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Contemporary Issues In The Hotel Industry: Marketing Add in library

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Question:

Describe about the Contemporary Issues in the Hotel Industry?
 
 

Answer:

Branding strategy has become an essential part of all the industries and the business organizations believe that it is the brand which makes and withstands the value for a longer period of time. Branding is one of the most important aspects of any business large or small and it is the effective brand strategy which gives a major edge in the competitive markets.  In this article we will find ten assumptions in the hotel industry which might give a boost or a major rise for an extended period to the brand.

Assumption – 1

Brand management plays a major role in creating value to the hotel business

It has been a disputed argument that a brand can create a major value to the hotel business and that branding creates a guest loyalty in influencing top and bottom line revenues and the over - all asset values in the industry. The effect of the brand on the customer satisfaction seems to also have a major effect on the brand’s franchising strategy.

Challenge in the Assumption – Lack of branding might result in a loss of reputation for the Hotel.  This aspect is true for almost for most of the hotels as branding is a part of the marketing strategy.

Evidence of the assumption: Since 1980 there have been brands like Quality International which have been renamed and have developed multiple segments within the industry in order to make their presence felt in the market and to expand their brand name (O’ Neill & Mattila, 2006).

Agree or Disagree with Assumption with evidence : This seems to be true to some extent however only when the brand starts penetrating itself into multiple segments as it is their presence in creating a variety of products or providing wide range of services which makes the people get connected to the brand as and however they start utilizing their products.

Is it sound or not with evidence - It is sound with the evidence as it has been mentioned that 1980 there have been brands like Quality International which have been renamed and have developed multiple segments within the industry.

Is it logical or not with the evidence – It is logical with the facts which have been provided as there is an adequate amount of facts which have been proven based on this assumption.

Assumption – 2

From a corporate strategy view point it has been assumed that well – managed hotel brands tend to gain an increasing market share

Brand strategy is all about how the brand approaches different segments, how it plans for its establishment of the brand and how it plans to distribute its products amongst the distributors. Communication is an integral part of establishing a brand value where the brand communicates verbally and visually in the market to withstand the competition from other rising or already established brands

Challenge in the Assumption – There will be an immense stress on the brands to maintain the market value as their financial gain is directly dependent on it

Evidence of the assumption – Hotel Marriott International has always tried to increase its brand value by making their presence feel in the market by creating a strong strategy for their brand where they include their brand name in almost all the segments in which they enter. Most of the companies also use similar logos or they tend to include the same logo on the brand irrespective of the nature of business.

Agree or Disagree with Assumption with evidence - This assumption is also true as it has been proven by most other brands like choice international as by getting acquired by other established brands they are able to get a major boost for their brand name typically by just including the parent company’s name (O’ Neill & Mattila, 2006). It is sound and logical with the evidence.

Is it sound or not with evidence - It is sound with the evidence as it has been mentioned that there are many hotels in the brand which always tried to increase its brand value by making their presence feel in the market by creating a strong strategy for their brand where they include their brand name in almost all the segments

Is it logical or not with the evidence – Presence in the market and further market penetration are based on this evidence and this makes it a viable logical evidence for this assumption.

 

Assumption - 3

The remarkable growth of the hotel branding rests on the concept that a brand provides a greater value to the guest and hotel companies in large parts as their branding fosters a brand loyalty (O’Neill and Xiao 2006).

Even though different hotel brands take different approaches to establish their brand in the market the bottom line for all the businesses to foster their brand loyalty by reaching maximum amount of people and by tapping the exact market potential.

Challenge in the Assumption – The expectation gets set on the assumption fact that the hotel has to maintain the brand

Evidence of the assumption – The hotel brands take to different marketing strategies in this aspect as fostering a brand is a closer move for the customer segment as the brand tends to conduct a thorough market research to know the demands which prevail in the market and they tend to service in the same way.

