Impact of Sales Development and Merchandising on Hotel Sales

This report examines the role of sales development and merchandising in driving sales and profit, with a specific focus on the Four Seasons Hotel. It explores how product mix and market segmentation contribute to maximizing sales, and analyzes the factors influencing consumer buying behavior, including social, economic, personal, and psychological influences. The report further evaluates personal selling techniques and the impact of operational design on sales revenue within the hospitality sector. It highlights the importance of understanding consumer behavior and implementing effective strategies to attract and retain customers, ultimately leading to increased sales and a positive brand image for the hotel. The report also covers the market segmentation strategies and the impact of various factors on the consumer behavior and the buying decision making process. This report gives a detailed overview of how companies in the hospitality sector can effectively develop their sales and merchandising strategies.

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Sales Development and
Merchandising
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Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
a) How product mix contributes to sales and profit.....................................................................4
b) How market segmentation contributes to maximise sales.......................................................5
TASK 2............................................................................................................................................6
Factors affecting buying behaviour.............................................................................................6
TASK 3..........................................................................................................................................10
a) Evaluation of personal selling techniques.............................................................................10
b) Influence of operational design on sales revenue..................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13
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INTRODUCTION
Sales development and merchandising to attract more customers for acquiring more sales and
profit. It is totally depend on sales development team that how they provide better product and
services to their potential customers and to make satisfy them. Whereas merchandising means to
pan or promote a product to at right time by right people at market place (Ardestani and
Ardestani, 2016). Along with this, it helps in attracting potential customer towards their product
or organizations by advertising and displaying about it. In context of, FOUR SEASON HOTEL
is a 5 star hotel and it was built in 1970 as the Inn on the Park London. as along with the help of
sales department and merchandising they attract more and existing customers towards their hotel
for providing best facilities or services to their customers. Through the help of sales development
and merchandising, FOUR SEASON HOTEL, increase the sales and earn more profit which
makes a positive brand image of their hotel at market place.
TASK 1
a) How product mix contributes to sales and profit
Key components of products
With reference to Four Season Hotel, it has been analysed that this company belonging to
hospitality sector which offers variety of services to its customers. Some of the main elements
for its products includes accommodation, amenities, attraction, accessibilities, activities and
many other facilities. Some of the main facilities among them are defined as below:
Accommodation: Four Season Hotel is offering accommodation facility to different
locations of UK. It also provides accommodation on the basis of different packages such as
weekend nights, family package, seasonal packages, leisure nights etc. It can be said that by
selling these rooms for accommodation purpose Four Season Hotel is getting maximum revenue.
Attraction: The main motive of Four Season Hotel is to provide effective attraction to its
customers with the help of best physical design and structure of Hotel. In addition to this external
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designing of hotel is much more attractive then internal which influences interest of visitor to at
least use accommodation services of this hotel at least once in life (Chimhundu, 2016).
Accessibilities: This hotel is located at very attractive places which are easily accessible
to transportation facilities. It makes it easier for customers to approach easily without facing
much trouble.
Amenities: The main amenities provided by Four Season Hotel are trekking, cafes,
bathing, bars and some other ancillary services. All of these are provided to customers with high
quality by maintaining hygiene factors.
Activities and Facilities: Four Season Hotel also offers some entertainment activities
customers which engage and satisfy them in effective manner (Garg and et. al., 2017). These
services includes Laundary services, Spa and banquet hall.
Product mix and its benefits in sales
Product mix refers to the variety of products and services which are sold at market place
together. It can be seen as the strategy of company under which product are sold to customer on
sale. With reference to Four Season Hotel, it can be said product mix is the combination of
psychological and physical services which are offered to customers. This company belongs to
hospitality sector which mainly offers restaurants and hotel rooms to its customers. For this, its
top management team uses high tech promotional activities for improving their sales. In addition
to this, this hotel also offers laundary, bars, travel desk and smaller shops etc in order to improve
its turnover. Furthermore, it can be said that services this offered to its customers with some
additional benefits generally named as complimentary services (Ha-Brookshire, 2015). It can be
that offering of diversified mixture of products develops positive brand image of company which
ultimately raises its profitability through high sales. It also attracts more number of customers
towards hotel that ultimately enhances its sales in effective manner.
b) How market segmentation contributes to maximise sales
Market segmentation refers to the process through organisation mainly divides its market on the
basis of some of the common characteristics. Market segment is mainly done on four basis that is
Geographic, Psychographic, Demographic and behavioural. All four of them are specified as
below:
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Geographic: In this type of segmentation, Organisation mainly divides its market on the
basis of geographic locations. In context to Four Season Hotel, the prime location of this hotel is
mainly established in tourist area where tourist prefers to stay a lot. This segmentation helps
company in approach customers who are visiting local area the most.
