Marketing Strategies & Customer Retention in Hospitality Sector

This report examines marketing and customer retention strategies within the hospitality industry, focusing on a Bed and Breakfast restaurant, Dine Fine. It details the marketing mix (product, price, place, promotion, process, people, and physical equipment) and its application to enhance competitiveness. The report also explores the characteristics of relationship marketing, emphasizing service culture, segmentation, database management, trust, commitment, recognition, and rewards. Furthermore, it outlines strategies for loyalty programs, including the Ladder of Loyalty model (partner, advocate, supporter, client, purchaser, prospect) and various loyalty program types such as appreciation, rewards, partnership, rebate, and affinity. The analysis concludes that effective marketing and relationship-building are crucial for Dine Fine's success in a competitive market, highlighting the importance of customer loyalty programs.

Marketing and
Customer
Retention in the
Hospitality
Industry1

Table of Contents
Introduction.................................................................................................................................................3
Main Body...................................................................................................................................................3
Marketing Mix.........................................................................................................................................3
Characteristics of relationship marketing.............................................................................................5
Strategies of loyalty programs.............................................................................................................6
Loyalty Programs....................................................................................................................................7
Conclusion...................................................................................................................................................8
References...................................................................................................................................................9

Introduction
Marketing is an important part of each and every business. It is an activity of promoting,
advertising the products or services. In marketing, products or services are promoted efficiently
so that more and more customers get attracted towards the offering of organization. Main aim of
marketing is to enhance in the profit ratio of the business entity in order to formulate positive
image of brand in market. Additionally, marketing is considered as one of effective ways of
maintaining healthy relations with customers. It also helps in enhancing loyalty of customers so
that they stay with the business entity for longer duration (Sun and et. al., 2020). In the given
scenario a Bed and Breakfast restaurant named as Dine Fine is going to start. It is a small size
hospitality organization which will offer food and stay facilities for short period of time. The
present study will comprise detailed information of marketing mix of business along with the
characteristics of relationship marketing for implementation of successful loyalty program. In
addition, it will cover strategies of loyalty program for new business.
Main Body
Marketing Mix
Marketing mix is a crucial tool of marketing that is applied in order to formulate suitable
strategies to get an edge over competitors. It is the combination of ample of elements that which
are used to promote the products or services. In addition, marketing mix refers to different set of
actions, tactics through which a company promotes its brand in market place. In context of
hospitality industry, competition is increasing rapidly (Kim, Hlee and Joun, 2016). Here,
marketing mix is helpful in enhancing the competitiveness of the business entity. In reference of
Dine Fine, it is require to implement marketing mix to ensure sustainability of business in future
period of time. Different elements of marketing mix are mentioned below:
Product: It is one of the crucial elements of marketing mix. It includes the attributes,
features of products or services which are helpful in meeting with the requirements of the
customers. In context of Dine fine, it will offer products such as rooms, food, beverages and
more (Chan, Okumus and Chan, 2020). These all products are the crucial part of services of the
entity and significantly differentiate the organization from other hospitality companies. Here,

they add new features in the existing products in order to improve the satisfaction level of the
customers.
Price: In this, organization determines the price of their products or services. It is an
essential element of marketing mix & also has a direct impact on sales of the company. Several
factors need to consider by the marketing managers while determining the price. They are
required to set such a price which is profitable for the entity and can be easily afford by the
customers. In context of Dine Fine, they will adopt affordable price strategy. They will offer the
services at such price which can be easily afford by the customers. It will help in attracting more
numbers of buyers and provide competitive advantage to the entity. In addition, the entity can
easily earn substantial amount of profit by adopting the respective method.
Place: Here, the place is one of the important components of marketing mix. It is related to
the place from where the products or serviced are offered to the end users. In addition, it also
includes distribution and supply chain management activities so that the customers receive
products in timely manner (Hsiao, Chuang and Huang, 2018). In reference of Dine and Fine,
they have been determined the prime location of London to open the new business. For this
purpose, they will select the location that is nearby to the airports and railway platforms. Here, it
will easy for the new entity to attract the customers. Suitable selection of location will help the
company in gaining edge over competitors.
Promotion: In marketing, promotion has an important place. It is an element that is relate to
advertising the products or services in an efficient manner. In this, companies adopt different
ways to advertise a product. Main aim of promotion is to grab the attention of customers. In
context of Dine Fine, they will promote services through digital techniques. For this purpose, the
marketers will use social media marketing, search engine optimization, website marketing and
other such techniques. Here, use of recent techniques will help the business entity in order to
ensure future growth and success.
Process: In each and every business, there is a complete process is followed to serve the
customers. It includes the way in which the company greets the customers, offer them services
and maintain good relationship with them (Chen, 2016). In other words, process includes the
complete procedure from arrival to the departure of the customers. In reference of Dine Fine,