Agree or Disagree with Assumption with evidence – Loyalty is true to have been proven in almost all the business segments and not only in the hotel industry. Irrespective of the fact whether the brand has penetrated into different segments or they have opened various franchises for establishing and expanding their brand loyalty plays and occupies the highest positon in deciding the future of a company or a brand. As once the brand gets established or once the brand gets its boost by penetration it is sure to be there for longer period of years provided it has won a lot of customers. It is sound and logical with the evidence.

Is it a sound or not with the evidence - It is sound with the evidence as it has been mentioned that the industry has been trying different options like hotel brands take to different marketing strategies in this aspect as fostering a brand is a closer move for the customer segment as the brand tends to conduct a thorough market research to know the demands which prevail in the market and they tend to service in the same way.

Is it logical or not with evidence - It is logical with the evidence as it the marketing strategies which have been tried so far by most of the hotel brands have been given in the evidence of the assumption.

Assumption – 4

Corporate colors and logos of brands matter to establish the brands in the market

As the brand represents a company itself its presentation should be consistent amongst all its group of companies. A parent company is the stem through which the sister companies root out and they carry the image of the parent company to carry forward their legacy for years to come.

Challenge in the Assumption – Freshness is the aspect which plays a major role in this factor as there is constant vigilance against it.

Evidence of assumption – There are evidences where the well established brands have changed their nature of business, evidences where they have shifted their major line which they have started since legacy however they have maintained their logo, colors and images as a standard practice all across their business organizations as it creates a major impact on the people and in the market where it is the logo sometimes that creates an impression and it is the logo which strikes the audience about the brand. (Vaid 2003).

Agree or Disagree with Assumption with evidence -  Logos matter in creating an impact in the industry for sure however there is a slight dependency on the customer loyalty and the brand image given in the assumptions above which create a major value in the market. Logos, colours and images which the brand sets in for it should be teamed with a proper branding strategy and the right approach to selling their products as it is the value which matters the most for a long standing image in the market (Gilmore, J. H., and J. Pine. 2002). It is not as sound and logical with the evidence as this factor might not always have a greater impact.

Is it sound or not with the evidence - It is sound with the evidence as it has been mentioned that in the hotel industry there are well established brands have changed their nature of business, evidences where they have shifted their major line which they have started since legacy however they have maintained their logo, colors and images as a standard practice all across their business organizations as it creates a major impact on the people and in the market where it is the logo sometimes that creates an impression and it is the logo which strikes the audience about the brand.

Is it logical or not with evidence - It is sound with the evidence as the impressions made and the connectivity to the customer in various aspects are critical for the hotels to get established.

 

Assumption – 5

A Hotel brand is represented by their relationship which they maintain with their guests

Branding as it is forms an integral part of all the business segments as mentioned above however the major aspect which plays a major role here is the relationship which it maintains with its guests or the customers as they are a part of the hospitality industry.

Challenge in the Assumption – New innovations are to be framed at all times and good knowledge of market competitors should be maintained.

Evidence of the assumption – Consumers get to know a brand or they try a new brand just  by chance and they get to establish a long standing connection to the brand because of the its value it has created, because of its services it has provided and the branding image it carries. The reason could be any of all the three factors given above. The relationship or the first experience which the hotel brand provides its customers for the first time creates and establishes a strong relationship as the experience gets cemented in the minds of the people for a long amount of time (Oh, H. 1999).

The same has been true with the hotel brands Waldorf – Astoria as they believe in giving memorable experiences to their guests than just providing services to their people. These pleasant experiences which the people can relate to create a greater ground to the people for establishing a long standing connection with the brand and this also paves way to getting the people buy all the  services of that brand or for that matter get the customers stick to the same brand even when they launch new product lines.

Agree or Disagree with Assumption with evidence -It is true that trust paves way to all the brands in the market and that trust plays a major role roping in a lot of customers to their brand value.  It is sound and logical with the evidence.

Is it sound or not with the evidence - It is sound with the evidence as it has been mentioned that The relationship or the first experience which the hotel brand provides its customers for the first time creates and establishes a strong relationship as the experience gets cemented in the minds of the people for a long amount of time

Is it logical or not with the evidence - It is sound with the evidence as the impressions made and the relationships with the customer in various aspects are critical for the hotels to get established

Assumption – 6

Positive branding effect occurs only in the middle chain scale industries and in the lower segment industries and they don’t occur in the upper scale segment business organizations.

