition and rewards- These are the major policies and regulations used by many
organisations in order to increase employee productivity. The management of Bed and
Breakfast should provide effective recognition and rewards in the form of monetary and
non monetary benefits (Rowson, 2019) It is the main duty of top level and strategic
management in a business to set appropriate rewards in order to develop performance. In
the performance management of a business, reward system mainly helps in increasing
strength of business. The reward system also helps a business entity to develop market
related goals and achieve them in a special manner.
Illustration 1: Reward system in a business, 2021

Propose strategies of loyalty programmes in own business in the hospitality industry, which are
going to open after completion of the FdA hospitality management programme from the
Nelson College
In the era of stiff competition between different companies, it is compulsory for a
company to focus on loyalty programmes. There is strong need of formation of appropriate
strategy for loyalty programmes in order to lead the competition (Sigala, 2018). The Bed and
breakfast restaurant will give emphasis on implementation of formulated strategy related to
loyalty programmes for long term growth of business. Strategy to develop effective loyalty
programmes for Bed and breakfast is mentioned below:
 Focus- In marketing and business field, focus is the main element which should be kept
in mind by the staff. There is a need of appropriate focus on all business operations and
functions in order to grow at market. The eye of management in Bed and breakfast
restaurant should be on major functions in order to accomplish various business related
targets. Focus can be also achieved by various tools and techniques in a business and
management should use appropriate methods proposed by scholars to maintain optimum
focus in business operations.
 Growth- The main focus of a business entity should be on overall development of the
organisation which is the major target of every business (Sadeh and Garkaz, 2019).
Growth factors can be achieved by Bed and breakfast after the successful implementation
of business strategy. Many companies in competitive market focus on growth by
minimising risk, for long term growth of business entity.
 Cost leadership- Cost leadership is a way to set business apart by offering a competitive
price for developed product or service. If a business has unique strategy to lower cost
without sacrificing quality, then it can easily go ahead of its competitors. Bed and
Breakfast restaurant should focus on implementation of cost leadership with focus in
order to create value in products and services.
 Democratic leadership- In a business, democratic leadership play a crucial role by
facilitating decision making in long and short run. The democratic leadership includes
decisions which are formulated by a leader with the help of consent of employees. It is
also compulsory for Bed and Breakfast to include democratic leadership in operations for
success of business entity.

 Human relationship theory- In the recent times, most of the successful international and
national companies focus on human relationship theory. The application of this theory
develops effective relationship between employees in order to increase their productivity.
The human relationship theory also creates harmony between different employees for
achievement of organisational and individual goals. Application of human relationship
theory should there in a perfect manner in Bread and Breakfast restaurant for gaining
support and assistance of employees ( Zeleke and Kumar, 2020). It is also ethical
responsibility of human resource management in a company to focus on implementation
of this theory with the help of strategic management. In majority of cases related to
hospitality sector business, application of human relationship theory play a crucial role by
developing business milestones.

CONCLUSION
From the above stated report it can be concluded that marketing is a compulsory function
of a business which helps a firm to gain competitive advantage. This report concludes the
importance of marketing mix in a company to achieve business objectives and goals. It is also
essential for a business entity to promote products and services on regular basis in order to attract
large number of customers from the market. This project concludes that in order to attract target
customers it is necessary for a business to conduct an effective loyal programme. This project
concludes the universally adopted techniques of loyalty programmes are helpful for a business to
gain competency edge.

REFERENCES
Books and Journals
Chung, K.C., 2020. Green marketing orientation: Achieving sustainable development in green
hotel management. Journal of Hospitality Marketing & Management, 29(6), pp.722-738.
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.
Murillo, E. and King, C., 2019. Why do employees respond to hospitality talent management: An
examination of a Latin American restaurant chain. International Journal of Contemporary
Hospitality Management.
Reilly, P., 2018. Building customer centricity in the hospitality sector: the role of talent
management. Worldwide Hospitality and Tourism Themes.
Rowson, B., 2019. Marketing for the hospitality industry. In Modern Hotel Operations
Management (pp. 268-297). Routledge.
Sadeh, E. and Garkaz, M., 2019. Interpretive structural modeling of quality factors in both
medical and hospitality services in the medical tourism industry. Journal of Travel & Tourism
Marketing, 36(2), pp.253-267.
Sigala, M., 2018. Implementing social customer relationship management: A process framework
and implications in tourism and hospitality. International Journal of Contemporary Hospitality
Management.
Zeleke, S. and Kumar, P., 2020. The Effect of Customer Relationship Management on Customer
Satisfaction: Empirical Evidence From Star Rated Hotels in Amhara Region,
Ethiopia. International Journal of Management, 11(5).