Marketing and Customer Retention Strategies for Hospitality Business

This report provides an analysis of marketing and customer retention strategies within the hospitality industry, focusing on a proposed Bed and Breakfast Restaurant named "The General Buttery" in Hertfordshire, UK. It demonstrates an understanding of the marketing mix, including product, price, place, promotion, people, physical evidence, and process, and how these elements can be applied to the restaurant. The report further analyzes the characteristics of relationship marketing and its role in implementing successful loyalty programs, such as the "Discovery" program, emphasizing segmentation, trust, commitment, and service culture. Finally, it proposes strategies for loyalty programs, including creating a point system, subscription services, and maintaining human connections, to enhance customer lifetime value and revenue for the business. Desklib offers a wealth of similar resources, including solved assignments and past papers, for students seeking to deepen their understanding of marketing and customer retention.

Marketing and Customer
Retention in the
Hospitality Industry

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
1. Demonstrating knowledge addition to understanding about marketing mix, comprising
extended marketing mix of proposed business in hospitality industry........................................1
2. Analysis of characteristics associated to relationship marketing for implementing successful
loyalty programmes.....................................................................................................................3
3. Proposing strategies of loyalty programme in the company within hospitality industry........5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
Marketing is said to a business function that looks after promotion along with selling
organisational offerings in form of products or services to potential and prospective audiences.
Similarly, customer retention is an organisational practice for retaining its clients and customers
over particular time period (Mattila and Ro, 2009). In hospitality industry, it is essential for
establishments to promote the brand and keep customers, engaged, satisfied and spending that
enhances customer lifetime value addition to over revenue of company. For understanding
marketing and retention of customers in hospitality business, a new Bed and Breakfast
Restaurant that is named as “The General Buttery” is planned to be opened in area of
Hertfordshire, UK. It will offer free Wi-Fi screen TVs, cosy room feature modern décor, en suite
bathrooms along with tea or coffee making facilities. In the restaurant, parking as well as
breakfast are complimentary.
The report demonstrates understanding and knowledge of marketing mix of the proposed
restaurant. It further analyse features of relationship marketing for implementing loyal
programme in successful manner. At last, it highlights proposed strategies for the loyalty
programme in the business.
MAIN BODY
1. Demonstrating knowledge addition to understanding about marketing mix, comprising
extended marketing mix of proposed business in hospitality industry
Marketing mix is termed to set of tactics which are adopted by business with the hope of
promoting brand and its products or services. In other words, marketing mix is a technique to
guide customers for choosing organisational offering despite of electing offerings of rivals.
When a company do not account on the aspect, it hampers level of profit (Orantes-Jiménez,
Vázquez-Álvarez and Tejeida-Padilla, 2017). For The General Buttery, application of marketing
mix guides to shape the ways for delivering values to target customers. Moreover, elements of
marketing mix provide valuable directions to allocate resources, delegate responsibilities,
provide opportunity for analysing elasticity of cost benefit and facilitates communication
process. Elements of marketing mix of proposed business that is The General Buttery are
demonstrated below:
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Product: It is any good or service which meets desires and needs of consumers. It is a
bundle of utilities which comes with physical aspects including volume, name of brand, design
and hence forth. In hospitality organisation, type of product offered by company impact on its
perceived values that allows to price in profitable manner. The General Buttery provides physical
good in form of prepared food. At same time, serviced offered by the proposed hospitality
business are in form of clearing table, ambience, greeting and retaining customers, handling
challenges immediately and hence forth.
Price: It refers to the value which customers are willing to pay for offerings. It assists in
determining profit which the company is able to generate (Gupta, Dasgupta and Chaudhuri,
2012). While setting price for offerings, it is significant for managers of The General Buttery to
consider how much is spent on producing it, perceived values and price ranges of competitors. In
The General Buttery, value based pricing strategy is effective as it involves setting prices as per
apparent values of customers of products and services. With this, managers of the proposed
hospitality business are able to retain customers as it brings voice of target audiences into
process of pricing.
Place: It is distribution center of company for products and methods that are offered. it
determines place which is easily accessible to customers. The General Buttery is planning to
operate from Hertfordshire, UK that is easy to reach for providing proper assistance together
with accurate instructions to customers who books restaurant services. At the time of framing
marketing strategy, it is essential for managers to ensure that it selects the location that is easily
accessible for target people in the manner the restaurant is marketed properly.
