JW Marriott Case Study: Product Development, Pricing, and Performance

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Hospitality Operations Management
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Table of Contents
Introduction..............................................................................................................................3
LO1..........................................................................................................................................4
LO2..........................................................................................................................................7
LO3........................................................................................................................................10
LO4........................................................................................................................................13
Conclusion.............................................................................................................................15
Reference List........................................................................................................................16
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Introduction
Managing the operations within the hotel industry is considered an important aspect of the
organisations. It is important for the operations manager to make sure that they are making
use of their different departments to meet with the requirements of their workplace. It is
necessary for the operations manager to understand the demand in the market. This will
help them to develop the quality of their services and products in the market. The company
that has been chosen to complete the study is JW Marriott. This is one of the leading hotel
companies in the United Kingdom and is known for providing best customer service in the
industry. Besides this, they have a range of products that will be analysed in the course of
the study. The company uses a range of pricing strategies to price their products in a
feasible manner. Apart from this, the different performance measures will be used to gain the
attention of the customers in the market.
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LO1
1.1 analyse the nature of different hospitality product and service areas
The hotel is known to provide a wide range of goods and services to their customers in the
market. As a result, they are able to get their attention and the customers are attracted to
using their products offered in the market. It is important for the management authority of JW
Marriott to know about the demands of the customers in the market (marriott.co.uk, 2019).
This will allow them to meet with the exact needs of the customers. The hotel looks to
provide adequate room service to the customers. As a result, they will be able to keep their
guests satisfied within the premises of the hotel. Besides this, the management of JW
Marriott should be able to make sure that the quality of their food and beverages are up to
the customer’s expectations. They have to make use of conference and banqueting so that it
allows the customers to make use of the hotel services for the purpose of their business
(Bowie et al., 2016).
Developing the quality of their services will help them to ensure that they are being able to
perform in the market, despite the extensive competition from other hotels in the same
sector. Another important thing that the company should aspire is their effective
maintenance of their product prices. This will allow them to reach out to the target customers
and conduct their business in an efficient manner. The hotel also aims to provide quality
services to their customers in terms of their stay at the hotel. They have to focus on the
sales and marketing of their products. This will assist them to ensure that their business is
being done in the right manner.
1.2 evaluate the different influences affecting patterns of demand within hospitality
operations
There are certain factors within the hospitality industry that has an impact on the demand of
the customers. As a result, it becomes important for the management of JW Marriott to
know about these factors so that they are able to tackle the negative impact on their
business. Some of the major factors are as follows:
Sociological Factors
The hospitality industry is affected by the sociological factors in different ways. The changing
needs and demands of the customers have allowed JW Marriott to reconsider their products
and services in the market. The growth of Air BNB is a serious threat to some of the leading
hotel companies operating in the market.
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Cultural Factors
In majority of the cases, there is difference in the culture of the individuals making use of the
hotel services. Due to the cultural difference, customers often refrain from using these hotel
services. As a result, the hotel suffers in terms of their productivity in the market (Molina-
Azorín et al., 2015).
Healthy Eating
In the recent days, it has been observed that customers have become more conscious
towards maintaining their food habits. This makes it important for JW Marriott to ensure that
the quality of their services and products are developed to suit the requirements of the
customers.
Food Trends
The management of JW Marriott should ensure that they align their services in accordance
to the newly developed trends in the hospitality industry. They have to develop their cuisine
food so that it helps them to gain the attention of the customers in the market. Beside this,
One Dish Wonders is an important trend that has developed in the recent times.
Accommodation Trends
The customers often look for better accommodation in terms of using the hotel industry. JW
Marriott should be capable of providing different types of accommodations such as lodgings
and food services. This will increase their profitability in the market.
Pricing Factors
It is important for the hotel to make sure that they price their products in such a manner that
it is neither too high nor too low (Davis et al., 2018). This will allow them to increase their
productivity by meeting with the demands of the customers.
1.3 Compare customer profiles and their differing expectations and requirements in
respect of hospitality provision
The higher authorities of the hotel should be able to compare the profiles of the customers
based on their age, gender, tastes and preferences. The service providers at JW Marriott
should be able to know about the age of the customers and provide required
accommodations in their list of services. They should include services for every type of
customers. Moreover, it is important to understand the preferences of the customers in terms
of their spending power so that they can price their products accordingly (Jones et al., 2014).
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The customers using their services have a certain level of expectations in the market. The
management authority should be able to ensure that they are providing for the customers in
an adequate manner. Some customers might look for the food quality to be better. However,
some other may want that the Wi-Fi connection should provide enough speed for their
usage. Besides this, there are certain customers that look for proper accommodations in the
premises of the hotel (Dzhandzhugazova et al., 2016).
As a result, it becomes necessary for the managers and staffs to work in collaboration with
one another so that they are able enhance the quality of their services and meet with the
expectations of the customers. The customers will be able to spend based on their income in
the market. As a result, JW Marriott should be capable of pricing their products in an
appropriate manner.
1.4 analyse factors affecting average spending power in hospitality businesses
Maintaining the management and operations within the premises of JW Marriott is
important, as it helps them to enhance the quality of their services and products. They have
to ensure that they employ their different departments in such a manner that they are able to
conduct an extensive market research (Nagle and Müller, 2017). This will help them to
understand the requirements of the customers. However, they have to focus on their process
of decision-making so that it helps them to make use of the available resources within the
organisation. Moreover, it will allow them to ensure that the customers are able to increase
their spending power. They should also focus on the use of new and advanced
technologies in the workplace so that it helps them to manoeuvre their different aspects of
the business. They have to train their employees to use these technologies. It will allow them
to enhance the customer experience that is provided. Besides this, it has a positive impact
on the spending power of the customers (Danziger et al., 2014).