Branding is always to do with a positive branding or an image setting for a business or a product. Branding is something to do with creating an image for the products a particular brand sells or the types of services they provide (Ryan, Lin, 2014).

Challenge in the Assumption – The fact of positive branding has to be shown that it affects all the hotels and not only the factors mentioned above.

Evidence of the assumption – The Brand affiliation affects the hotel’s brand value. Branding is used as an important quality standard whereas what it actually is in the real time industry standards and the market scenarios is totally different. It is a well - known fact that consumers are always willing to pay any price for the brand they trust and to derive the consumer satisfaction aspect from it (Keller, K. L. 1993).  The brand affiliations like the brand name, brand logo, colors and other attributes associated with it attribute totally for a value which is 20 to 30 % higher than the actual value of what is expected. It is also a known fact that the well-established and renowned brands prevent the other Competitors to enter the competition (Dev Morgan & Shoemaker, 1995).

Agree or Disagree with Assumption with evidence  - This might be 50% true in this aspect as the quality and type of marketing also would have to be concerned in this context for a brand affiliation to be valued. It is sound and logical with the evidence.

Is it sound or not with the evidence - It is sound with the evidence as it has been mentioned that The brand affiliations like the brand name, brand logo, colors and other attributes associated with it attribute totally for a value which is 20 to 30 % higher than the actual value of what is expected.

Is it logical or not with the evidence - It is logical with the evidence the brand affiliations contribute a lot to the business.

 

Assumption – 7

There is a strong relationship between hotel brands and guest satisfaction

Most of the hot brands and in fact the business organizations depend on the satisfaction of the customers for promoting their business.  They attribute the real growth in this sector is seen with the operational success (O’Neill and Mattila 2004).  

Challenge in the Assumption – Hotel brands and guest satisfaction become directly dependent on each other and this factor creates a continuous pressure on the brand to be watchful of their changing needs of the customers.

Evidence of assumption - Previously when business organizations first came into picture they had a need to establish their business, find customers, deliver service and create value. In those days the business organizations were in proportion with the no. of population which existed in a particular region. In these days when the population has outgrown the no. of business organizations it made way to more and more no. of business ideas to evolve and help the customers by knowing what their actual needs are and then developing products which could suit their needs (Jiang, W., C. Dev, and V. Rao. 2002).

Agree or Disagree with Assumption with evidence -  This is 100% true in the sense that with the growing population numbers there have been many innovative ideas in terms of internet business promotions, creation of small advertisements, promoting business through set up of small size campaigns and by even promoting online sales for a wide variety of products in business organizations which belong to varied nature (H. Houdré, 2008). It is sound and logical with the evidence as this has a greater impact with the impression the hoteliers can create.

Is it sound or not with the evidence - It is sound with the evidence as it has been mentioned that business ideas evolve and help the customers by knowing what their actual needs are and then developing products which could suit their needs

Is it logical or not with the evidence - It is sound with the evidence as the impressions made and the relationships with the customer in various aspects are critical for the hotels to get established

Assumption – 8

Hotel Brand extension plays an important role in promoting the growth of the industry

When the business organizations started their business in the initial stages of multi chain business they did not have something called as promoting the business through marketing channels however the hotel industry has embraced the new culture of marketing in the 1980 (Lane and Jacobson 1995).

Challenge in the Assumption – With the newer  brands which the hotels set up the older ones should be at the same momentum and they should not lose any of their brand value.

Evidence of assumption – It has been proven with the well established brands like Hilton, Hyatt,  InterContinental, Marriott and Wyndham where they have all grown into a multi chain brands over a period of 20 – 25 years. Hotel industry which is a part of the hospitality industry is very close to the people as they have the options of direct choices in terms of opting for various choices like type of stay, type of room, purpose of travel, lodging choices and the type of location to which where they would want to stay close (Kim 2008).

