Marketing Strategies for Customer Retention in Hospitality Business

This report explores marketing and customer retention strategies in the hospitality industry, focusing on a new Bed & Breakfast restaurant in London. It analyzes the marketing mix (7Ps) and characteristics of relationship marketing to implement a successful loyalty program. The report proposes strategies for enhancing customer loyalty, including leveraging data insights, ensuring reward program transparency, and fostering a strong service culture. Ultimately, the aim is to improve customer experience, satisfaction, and brand loyalty, leading to increased sales and profitability. Desklib provides access to this and other solved assignments for students.

Marketing and
Customer Retention in
the Hospitality
Industry1

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Demonstrating marketing mix on the context of hospitality industry of Bed & Breakfast
restaurant................................................................................................................................1
Analysing characteristic of relationship marketing for implementing successful loyalty
program...................................................................................................................................3
Propose strategies of loyalty program of business in hospitality industry......................5
CONCLUSION................................................................................................................................5
References:.......................................................................................................................................7

INTRODUCTION
Marketing refers to the sum total of all those activities which are performed by an
organisation for the purpose of reaching to the customer in order to selling the products. The
marketing department is responsible for performing the task of research and development. So
that they can know about the needs and demand of customers. Adopting the correct marketing
strategy leads to the success of organisation. Hospitality industry is famous for performing
operations in order to gaining customer satisfaction. Hospitality industry include several of
businesses such as travel and tourism, fun zone, food and beverages and many more. This report
is based on the introduction of new restaurant i.e. Bed & Breakfast. It is located in London,
United Kingdom. This report deals with the marketing mix and features of marketing
relationship is analysed in order to implementing the loyalty programme successfully.
Furthermore, several of strategies are developed for loyalty program in hospitality industry.
MAIN BODY
Demonstrating marketing mix on the context of hospitality industry of Bed & Breakfast
restaurant.
Marketing Mix is a tool which is used by the organisations for the purpose of indicating
the several marketing variables in order to targeting the customers and marketing segments.
Below mentioned are the 7Ps of marketing mix in the context of Bed & Breakfast Restaurant.
 Product: It refers to the products or serv8ces which are offered by the organisation to
their target customers. The producer have to take several decisions regarding the
products while taking decision of production (Mody 2019). These decisions include
design, variety, quality and many more. It help the organisation in generating higher
revenue along with a good and healthy relationship among the organisation and
customers. In the context of Bed & Breakfast restaurant, they have a lots of options of
providing products such as sandwiches, desserts, shakes, salad, coffee and many more.
They have to take the decision of their production as per the needs and requirements of
customers. So that they can attract the customers and earn huge amount of profit.
 Price: It can be defined as the cost which a customer pay in the exchange of product or
service. The price is linked with the real product and value is perceived. It is necessary
for the Bed & Breakfast restaurant to consider other cost such as supply costs,
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competitor price, seasonal discount and many more while setting the prices for their
products. They have to take the decision whether the prices are high or less as high
prices give the luxury appearance to their products and low prices will attract the
customers to try the products of Bed & Breakfast Restaurant. The profit margins and
volume of sales of products of Bed & Breakfast Restaurant is depend on the pricing
strategy of the organisation.
Place: It refers to the location where the customers can access the products and the producer can
offer. More crowded place plays an important role in attracting the customers. The Bed &
Breakfast Restaurant can make available their food products on kiosks, mobile applications and
other online websites (Karunaratna 2018). Customers are consider as the king of business as they
leads to the source of generation of revenue. They start providing their product in London and
after the success of their first store, they can expand their business operations at several new
locations.
 Promotion: It refers to the process of providing the product related information to the
customers so that a need is develop which result in the sells of products. It can be said as
the continuous process which is being used by the management to attract the customers
towards their products and organisation. The Bed & Breakfast Restaurant can use the
several of promotional tools such as advertisement, publicity, pubic relation, social
media marketing, direct marketing and many more for the purpose of reaching to the
customers. They also have option of providing discount coupons for the purpose of
increasing the demand of certain products (Park 2020).