Promotion: An element that is employed for gaining attention of large customer base for
their offering is promotion (Prachayakupt, O'Mahony and Sillitoe, 2017). It involves customer
service, advertising, sales promotions and public relations. In context to The General Buttery, it
is planning to adopt mouth to word and social media promotional strategy to improve awareness
of its customers about offerings that results in retaining them effectively.
People: It is human resource of entity that are related directly or indirectly with products
or services. In association to The General Buttery, while requirement of studying target market
so to develop understanding whether need of kind of services or product it offers, managers are
required to hire right people who are potential to give best in building the brand. Human resource
management of the hospitality company hire people for different business functions including
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marketing and sales, information technology, finance, customer relationship, human resource
management, operations and hence forth so to have talents to retain customers.
Physical evidence: It is stated to what a customer sees at the time of consuming products
and services of an entity. It entails physical environment, branding and hence forth. It
incorporates aspects which proves existence of brand and purchase took place. In The General
Buttery, interiors are attractive along with maintains clean addition to hygiene interiors of
outlets. Physical evidence not only impacts on impressions of customer of restaurant, but also on
its functioning to retain customers.
Process: In a company, systems and processes are key to build and deliver quality service
to customers (Edward and Sahadev, 2011). It is significant for managers of The General Buttery
to ensure that process is free of blockers together with bottlenecks so to reduce unnecessary
expenses that are concerned with executing services. Within the proposed business, standardised
processes are planned to be adopted for systems, consumer involvement, etc for the purpose of
creating continuity in delivering hospitality based services to retain customers. Other aspect
related to process of company includes how customers places their orders, how they are treated
by customer case assistants and how long they wait for food or other services.
2. Analysis of characteristics associated to relationship marketing for implementing successful
loyalty programmes
Relationship marketing is delineated to a strategy of company applied for building long
term relationships with large customer base. It is facet of customer relationship management
which emphasises on customer loyalty together with long term engagement despite of achieving
short term goals including individual sales and customer acquisition (Saluja and Mai, 2015). The
General Buttery is proposed hospitality business and a program that is developed by its
management team for maintaining loyalty of customers is Discovery. Through this, the restaurant
is planning to attract and retain its guests who visits the place for long term. In aspect to the
proposed organisation, objective of relationship marketing is to devise emotional and strong
customer connections that results in ongoing business, information from customers and free
word of mouth promotion to generate leads. Key characteristics of relationship marketing that
are considered by managers of The General Buttery to implement loyalty programme of
Discovery successfully are analysed below:
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Segmentation: It is splitting of market into groups which have similar attributes.
Relationship marketing is characterised as segmenting entire market on the basis of various
forms so to split audience in the manner for precisely targeted marketing along with personalised
content. In aspect to The General Buttery, relationship marketing assist in collection of pools of
data about customers and then analysing trends addition to patterns for effective customer
segmentation. It makes it easy for the business to segment demographic and then providing them
the loyalty program successfully (Tamwatin, Trimetsoontorn and Fongsuwan, 2015).
Trust and commitment: Key focus of relationship marketing is to build strong
relationship among sellers and purchases through commitment along with trust. In The General
Buttery, trust is achieved when loyalty program that is Discovery is not transactional rather it is
rational. Both orates, purchasers and sellers are required to understand that trustful relations are
attained through avoiding emphasis of short term advantages as well as devising long term
relationship. With the help of commitment and trust, loyalty program, that is Discovery is
implemented by managers for making outcomes effective, efficient and productive.
Service culture: Relationship marketing is featured as service culture as it builds an
environment in which human resources are obsessed with delivering superior customer services.
It states towards going above and beyond call of duty so to ensure that customers paying for
offering are delighted (Dixit, Lee and Loo, 2019). In The General Buttery, loyalty programme
that is Discovery is implemented successfully through providing great customer services that
results in gaining repeat customers and providing positive experience.
From implementing the loyalty program, Discovery successfully in The General Buttery,
relationship marketing is significant as it shows organisational customers that they are more
valued as well as determine requirements from business. Discovery members are able to
experience a property which truly reflect traditions and culture of organisational location, while
enjoying benefits of loyalty comprising comfort enhancing perks together with room upgrades
(Rahimi, Okumus and Köseoglu, 2017). It not only cultivates wider engagement, rather,
encourages customers to form emotional connections with brand. When relationship marketing
assist in launching loyalty program successfully at The General Buttery, its results in greater
customer lifetime values addition to consistent sales.