Agree or Disagree with Assumption with evidence -  A competitive environment has proven that guest satisfaction plays a major role in promoting the hotel brand extension (Oh, 1999).  The brand extension of any product or a business needs a marketing strategy to be implemented and this can be done through word of mouth behavior (Gunderson, Heide, and Olsson 1996). It is sound and logical with the evidence.

Is it sound or not with the evidence - It is sound with the evidence as it has been mentioned that Hotel industry which is a part of the hospitality industry is very close to the people

Is it logical or not with the evidence - It is sound with the evidence as the good will they make helps in creating a brand value

 

Assumption – 9

Multi brand strategies have disadvantages associated with them relative to the advantages associated with them

Branding provides a value and it’s adds a different flavor to the working system of any business.  Branding happens in the form of consideration sets where consumers buy a lot of products even without a complete knowledge of the entire product they are going to buy as they know that it is the brand which they are relying on than the actual product (Cravens, D. and Piercy, N. 2012).

Challenge in the Assumption – The brand value is something which creates the issue as the competitors might pose a greater competition with the type of services they offer.

Evidence of assumption – This is true in most cases with electronic gadgets, clothes line and children’s toys. The maximum amount of population is anyway the children where their daily needs form an important aspect of their wish to buy several good of their choice and many a times lack of time and proper market knowledge of the new companies and brands which evolve the consumers tend to buy the same brand on a repetitive basis.

Agree or Disagree with Assumption with evidence - As given above about the products belonging to electronics, clothes line and various goods under the toys category simply go by the electronics brand value which the people trust the most. For instance Samsung and Nokia are the most trusted brands in terms of mobile appliances and LG and Morphy Richards are the brands which are most trusted among the home appliances (Jing, de Ruyter, and Wetzels 2002).

Is it sound or not with the evidence - It is sound with the evidence as it has been mentioned that brands which evolve new models help the consumers tend to buy the same brand on a repetitive basis.

Is it logical or not with the evidence - It is sound with the better products they make helps them as they get a good which in turn will help in creating a brand value

Assumption – 10

There is a strong relationship between hotel branding and franchising

Franchising comes with a special set of consideration sets for branding.  When the owner of the brand is not a property operator there might be issues in terms of consumer perceptions and marketing operations of the products of the brand (Prasad and Dev 2000).

Challenge in the Assumption – Franchising has to be given to chosen sectors and brands as they should be able to maintain the brand value.

Evidence of assumption - Franchises are business options provided for the companies to establish their brand in other countries in order to grow their business and establish themselves with a view to pursue their brand and learn more about the customer choices in different locations. As the franchises are not the business owners the ownership responsibility of the brand does not lie with them and there - by there are various chances of the brand name to perish slowly with the misconceptions or any service deliverables which might fail to happen according the rules of the parent company. This proves that there is a strong need for the employees of the franchise company to own the responsibility of setting the actual brand image of the company and delivering according to the services as per the laid regulations of the parent company.

Agree or Disagree with Assumption with evidence -

The parent companies who give their brand for franchises prefer not take major risks as they don’t approve the higher risk activities in the management of the franchise companies for the fear of tarnishing their and not able to recoup their tarnished image. It is always better to have a fixed no. of brand extensions so that there would be an amount of control which could be exercised on the franchises. It is sound and logical with the evidence.

Is it sound or not with the evidence - It is sound with the evidence as it has been mentioned that there is a strong need for the employees of the franchise company to own the responsibility of setting the actual brand image of the company and delivering according to the services as per the laid regulations of the parent company.

Is it logical or not with the evidence - It is sound the hotel brand tends to invite more franchising opportunities in the market.

Explanation of the Interests Served by Assertions

This article has been justified with all its assumptions and with the detailed facts which havebeen provided. This article provides a great insight into the detailed aspects in the hotel industry. They will get to know the role of the brand and the strategy which could be used in successful operation and financial performance of the organization.

Implications of the Conclusion

All the positive and negative assumptions in the hotel industry which are probable have been submitted with all the possible levels of acceptance and rigidity which could promote and give an opportunity for the betterment of the business in the sector. With the solutions provided it can be further tried whether we can analyze them any better and put them to use.

