Wednesday, September 19, 2012

Service and Sales in Hospitality Management 02

1.      Briefly describe yield management.
Yield management is maximising the revenue that is brought from a set number of units that are not otherwise transferable. To achieve maximum profits businesses segment their market and set their prices accordingly. For example a hotel might set different rates for weekends than for weekdays so as to achieve higher profits. Or they might differentiate between group rates and individual rates. Yield management is not a method designed to raise occupancy; rather it involves ‘guessing’ how many rooms should be allocated to each market segment to achieve the desired profits. In short yield management is a form of price discrimination to maximise revenue per available room and the formula is (REVENUE RAISED / REVENUE POTENTIAL) * 100

2.      What is the purpose of public relations and identify three ways hospitality business could promote PR?
The definition of public relations is: ‘The deliberate and sustained effort to establish and maintain mutual understanding between an organisation and its public’.

·         In the hospitality industry good PR are promoted by the staff itself firstly. Many front – of – house staff such as a receptionist managers or even porters will know many of the repeat customers by name and make them feel ‘special’.

·         A second way is when the business itself becomes known by announcing changes (in management policy etc) exposing itself to the public. Once the potential customers know so many inside details about the hotel, restaurant etc they will feel as part of the family and will be inclined positively towards the company.

·         A third way is when the business is examining the trends and gets involved with the local community. For example supporting a local charity or other worthy cause. Many hospitality businesses offer ‘free rooms’ as prizes at charity balls or low rates for red cross workers etc. A lot of hotels decided to go green not because the law forced them to but because of pressure from potential guests and the need for good PR.

3.      You have been asked to make a presentation to the General Manager of a brand new 4 star hotel on how marketing techniques can be used to maximise sales.
Marketing is defined as ‘the process by which companies create customer interest in goods or services through which companies build strong customer relationships and creates value for their customers and themselves’.

A marketing plan for this hotel will entail identifying the market segments that must be approached and set our targets. This is a centrally located hotel that will appeal to businessmen and people who are sightseeing as it is close to all major attractions. However it is not a resort so it doesn’t attract many holiday makers who wish to have extended stays. So our targets are maintaining the customers we already have and expand to attract holiday makers who wish to stay longer.

The hotel needs of course to be advertised and print advertising is an effective marketing technique. Choosing the appropriate magazine or newspaper will allow us to appeal to specific audience. So an ad in Business week will attract business people and an ad in Conte Nast will definitely sent some ‘tourists’ our way.

At this stage a radio ad might not be a bad idea. It could be more costly than a printed ad but I am confident that the results in sales will be worth it. Radio and television make it easier to reach large segments of the market.

And of course one mustn’t forget direct mail marketing. The hotel at the moment doesn’t have a large database of former guests but still there are ways of obtaining mailing lists from marketing companies and promote our services to potential guests.

I believe that with the correct balance of the above mentioned tools the hotel will be able to achieve it’s goal and establish itself on the market.
4.      Describe with examples the four stages involved in market analysis.
A.      Identify the market. Once the product is ready it is necessary to promote it to the people that will find it appealing. But the market is comprised of several target groups that should be addressed. For example a budget city hotel’s market the corporate people who need accommodation after their conference / business meetings as well as holiday makers in transit who need to make a stop before changing to the train / airplane that will take them to their final destination.

B.      Identifying market factors means examining the reasons a hotel could be popular or unpopular. For example a city hotel could be popular among the young crowd because it is close to the pubs and nightclubs but not very popular with the older generation who needs a place to relax. Accommodation demand could be very high in a seaside area during the summer season but very low during winter. Good connections to the city centre could attract a great deal of corporate guests as opposed to a hotel located in a more remote city area.

C.      Estimate market potential which means that after having established the market and the product most suited to cover the potential needs of the guests it is time for forecasting. A number of sources could be used to provide a close estimate of the earnings a market could yield. For example the number and nature of athletic meetings held at the local stadium could specify the expected number of sports fans needing accommodation.

D.      The final stage of market analysis is determining how much of the potential market’s demand will be directed at a specific establishment. A hotel could use past records to estimate its potential custom. For instance if a conference is held each year at a specific time and place the hotel should have a rough idea about the number of potential bookings that are to be expected.

5.      Explain two methods of market research.
A.      Customer surveys are the most common way that businesses employ to get information about their product and improvement or additions they could make. The questions however ought to be very specific and the actual surveys must be conducted in a way that will make the participants feel comfortable and willing to answer truthfully. Sometimes participants give answers they think the examiners wants to hear rather than what they think and therefore the information is tainted.

B.      Another way to research the company’s product is by using mystery guests or special consultants. A mystery guest is someone who ‘tests’ the product the same way a regular guest would without alerting the staff. Then he offers his insights concerning the standards and services that the company is offering. The employer then can make the necessary adjustments and improvements.

6.      Explain how relationship marketing can be used within the hospitality industry.
Relationship marketing is about creating a large number of regular customers by cultivating a relationship with them.

In a hospitality industry the guest can be made to feel ‘special’ in a number of ways. A loyal customer could be made to feel special in a number of ways. A loyal customer could be rewarded with ‘special offers’ such as late – check outs or free upgrades for example.

With the use of computers the establishment can keep records of the guest’s preferences and ensure that he gets what he likes and he is not afraid to ask something special or extra.

The staff itself can play a major part in cultivating the relationship between the guest and the business. Many major hotels have a rule where guests must be addressed by their name and make special offers (example a complimentary wine if it the guest’s birthday) without being asked to.

Finally sometimes the simple feeling that a return customer is somehow more valued and has higher status in comparison to other guests might compel them to become loyal customers of an establishment.

7.      What does SWOT analysis involve?
A SWOT analysis is one of the preparatory stages of market planning. The acronyms means:

S for the strengths of the business. These are the characteristics that make the product desirable and will ensure that the customers will return and keep the business going.

W stands for the weaknesses of the business. These are the things the company needs to improve or change in order to attract more custom and surpass the competition.

O stands for the opportunities for the business that may arise from careful market analysis and taking advantage of situations whenever that is possible.

T stands for potential threats to the business that can be evaluated from the environmental scanning of the market and they involve a change of circumstances such as the building of a new competitive establishment in the area, the move of a major source of travellers (ex, a conference might be held in a city different from the one that was usually held) etc.

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