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3. Proposing strategies of loyalty programme in the company within hospitality industry
Loyalty program refers to a marketing tactic that is designed by business to encourage
customers for continue shopping or using offerings of company. It emphasises bring back along
with retaining current and past customers with incentives addition to initiatives that is better for
business (Teng and Barrows, 2019). In context to loyalty program, Discovery, some of proposed
strategies to be used by The General Buttery are as follows:
Creating point system: In existing loyalty program, businesses offer variant kinds of
reward points on status level, buying and other aspects. With strategy of creating point system in
Discovery, managers of The General Buttery will attract customers through rewarding them with
two stars under Gold Level tier. In this, customers will be able to earn different rewards at
variant intervals that are 20, 40, 80, 160, 320 and 640 starts. The loyalty program is able to gain
opportunity of more sales volume in a row.
Subscription service: It is a proposed strategy for loyalty program, Discovery that will
not only retain customers for specific time amount, but also offer huge incentives for customers
which they might not avail anywhere else. For instance, The General Buttery will offer discount
to customer who have the loyalty program that is Discovery at the time when they check in to
enjoy services and products. Moreover, through this strategy, customers will be able to select
how frequently they want products of company to be delivered at their table and cancel at any
point of time.
Maintaining human connections: In digital age also one on one interactions are
appreciated widely (Tanford, Shoemaker and Dinca, 2016). In aspect to loyalty program that is
Discovery of The General Buttery, proposed strategy is maintaining human connections so to
interact with people to analyse their experiences. It reflects that, while digital avenues are valued
still, having actual person available through telephone or other communication mode, is comfort
which no customer wants to be without.
CONCLUSION
From the information presented in the report, it is concluded that effective marketing and
customer retention enhances lifetime values of customers as well as boost revenues of company.
In hospitality industry, marketing assist businesses to build amazing relationships with target
audience and give them value in return. Marketing mix provides roadmap for achieving
objectives of enterprise. It keeps the enterprise on track and target market in forefront of mind
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set. Relationship marketing focuses more on customer retention, satisfaction along with lifetime
values. It serves purpose of marking to existing customers along with new customer acquisition
with the help of advertising and sales. In aspect to loyalty program, proposed strategies are
creating point system, subscription service and maintaining human connections.
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REFERENCES
Books and Journals:
Dixit, S.K., Lee, K. H. and Loo, P.T., 2019. Consumer behavior in hospitality and
tourism. Journal of Global Scholars of Marketing Science. 29(2). pp.151-161.
Edward, M. and Sahadev, S., 2011. Role of switching costs in the service quality, perceived
value, customer satisfaction and customer retention linkage. Asia Pacific Journal of
Marketing and Logistics.
Gupta, S., Dasgupta, S. and Chaudhuri, R., 2012. Critical success factors for experiential
marketing: evidences from the Indian hospitality industry. International Journal of
services and operations management. 11(3). pp.314-334.
Mattila, A. S. and Ro, H., 2009. Customer satisfaction, service failure, and service recovery.
In Handbook of hospitality marketing management (pp. 318-345). Routledge.
Orantes-Jiménez, S. D., Vázquez-Álvarez, G. and Tejeida-Padilla, R., 2017. Impact of customer
relationship management on customer loyalty, customer retention and customer
profitability for hotelier sector. Journal of Systematics, Cybernetics and
Information. 15(4). pp.36-43.
Prachayakupt, S., O'Mahony, B. and Sillitoe, J. F., 2017. An integrated customer relationship
model to improve retention in hospitality services. In Opportunities and Challenges for
Tourism and Hospitality in the BRIC Nations (pp. 95-116). IGI Global.
Rahimi, R., Okumus, F. and Köseoglu, M. A., 2017. Relationship marketing management and
loyalty in hospitality firms. The Routledge Handbook of Hospitality Marketing, pp.304-
312.
Saluja, M. and Mai, L. W., 2015. Corporate hospitality: benefits, challenges & approach in
financial services. In Proceedings of the 2010 Academy of Marketing Science (AMS)
Annual Conference (pp. 78-82). Springer, Cham.
Tamwatin, U., Trimetsoontorn, J. and Fongsuwan, W., 2015. Ensuring customer satisfaction
through service quality and image management in the hospitality industry: A conceptual
perspective. Journal for Global Business Advancement. 8(1). pp.59-83.
Tanford, S., Shoemaker, S. and Dinca, A., 2016. Back to the future: progress and trends in hotel
loyalty marketing. International Journal of Contemporary Hospitality Management.
Teng, C. C. and Barrows, C. W., 2019. Service orientation: antecedents, outcomes, and
implications for hospitality research and practice. The Service Industries
Journal. 29(10). pp.1413-1435.
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