Alternative Conclusion

Alternative conclusion can be analyzed from a method where these strategies are put to use and if they don’t work.  There can’t be alternatives even without testing the options decided. In a way these strategies can be used for promoting the brand equity and its market presence.

 

References

Oh, H. 1999. Service quality, customer satisfaction, and customer value: A holistic perspective. International Journal of Hospitality Management 18:67-82.

Dev, C., K. Z. Zhou, J. Brown, and S. Agarwal. 2009.Customer orientation or competitor orientation: Which marketing strategy has a higher payoff for hotel brands? Cornell Hospitality Quarterly 50:19-28.

Gilmore, J. H., and J. Pine. 2002. Differentiating hospitality operations via experiences. Cornell Hotel and Restaurant Administration Quarterly 43 (3): 87-96.

Mattila, A. S. 1999. Consumers’ value judgments. Cornell Hotel and Restaurant Administration Quarterly 40 (1): 40-46.

O’Neill, J. W., and A. S. Mattila. 2004. Hotel branding strategy: Its relationship to guest satisfaction and room revenue. Journal of Hospitality & Tourism Research 28 (2): 156-65.

Prasad, K., and C. Dev. 2000. Measuring hotel brand equity: A customer-centric framework for assessing performance. Cornell Hotel and Restaurant Administration

Quarterly 41 (3): 22–31.

Jing, L., K. de Ruyter, and M. Wetzels. 2008. Consumer responses to vertical service line extensions. Journal of Retailing 84 (3): 268-80.

Vaid, H. 2003. Branding: Brand strategy, design, and implementation of corporate and product identity. New York: Watson-Guptill.

Kim, W. G. 2008. Branding, brand equity and brand extensions. In Handbook of hospitality marketing management, ed. H. Oh and A. Pizam, 87-118. New York: Elsevier.

Jiang, W., C. Dev, and V. Rao. 2002. Brand extension and customer loyalty: Evidence from the lodging industry. Cornell Hotel and Restaurant Administration

Quarterly 43 (4): 5–16.

Kim, W. G., and H. B. Kim. 2004. Measuring customer- based restaurant brand equity: Investigating the relationship between brand equity and firms’ performance.

Cornell Hotel and Restaurant Administration Quarterly 45 (2): 115-31

Gundersen, M., M. Heide, and U. Olsson. 1996. Hotel guest satisfaction among business travelers. Cornell Hotel and Restaurant Administration Quarterly 37 (2): 72-81.

Simon, C., and M. Sullivan. 1993. The measurement and determinants of brand equity: A financial approach. Marketing Science 12:28-52.

Vaid, H. 2003. Branding: Brand strategy, design, and implementation of corporate and product identity. New York: Watson-Guptill.

Keller, K. L. 1993. Conceptualizing, measuring, and managing customer-based brand equity. Journal of Marketing 57 (1): 1-22.

Ryan, Lin, 2014, Staying Power: Revenue grows as demand from international travellers and businesses rises

Hooley, G., Piercy, N., Nicoulaud, B. 2012, Marketing Strategy and Competitive Positioning, 5th Ed., Prentice Hall.

Cravens, D. and Piercy, N. 2012, Strategic Marketing, 10th Ed., McGraw Hill.

Mullins J., Walker O., Boyd H., and Larréché J.-C., 2006 Marketing Management: A Strategic Decision-Making

B. Barney and A. M. Arikan, "The Resource-Based View: Origins and Implications." In M. A. Hitt, R. E. Freeman, and J. S. Harrison, eds. The Blackwell Handbook of Strategic Management (Oxford, UK: Blackwell, 2001), 124-188.

Houdré, "Sustainable Hospitality: Sustainable Development in the Hotel Industry," Cornell Hospitality Industry Perspective 2 (July 2008), Cornell Center for Hospitality Research.

Oh, H. 1999. Service quality, customer satisfaction, and customer value: A holistic perspective. International Journal of Hospitality Management 18:67-82.

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