 People: All the services in an organisation are provided by the employees. Along with
this, they are in direct contact with the customers. The Bed & Breakfast is required to
hire trained and skilled employees for their restaurant as they can provide best services
to their customers because the services which they provide to their customers help them
in developing the brand image and overall quality (Konovalova, E.E. And et.al., 2018)
The management also have the option of taking feedback from customers so that they
can improve their services and develop a brand image.
 Process: It refers to the procedure which implies effect on organisation such as how the
employees are handling the customers and how they are delivering the services. The Bed
& Breakfast Restaurant is required to some specific tasks such as solving customers
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queries, measuring and tracking the performance. The management have to take care of
some producers in The Bed & Breakfast Restaurant such as maintaining and recording
bills.
 Physical Evidence: It refers to the tangible factors of environment under which the
business organisation perform their operations. Physical evidences of The Bed &
Breakfast Restaurant include packaging, layout of physical store, delivery receipt, table
design, menu cards, uniforms and many more. By improving these evidences, the
organisation can improve the marketing strategies (Sipe, L.J. and Testa, M.R., 2018).
Analysing characteristic of relationship marketing for implementing successful loyalty program.
The marketing relationship can be defined as the relationship of customers and
management which do focus on creating the brand loyalty and long term customer engagement.
The main objective of marketing relationship is to create the strong and emotional relation with
the customers. So that thy can gain the advantage of free word-of-mouth promotion.
Several of loyalty programs are sponsored by the retailers under which they offer rewards
and discounts along with the other special incentives with the motive to attract and retain the
customers (Curatman 2021). The Bed & Breakfast Restaurant perform the loyalty program of
BEDBREAK REWARD under which the customers will get a free meal on the purchase of
Combo of The Bed & Breakfast Restaurant and this offer is valid for the next 12 months. The
characteristics of this program are given below:
 Service Culture: By following the customer centric approach the organisation can
motivate the customer by providing them best services and focusing on the satisfaction
of their customers. It leads to the creation of inside and outside value of organisation for
others. In the context to Bed & Breakfast restaurant dispatcher of relationship marketing
help the organisation in retaining customers which result in the the higher sales and
profitability. Along with this it will also result in creating brand loyalty and developing
the demands of clients and becomes the brand ambassadors. The sales of product and
employee services preferred the needs of customer first while presenting solutions and
providing support. Developing a service culture required time and consistency.
 Segmentation: It refers to the process of dividing the various market segments of market
which result in the offering of best products and services according to the needs, desire
and ability of paying to customers (Kwiatek 2018). Segmentation has been done on the
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basis of division of groups of certain similarities of taste and preferences of customers
which facilitates Bed & Breakfast restaurant in improving their program of loyality. It
also leads to the Awareness of Band in the market and the client service handle in a
perfect way.
 Database: It refers to the practicing of leveraging data for delivering more personalized
and effective message to customers. It can be considered as the application of marketing
program aiming of acquiring new clients. In the context of Bed & Breakfast, the group of
customers are identified and a best Loyalty program is provided along with the high
value customers and occasional buyers in database marketing relationship. It also leads
to the improvement of overall interaction along with the customer service with the brand.
Both the internal as well as external sources of customer data is used in database
marketing which leads to the acquisition data and demographic data.
 Trust and Commitment: In the process of marketing relationship it is necessary to have
the presence of two fundamentals of trust and commitment which leads to the creation of
bonds with customers by fulfilling their needs and requirements and honouring
commitments. Trust can be defined as a confidence which is presented in both the parties
and commitment in a long-term desire for maintaining the valued partnership
(Menicucci, E., 2018). It helps the business in developing trust and relationship with
their customers. In the context of a Bed & Breakfast it will provide promise at every
stage of customer journey so that the customer can reach towards the restaurant.
Recognition and reward: While motivating employees, it is considered as the best method of
motivating employees. Through providing rewards the organisation motivate Their employees so
that they can improve their performance on individual or group level. When the recognization is
combined with the reward system they provide psychological and financial benefit to the
Employees (Budur 2021). The reward and recognition help the employees in performing the
better way Bichhoo result in providing the great service to their customers which result in the
brand loyalty of the organisation. Hence the Loyalty program maintains the good relationship
and business sales in enhancing which in coverage action and boost connection with restaurant in
context to Bed & Breakfast.