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LO2
2.1 Evaluate the key stages in product and service development applied within a
hospitality operation
The management of JW Marriott should be able to implement all the key stages of their
product and service development in the market. The application of the stages has been
outlined below:
Market Research
It is important for the marketing department of the company to perform an extensive market
research so that they can have an idea about the market trends (Ivanov, 2014).
Market Segmentation
JW Marriott would look to segment the market based on the type of customers that they
cater. They look to develop their products and services for the higher-class people of the
society.
Idea Evaluation
The higher authorities should be capable of evaluating their ideas in the market. this will help
them to increase their productivity and profitability in the market.
Concept Development
They have to develop their concept before they are able to develop their products. The
employees alongside the management should be capable of developing the concept of their
services and products (Ma et al., 2014).
Product Development
This step is important, as it allows the company to focus on the requirements of their
customers in the market. This enables them to develop their products in a required manner.
Advertising
JW Marriott should be able to advertise their services and products with the help of different
social networking sites and their own websites. This will help them to attract the customers in
the market and operate in a successful manner.
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2.2 Analyse the features, which contribute towards the customers’ perception of
products and services
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The hotel should focus on using different pricing techniques so that it has a positive impact
on the perception of their customers. Some of the techniques that could be used are as
follows:
Pricing techniques
The company should develop their prices according to the reviews that have been gathered
through the process of feedbacks. The positive reviews will help them to price their
products in a certain manner. Besides this, they can ensure that the customers are getting
value for their products.
Matching price according to target market
The company can also use rate parity strategy that will assist them in pricing their products
and services in a similar manner. This will help them to maintain a certain level of
transparency amongst their customers in terms of their online business (Chang et al., 2014).
Matching price according to local market
In order to operate in the local market, the company should be able to offer a package to
their local customers. This will allow them to gain the attention of the customers in the
market.
2.3 Assess the opportunities and constraints affecting product and service
development within a hospitality environment
In order to analyse the impact of revenue on the services and products of the company,
Yield Management Theory can be used. According to this theory, the price of their
commodities can be estimated in the market. It enables the management of the company to
understand the demand patterns in the market so that they can manufacture their products
to meet with the consumer demands (Gmelin and Seuring, 2014).
Maintaining the Gross Profit (GP) will help them to increase their revenue generation in the
market. As a result, they have to maintain the quality of their food and beverages that are
being offered in the market. JW Marriott will be able to enhance the quality of their food and
beverages for the betterment of the customer service.
2.4 Evaluate different merchandising opportunities for hospitality products and
services
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JW Marriott has certain opportunities that allow them to merchandise their products in an
authentic manner. They should focus on developing their own website so that it becomes
easier for them to reach to the target customers. JW Marriott should look to ensure that they
are different from the other companies in the same sector. As a result, it becomes easier
for them to understand the demands of the customers in the market (Lee et al., 2014). It
enables them to provide the customers with better products in the market. Promoting their
products in the market also provides them with enough opportunities to develop their
merchandise. They have to make use of adequate promotional strategies so that it helps
them get the attention of the customers.
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LO3
3.1 Evaluate different methods of pricing taking into account additional pricing
considerations
The hospitality organisation aims at availing the customers with an excellent set of services
that can enhance the satisfaction levels of the customers. In the present generation, there
are several hospitality organisations in the market and therefore, JW Marriott has several
methods of pricing that allows them to provide the customers with services that are regarded
as excellent. The following depicts the three main types of pricing methods that are used by
the hospitality organisations:
 Skimming: This pricing method allows the organisation to marks higher prices of the
commodities and gradually decreases the price over time that promotes the consistent
sales of the products (Baker et al., 2017).
 Neutral: This pricing strategy allows the organisations to set a price that sets a feeling in
the customers to be apathetic regarding the products and the prices as the prices of the
products are also considered as a benefit.
 Penetration: This pricing strategy allows the organisation to set the prices of the
products lower to an extent that the customers decide to change their perspectives and
decide to stick with the organisation (Chang et al., 2016).
The pricing strategy has direct significance with the customer target of the organisation.
Since JW Marriott provides excellence in their services, it is quite natural that the costs
included are high. Therefore, the organisation aims at high profile customers. Therefore, the
skimming pricing strategy is used by the organisation as most of the customers they serve
belong to a higher profile.
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Figure 1: Different methods Pricing
(Source: Created by the Learner)
3.2 Assess the factors, which affect revenue generation and profitability in hospitality
operations
Several factors affect the revenue generation of the hospitality organisation. The revenue of
the entire organisation highly depends on the roles as well as responsibilities of the different
functional departments of the organisation. Thus, several variables influence the customer
satisfaction and revenue generation. The following depicts the factors that impacts the
revenue generation of the JW Marriott:
Product quality: The quality of the products as well as available services highly determines
the revenue generation of the hospitality organisation, the customers visiting the hospitality
organisation expects their needs as well as requirements to be fulfilled by the organisation
(Kaura et al., 2015). Therefore, the quality of the products and services highly affects the
revenue as the customer satisfaction depends on them.
Target customers: The target customer base of the organisation determines the spending
power and particular consumer behaviour. The JW Marriott aims at providing service to the
higher classes and therefore, the prices of their products as well as services are
comparatively high.
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