Psychographic: This kind of segmentation is mainly done on the basis of behaviour, thinking,
perception and understanding of individuals. In this customers are divided on the basis of similar
kind of thinking pattern, feelings, emotions etc (Isaenko and Degtyar, 2015). For instance:
Luxury people ore explorer only prefers to go for premium packages which could provide them
satisfactory services. In context to Four Season Hotel, it can be said that they mainly offers
accommodation services to some specific customers belonging to royal families, army family
and couples.
Demographic: In this type of segmentation, company mainly divides its customer range
on the basis of different homogeneous characteristics of customers that is income, gender, age
etc. With reference to four seasons, it can be said that top management team of this company is
mainly targeting luxury lifestyle as its core customers.
On the basis of different kind of market segmentation, it can be said that all of these
market segmentation provides additional benefits to Four Season Hotel. Some of the main
benefits are defined as below:
 Market segmentation helps companies belonging to hospitality sector on emphasis in
identifying various type of customers group belonging to same sector.
 It also helps them in gaining competitive advantage by providing effective to services to
customers on the basis of their expectations (Lapoule and Colla, 2016).
 It also supports company in enhancing their sales by satisfying each group effectively.
As a result, it maximises their market share along with the profitability.
TASK 2
Factors affecting buying behaviour
Consumer behavior is the process to study how an individual take decisions while buying a
particular product over the other and what factors affects the behavior. It refers to selection,
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purchase and consumption of goods and services for the satisfaction of their needs. There are
many factors, characteristics which influence individual in what he is, decision-making process,
purchasing behavior and shopping habits which affect buying behavior. An individual is
influenced by its culture, subculture, social class, membership groups, family, personality,
psychological factors etc. initially consumer identifies those commodities which promises
greater utility. After identifying commodities consumer checks the affordability power. Lastly,
consumer analyses pricing prevailing in market and take decisions accordingly (Mandych,
Kalinichenko and Rybakov, 2016). In hospitality industry buying behavior is affected by
conditions of hotel, environment, facilities, prices, accommodation and entertainment of
consumers. So, companies should develop strategies which will help to attract and retain more
consumers. In today’s global marketplace companies should adopt open-minded consumer
oriented approach as, it will help in identifying and serving its target market with minimized
dissonance among consumers. Meanwhile, there are various factors which influence purchases
of consumers which comprises of social, cultural, economic, personal, and psychological factors.
These factors are described below:-
Social factors:-The human beings exist in complex social environment where they are
surrounded by several people having different buying behaviors. Hence, social factors influence
buying behavior of an individual to a great extent. Some of social factors include family,
reference groups, role and status which are further defined below:-
Role and status- a person participates in many groups like family, clubs, and organizations. The
person’s position in each group can be said as part of status. A role of a person is related to
activities being performed by them. Consumers choose products and services according to their
role and status in society. Marketers should be aware of status symbol of their potential
customers for their products and brand (Rathee and Prakash, 2017). In context of Four Seasons,
consumer buying is based on maintaining their status symbol in society. As, it is a luxurious
hotel consumers of high class prefer to visit more because it shows their status symbol.
Economic factors:- Economic factors are those factors that discuss about level of sales
in market and financial position of consumer i.e. how much consumer spends while purchasing
of goods and services that contributes to overall sales of company (Martynova and Valeeva,
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2015). A demand leads person to make purchase decision which is affected by economic factors
such as personal income, family income, consumer credit etc. which are discussed below:-
Personal income- personal income is very important factor which affects demands and purchase
decisions of consumer. Every person has unlimited needs but can’t be fulfilled because of limited
resources. The demands for products can increase or decrease depending upon future
expectations for income. In context with Four seasons, there is increase in number of consumers
when there is decrease in hotel prices or increase in disposable income of consumers. Also, Four
Seasons is luxury hotel so, mainly people with high personal income are its customers.
Consumers buying behavior in Four Seasons is changed or affected with the change in prices,
discounts and increase in income (Scattolini and Gregori, 2015).
Consumer credit- This refers to facility of credit available to consumers as this helps in
increasing demand. In context of Four Seasons, buying behavior of consumer is not affected
because in hospitality industry credit can’t be given to customers as, it will lead to increase in
bad debts.