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Propose strategies of loyalty program of business in hospitality industry.
Customer loyalty programs are the core practical mechanism for altering behaviour of
specific customers which helps in focusing on acquiring new customers for stopper The
loyalty marketing refers to the strategy which leads to the customers for repeating business
with company frequently. The loyalty marketing is helpful in making focus on bringing back
and retaining the present and past customers so which leads to the creation of initiatives and
incentives. For the purpose of a building an effective customer retention and loyalty
solutions, The Bred and Breakfast restaurant required to know about the various loyalty
programs strategies.
Data insights for better understanding of existing customer base: The opportunity of getting
data insight on customer benefits leads to the improvement of customer experience along with
the satisfaction. This is possible only because of best practicing of Loyalty program which offer
the choice of services (Book 2019)
. The Loyalty program in financial services provides benefit of inside by gaining people who
may choose awards for long term action. It has been found that the best loyalty programs are
connected with the owner customers database and managed in such a manner which can be
used for increasing sales and improving customer satisfaction.
Openness in making reward program stands out from the crowd: It has been found that
more open systems are beneficial for all the present customers. The openness is unavailable
which creates the loyalty programs as well. In the context of bed and breakfast restaurant,
the reward programs help the members for freely exchanging points. Along with this it also
provide a better insight on customers so that more choices can be made by customers.
CONCLUSION
It has been concluded from the above report that it is necessary for hospitality industry to
provide best quality of services as there is a lots of competition in the market. Only by providing
the best services to their customers they can achieve their targets. In this above report customer
perception is analyzed with the respect of newly established restaurant named as the bed and
breakfast restaurant. The analysis provide an overview of marketing mix for having competitive
edge in market. It has been found at the royal customers of an organisation are considered as the
assets for their company and they give more attention to them while providing services and
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goods as it leads to the development of customer retention and Loyalty program. With the
effective Strategies for Loyalty program is formulated for survival in the highly competitive
market.
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References:
Books and Journals
Book, L., Gatling, A. and Kim, J., 2019. The effects of leadership satisfaction on employee
engagement, loyalty, and retention in the hospitality industry. Journal of Human
Resources in Hospitality & Tourism. 18(3). pp.368-393.
Budur, T. and Poturak, M., 2021. Employee performance and customer loyalty: Mediation effect
of customer satisfaction. Middle East Journal of Management. 8(5). pp.453-474.
Curatman, A. and Suroso, A., 2021. Loyalty program and communication effectiveness as
drivers of store loyalty. Measuring Business Excellence.
Karunaratna, A.C. and Kumara, P.A.P., 2018. Determinants of customer loyalty: A literature
review. Journal of Customer Behaviour. 17(1-2). pp.49-73.
Konovalova, E.E. And et.al., 2018. Forming approaches to strategic management and
development of tourism and hospitality industry in the regions. Journal of
Environmental Management & Tourism. 9(2 (26)). pp.241-247.
Kwiatek, P., Morgan, Z. and Baltezarevic, R., 2018. Actions speak louder than words:
Understanding the meaning of loyalty program building blocks. Economics &
Sociology. 11(2). pp.305-319.
Menicucci, E., 2018. The influence of firm characteristics on profitability: Evidence from Italian
hospitality industry. International Journal of Contemporary Hospitality Management.
Mody, M., Hanks, L. and Dogru, T., 2019. Parallel pathways to brand loyalty: Mapping the
consequences of authentic consumption experiences for hotels and Airbnb. Tourism
Management. 74 . pp.65-80.
Park, J. and Min, H.K., 2020. Turnover intention in the hospitality industry: a meta-
analysis. International Journal of Hospitality Management. 90. p.102599.
Sipe, L.J. and Testa, M.R., 2018. From satisfied to memorable: An empirical study of service
and experience dimensions on guest outcomes in the hospitality industry. Journal of
Hospitality Marketing & Management. 27(2). pp.178-195.
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