Managing Global Hospitality Essay Example for Free

Managing Global Hospitality Essay The importance of developing services for a company that deals with hospitality industry is obvious. This is because competition in the hospitality industry is so intense that only providers that can attract customers at appropriate ways can win the market. The situation drives corporations to place lots of advertising to influence customers. Television, urban areas, shopping centers, and corners of the streets, for example, share similar characteristics that they are full of advertising and promotion at various forms such as billboards, running text, large screens and many others. In marketing study, promotion becomes one factor of marketing strategy that influences salability of a product in addition to product, place, and pricing. The mixture of the four components, which often refer to marketing mix, creates opportunity for marketers to design, create, promote, and sell products creatively. In order to describe how the services marketing strategies are applied in a real case, we use the profile of Tourism Hotels and Leisure Ltd, an Australian-based service company, and further analyze this company by using the M-S model. Concerning the issue, this paper has two objectives as following: ? Evaluating the structure, environment and issues that face international hospitality organizations (Tourism Hotels and Leisure Ltd) ? Using the non-participant observation method, this paper is to analyze product offering of service products by using Multi-Segment (M-S) model on Tourism Hotels and Leisure Ltd Tourism, Hotels and Leisure Limited is a global accommodation management company based in Sydney and listed on the Australian Stock Exchange since 1985. There are several key business asset of the company, which are: proprietary hotel operating systems, intellectual properties, trade marks and management franchise agreements (‘Golden Tulip Brands’, 2005). Currently, as the company keeps committing to two keys of corporate performances: risk diversification and growth strategy, the company faces several challenges from worldwide tourism and hotel chains companies. Risk Diversification of Tourism Hotels and Leisure Ltd Currently, the company owned five hotel brands in Asia pacific, which are: Grand Pacific Suites resorts, Pacific International Suites, Apartments Resorts; Golden tulip Hotels, Inns Resorts, Plaza Hotels and Pensione Hotels. The company, together with its affiliates, has more that 435 hotels, in 370 locations across 43 countries in five continents. In Asia Pacific alone the company owned 53 hotels providing up to 4,200 rooms. In Australia, the company recently purchased the Plaza hotels consist of a group of 30 hotels in mid market category (‘THL’, 2005). In hospitality industry, the major risk is to lose customers and cause low occupancy rate, therefore, in performing risk diversification, Tourism Hotels and Leisure Ltd has conducted a series of business expansion and diversification. For example, the company has just added five new hotels coming in Australasia with the addition of Golden Tulip Airport Hotel, Melbourne (Tourism, Hotels Leisure Limited (THL), 2005). In addition, the company also develops new retention program by introducing Connections, which composes of frequent flyer and other loyalty programs. The programs are valid at 15 international airlines to all Pacific International properties (Tourism, Hotels Leisure Limited (THL), 2005). In order to achieve the objective to perform risk diversification; at least there are two actions that Tourism, Hotels Leisure Limited (THL) can perform as following: ? THL should develop and maintain quality services. For instance, THL conducts a series of workshops that train the company’s managements and employees concerning THL programs and service objectives. This objective to carry out these workshops is to monitor and then maintain the quality of service in all THL facility in order to fulfill customers’ needs ? Use quality assurance tools like Balanced Score Card in order to enable THL in monitoring the company’s financial and operational performance and check whether they still comply with improved customer’s satisfaction. Growth Strategy of Tourism Hotels and Leisure Ltd The competition in hospitality industry is fierce. The situation encourages corporations in the industry to expand into international market. According to a study, the development in hospitality industry is caused by two factors: MA activities and Market Segmentation. The later, market segmentation, is popular in the industry since it enables a hotel group to expand and strengthen their presence without competing between their own brands in a certain markets. Marriott, Sheraton, Accor, Holiday Inn are examples of hotel groups that maintain vast brands. According to Philip Kotler (2000) in his book Marketing Management, marketing in 21st century shows attractive ways since corporations are encouraged to develop new marketing approaches in order to sustain their growth. Instead of spending millions of dollars on costly market research, corporations simply conduct and improve basic marketing approaches such as establishment of manufacturing facilities near customers’ location, providing comprehensive solutions base on customers’ needs. Concerning the approach, Kotler (2000) says that marketers also develop loyalty programs including building customers’ club, create attractive public relation programs, continuously using customers’ feedback to improve products or services. Concerning services, Wilson (1972), suggests that marketers face huge challenge when marketing a service or intangible product. This is because the more intangible a service is, the greater the difference in the marketing characteristics of the service is. Based on the definition, marketers must pay attention to developing marketing strategies that target customers’ hearts. One recent concept regarding the development of marketing strategy is the service-good analysis . The concept aims at speed up the process of product/service definition in order to quickly produce the proper marketing strategy (Langford, 1997). According to Kurtz and Clow (1997), there are sever al unique characteristics of services, which demand different marketing concerns including intangibility, inseparability, and variability. The intangible nature of the service requires companies to make the service mo/nm, re tangible by stressing tangible cues within promotional efforts. Company image, recommendations and word of mouth are becoming important within marketing services strategy. Moreover, service industry also contains inseparable character, where demand is more sensitive to supply. Under such circumstances, firms must be more carefully match services with existing demands to ensure satisfaction. Concerning the service industry, there is hospitality industry that covers many services including the provision of food and beverages, lodging, transportation and travel, and hotel and resorts. Figure 1 shows Multi-Segment model, which is known as M-S Model. There are in general four quadrants in the model, each consists of four elements: entities (E), Marketer action (M), Buyer Action (B), and Interaction (I). Figure 1: Multi-Segment Model (M-S Model) Source: McColl-Kennedy, J. 2003, Service Marketing: a Managerial Approach, John Wiley and Sons, Australia ? Product Segment The operation of a service company differs from products resulted from a series of production activities. There are several benefits or the tangible product industry that cannot be obtained in the service industry. For example, the benefits of industrialization cannot be generalized to the service industry. Services cannot be produced in advance and stored for future use. However, the concept of marketing services provides a different perspective of that consist of three operational positions, which are cost efficiency, customization and service quality. The process of producing the services also differs from creating a product. Each service is differentiated by complexity of the process and the variability of each step of the process. There are several strategies related to the operations of a service company, some of them are position mapping and blueprinting A service company can benefit from creating position mapping and blueprinting. Both analysis tools will help the company to define its competitors, the intensity of the competition and the direction it heads for (Kurtz and Clow, 1997). To better describe the product segment of Tourism Hotels and Leisure Ltd, below is tabular form of buyer’s perspective on products quadrants.