Internal or Psychology factors:Buying behavior of consumer mainly depends upon various
psychology factors. These factors are difficult to find as they are internal in nature but highly
influence an individual behavior (Nagyová, Horská and Berčík, 2017). Manager of FOUR
SEASON Hotel need to analyze all the psychology factors which affects the buying behavior of
a person. Internal or psychology factors include perception, which affects the buying behavior of
consumer.
a) Perception: Perception is a process in which an individual try to interpretor
understand the world around us. It is a mental process where a person understand or
give a meaningful sensation about a particular object. In context to FOUR SEASON
hotel,perceptionof a person towards the company mainly influence their buying
behavior. Positive brand image of the company helps in attracting more and more
customers towards their hotel.
Cultural factors: Combination of values, education, upbringing of a person comes under the
concept of culture. Cultural factors consist of various set of values, beliefs and ideologies of a
particular person or group of individuals. It is an individual culture which decides how a person
behaves in a particular situation (Senanayake, 2015). Whatever person learns from their parents
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or from society as a child becomes their culture. Cultural factor consist of two categories one is
culture and other one is social class.
A) Culture: Culture is nothing but a set of different values and beliefs which
affects the buying behavior of consumer. Mainly culture passes from one
generation to another. Different people have their own taste and preference
which mainly changes according to the time or environmental change. In
context to FOUR SEASON hotel, company need to change its strategies and
policies according to the changing environment. In order to sustain and
maintain the competition at marketplace company need to change its plan and
strategies according to the changing situations .
B) Social Class: social class is the combination of different factors which
includes income level, education, power and authority, life style and many
more. There are three different classes in the society. Upper, middle and
lower class. Upper class purchase High quality products to maintain their
status. Middle class individuals purchase after analyzingand comparing the
cost and quality of product. In the present context, high class society
continuously visit to maintain their status and symbol whereas middle class
society occasionally visit to hotels and restaurants . Personal factors: Personal factors affect the buying behavior of consumer which mainly
includes age, occupation, income and life style. It is an individual persons factor which
affects the overall behavior of consumer towards buying a particular product.
a) Age: Age and life style have a potential impact on buying behavior of an
individual. Needs and wants of consumer change according to time and
situation. In context to FOUR SEASON hotel, people between the age group
of 20-35 years visit on a regular basis.
b) Lifestyle: lifestyle is a manner in which a person or individual lives in the
society. Lifestyle of a person affects its the buying behavior. It is the opinion
or choice of a person how they express or interact with external environment.
In the present context, youngster mainly attract towards high class lifestyle or
society. As a result young peoples are more attracted towards hotels and
restaurants as compared to other age group.
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TASK 3
a) Evaluation of personal selling techniques
An evaluation of personal selling technique
Personal selling is a tool though which salesperson can convince a customers to purchase
their product. Sales person is not only provide an information to their potential customer, also
they use their skills to convince or encourage them to remind about product characterstics,
service agreements, deals and so on. In context of FOUR SEASON HOTEL, personal selling
plays a very important role as, it helps in developing a relations at the market place. Along with
this, it also helps in attracting tousist or visitors towards their facilities of hotel. This approach
helps FOUR SEASON HOTEL, to improve their brand image at marketplace. There are various
personal selling techniques which is used by FOUR SEASON HOTEL, are discussed as below:
Visiting the customers: it means to visiting many organizations, traders, merchants, clubs that
they plan for tour or stay outside, that time company provides an information regarding hotel
through presentations (Tarasova and Kadatskaya, 2015). It can be a in- person or virtual
presentation. Sales presentation is a very common or important technique of personal selling. In
context of FOUR SEASON HOTEL, they sell the rooms to their customers by providing various
information regarding their hotel
 Conversations: it means to build a relationship with their customers for the purpose of
influencing or making positioning at market place. In context of FOUR SEASON
HOTEL, this technique helps them to convince their customers easily by their
communication skills. Along with this, they make a long term relations with their
customers and also it creates a positive of their hotel at market place. It is the most
important and easiest concept for convincing or influencing people regarding their hotel
or its facilities.
 Internet sales: it means to provide information regarding their industry by the medium of
internet. They provide an information or promoting their industries through social
networking sites or in websites. In context of FOUR SEASON HOTEL, they provide
various information to their customers regarding their rooms and services through
websites. Along with this they can also book the rooms though their official websites.
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