they follow a complete procedure so that the customers get satisfied and avail the services of the
organization over the period of time.
People: This is an element of marketing mix that is used in the service industry. It comprises
the individuals who are working in the company. It is assumed that human resource is a crucial
part of business as they contribute in the success of business entity. In hospitality industry nature,
attitude, personality of employees plays a crucial role in influencing the perception of the
customers. In context of Dine Fine, they appoint skillful and competent employees who have the
capability of handling different situations efficiently. For this purpose, they hire applicants from
elite institutes. Here, efficient candidates significantly contribute in growth and success of the
entity in an efficient manner.
Physical equipments: This element is related to the intangible equipments and tools that are
used by a business entity when they offer services to the customers. These physical equipments
are tangible and play a crucial role in offering better and effective services to the guest (Chen
and King, 2018). In context of Dine Fine, they have such an ambiance that can easily attract the
attention of buyers. In addition, the interior of the entity is also eye-catching. Additionally, there
is a well-structured waiting room for guests. These all tangible elements make the premises of
the organization highly attractive.
Characteristics of relationship marketing
Relationship marketing is related with formulating long-term relationships with the
customers to retain them for longer duration. It is a marketing strategy that is applied by most of
the companies to maintain significant relation with the end users. Here, customers are considered
as the most important part of the business. In Dine Fine, they give significant importance to the
customers hence they pay attention towards making long-term relationship with the customers.
In this context, characteristics of relationship marketing are mentioned below:
Service Culture: Service culture refers to the culture wherein employees put efforts in order
to provide higher satisfaction to clients. Here, employees go beyond the assign duties and work
to attain maximum satisfaction level of customers (Alola and et. al., 2019). In service culture, it
is ensured that people who are paying for the goods or services are delighted. It is the key factor
which also affect the relation of company with its customers. In case of Dine fine, they prefer to

maintain such a culture wherein customers receive better services. By this way, they will be able
to encourage customers to visit restaurant frequently.
Segmentation: In this, customers having similar characteristics are combined together in a
group. It is a strategy of dividing customers into different groups so that a suitable segment can
be selected. In marketing, segmentation is crucial as it helps in making efficient use of available
resources. It allows the organization to target a specific segment to earn potential profit in future
period of time. In context of Dine Fine, they are targeting to the middle income group of
customers by offering services at affordable price. In addition, they also ensure to maintain better
relation with the target segment.
Database: Each and every company maintains a proper database so that they can connect
with the customers in future period of time (Cherapanukorn, 2019). In reference of Dine Fine,
they maintain a proper data including number, name, mail-id of the guest. They maintain the
database for future reference. In addition, this database is also helpful in staying connect with the
guest in longer run.
Trust & Commitment: Trust is the foundation of strong relation of the company and
customers. If a company wishes to get success in future, it is imperative to build trust among the
customer group. In case of Dine Fine, they run loyalty programs and fulfill the commitments.
Hence the customers also have trust on the company which encourage them to visit the
organization frequently. It will help the entity in getting success in the future period of time.
Recognition & Reward: Customers always seek for discounts, offers, rewards and more. It
makes customers feel that they are important part of the company (Lee, 2020). In context of Dine
Fine, they recognize their regular customers and also rewarded them by offering discounts and
complementary services. In addition, the organization also offers some additional services to the
new customers in order to enhance the base of loyal customers in an efficient manner.
Strategies of loyalty programs
In current time, each and every company run significant programs to enhance the loyalty of
customers. Loyal customers not only purchase the products of organization but also influence
others efficiently. For this purpose, Dine Fine adopts ample of strategies so that they can
formulate loyal customer base. In this context, Ladder of Loyalty is mentioned below:

 Partner: It includes the people who are in relation of partner with the business entity. It
is imperative to maintain good relationship with these people for future betterment
(Arbelo-Pérez, Arbelo and Pérez-Gómez, 2017).
 Advocate: In this, the customers included who are highly loyal and also do the marketing
of the company for promoting its products significantly
 Supporter: Here, those people are included who like the organization and support it
passively. Having supporters is important for future growth.
 Client: Under this, those individuals are include who have done business with the entity
in past. Here, they might have negative, positive or neutral relation with the organization.
 Purchaser: It included the person who has done business only for once with the
company.
 Prospect: Someone who can do business with the entity in future period of time is
included in the list of prospect.
Loyalty Programs
In Dine Fine, they are required to run loyalty programs in order to gain the attention of
the buyers. In this context, loyalty programs are mentioned below:
 Appreciation: In this, company can offer more of the companie’s product or services to
the customers. In addition, they can also give discount on more than one products of the
organization (Reshidi, Zeqiri and Kajtazi, 2016).
 Rewards: In this, customers are rewarded with the additional products. However, it is not
necessary that these products are of the company.
 Partnership: It allows customers to utilize rewards with other organizations.
 Rebate: It is the most lucrative offer wherein company can return a fraction of money to
the customers.
 Affinity: Main aim of this approach is to build high-value relationships with the buyers.
Generally, it does not include rewards.

Conclusion
It is assessed through above-mentioned information that marketing is a crucial business
function that is applied by the business entity to promote the products or services. It is concluded
that marketing mix is an important element of the hospitality organization. Additionally,
relationship marketing is crucial concept that is used in the service industry for maintaining
positive relation with the customers.

References
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