Pricing Strategy for Intercontinental Hotels: Assignment

Added on - 03 Dec 2019

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Research Topic: Pricing Strategy forIntercontinental Hotels1|P a g e
Table of ContentsPricing Strategy for Intercontinental Hotels...............................................................................11. Introduction............................................................................................................................11.1 Background......................................................................................................................11.2 Literature Review.............................................................................................................21.3 Aims................................................................................................................................31.4 Objective..........................................................................................................................32. Methodology..........................................................................................................................42.1Research Tools..................................................................................................................42.2 Bias...................................................................................................................................42.3Ethical Issues.....................................................................................................................42.4 Validity and Reliability....................................................................................................52.5 Limitations.......................................................................................................................53. Data Analysis.........................................................................................................................53.1 Management.....................................................................................................................53.2 Customers.........................................................................................................................6....................................................................................................................................................74. Discussion..............................................................................................................................85. Time scale...............................................................................................................................8Conclusion..................................................................................................................................9REFERENCES.........................................................................................................................11Appendices...............................................................................................................................13Appendix 1...........................................................................................................................131|P a g e
PRICINGSTRATEGYFORINTERCONTINENTALHOTELS1. INTRODUCTIONIn this research report pricing strategy that is adopted by the Intercontinental hotels isidentified and discussed in detail. In respect to this, a primary research on firm pricingstrategies was conducted under which data is collected from local people and corporate. Apricing strategy is a plan under which firms charge an amount for the service delivered bythem to their customers. By formulating and implementing sound pricing strategy hotels willbe able to determine different prices by using which it will achieve huge profit, growth inrelevant industry. By doing this it will be able to beat its rival firms in relevant industry.Companies prepare pricing strategy in order to achieve their long and short term goals as wellas objectives (Spencer, 2010). However, business objectives are achieved in a manner themanagement appreciates internal and external factors within business unit.Thus, in this research report pricing strategy of the firm will be compared withcustomers’ opinions which are given in second part of research. Information aboutcustomers’ opinion is collected in order to find out opinion of customers on the price for theservice that they charged on their customers. In order to better understand pricing strategy itwill be good to read the available literature on strategies implemented by competitors at themarket place. Review of such kind of literature will help in identifying strategiesimplemented b the companies at ground level in relevant industry. This will certainly helps incomprehending pricing strategy followed by companies in the industry (Tso and Law, 2005).Hence, by reviewing available literature researcher will get an overview about pricingstrategy employed in the industry and factors that affects industry. In this report, employedresearch methods will be explained in detail. Theoretical literature will be reviewed in orderto prepare project report in better way. It is also necessary to highlight the background ofresearch into consideration.1.1 BackgroundMentioned topic was selected because there are numerous Intercontinental hotels inmany towns. The main objective of research is to understand the pricing strategies of thesehotels which are important element of marketing mix. It is commonly said that companiesdetermined price of their products by considering level of service quality they give to theircustomers while delivering a service to them (Wang and Chung, 2015). Therefore, it will benecessary to identify the way which companies are using in order to compete with their rivalfirms on the basis of price.1|P a g e
The consumer behaviour of the people is very difficult to understand because it keeps onchanging with passage of time. Pricing strategy is a weapon that can be used to attract peopletowards company product. A marketing segment is group of people with some uniformcharacteristics that a company wants to target for selling its product. According to Jobber(2004), firms must draft messages, set pricing level and direct other strategic efforts forcompelling target customers for making purchase of the company product (Steed and Gu,2005). Due to this reason, the pricing strategy is commonly used for positioning a product.Hence, the main aim of this research is to comprehend the Intercontinental hotel’s efforts interms of their pricing strategy. Nevertheless, literature review will help in understandingpricing strategies employed by competitors.1.2 Literature ReviewMany firms in this industry are using multiple plans in order to enhance theircustomer base. In other words, it can also be said that they are not sticking to single plan. Astrategy is a kind of plan which is prepared to achieve objective in pre determined time period(Collins and Parsa, 2006). For research Hilton hotel is taken as intercontinental hotel which isa 5 star hotel and known for charging a premium prices for its products and services. Themission of Hilton hotels is to make available best services money can buy. Due to this reason,Hilton hotels are using premium pricing strategy for selling its service. A price skimmingstrategy is a tactic in which a company sell its products at high price in order to attract thosepeople that wants excellent quality service (Hung, Shang and Wang, 2010). There are manycustomers who do not like to use services of hotels that do not promise good quality ofservice. As a result, under price skimming strategy business executives and wealthy peopleare targeted for company products and services.Hilton hotel charge premium price for its service and it justified its pricing policy byoffering quality services to the customers. In this industry companies must charge price fortheir services as per industry trends. Hence, if prices are too high then Hilton hotel needs toprovide innovative service whose substitute is currently not available to the rival firms. If thisis not possible then by doing price discrimination firm can successfully retain its loyalcustomer base. A hotel such as Hilton and Sheraton in comparison to peer firms alwaysfocuses on bringing up innovations in their services so as to differentiate their offers andjustify their high prices (Enz, 2009). The hospitality industry provides a service that makestheir customers feel comfort in their rooms. Therefore, companies operating in this industry2|P a g e
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