The Australian hotel is one of the most famous heritage based hotel that provides various kinds of hospitality services for the customers. The prices of the rooms and other facilities of this hotel is quite affordable for the tourists from different parts of the world. Australia within few years of its development has tremendously grown itself in the field of tourism industry. For every industry existing in the market requires effective advertising and marketing of their services. Therefore, the term hospitality is taken into consideration by the marketers to analyse the prosperity of a particular industry. An effective marketing strategy attracts more number of customers for a service with the assurance that they are buying the reliable product/service for them. Marketers ensure that the service quality is fine and would be most liked by the customer (Alonso-Almeida, Rodríguez-Antón & Rubio-Andrada, 2012).
Hospitality represents loyalty of the services to their customers that they can purchase their service with no loss. The services will be provided with some benefits like discounts and offers which attracts more customers. Most of the hotels in Australia apply the same strategy to manage economic value of their business. They believe in customer satisfaction and so focus on bringing value to the services that they offer.
The executives of marketing and the managers continuously make changes for the previously developed marketing strategies. They utilise most of their time in discovering new artifacts about their business. Managers keep on trying to make effective decisions for the hotel so that they can achieve the targeted goals (Bouranta, et. al., 2017).
One thing that is most important within developing marketing strategies is the team collaboration. If the binding between all the team members is good then it becomes easier for the managers to discuss upon the issues that are raised by the team members and to find relevant mitigation strategies for them (Chen & Hu, 2010).
Moving onto providing best services to the customers, the reminder should be considered by the marketing executives that they are focused on the tangible and intangible products that are supplied in the market. Customers not only see the price of the hotel rooms but also the facilities which are provided to them. Customer satisfaction is very important in terms of hospitality industry like hotels because recognition from customers is necessary for the hotel to gain positive reviews about that particular hotel.
An effective marketing plan makes from a good marketing strategy. Marketers have to make research about the current trends and what is most liked by the customers nowadays. Communications is one of the best ways by which marketers can know about the views of customers. Meetings or surveys can be held making customers as a participant to get reviews about a hotel’s policy (Gazzoli, Hancer & Park, 2010).
Smart marketers do not directly launch the product in the market whilst they try to keep it simple. They take the reviews from customers modify it and test it before launching it into the market. It is because taking any kind of risk can be a loss to the company as development of a strategy requires a lot of hard work and strength to overcome challenges that are faced by the hospitality industry.
1.2 Assess the impact of marketing environment on the industry
Marketing environment is analysed according to the micro and macro environmental factors. These factors are associated with the trending technologies of the market and the customer demands. However, marketers are more aware about all these factors to develop effective marketing strategies. In order to sell a particular product or service, micro and macro environmental factors are very important to be considered. SWOT analysis, porter’s five force model is used to determine the strengths and opportunities. Risks that are identified by the marketers are the increasing demand of customers (Goel, Tenon & Groove LLC, 2012). Most of the customers do not spend their holidays in travelling therefore sometimes it becomes a drawback for the hotel industry. Some of the factors that influence hotel industry are as follows-
Political factors: The organizations are limited to the Government policies majorly the hotel industry as there are certain rules that strictly needs to be followed as per the instructions. When the rules are not obeyed then there is a penalty that is made by the Government Authorities to the Hotel industry. Hotel industry has setup its place in the market with the evolution of tourism industry. People coming from different parts of the world need to stay in a comfortable place to enjoy their vacations. But the policy that has been made by the Government is becoming a major factor in the success of the Hotel industry. Although, there has been certain strategies that are made by the marketers but still there are many drawbacks of the political factors that are changing frequently with the change in Government Parties in the country (Ha & Jang, 2010).
Regulatory Environment: This environment is mostly used by the organizations to protect them from their rivalries. This prevents the companies in making wrong transactions. There are many frauds that are going on in the hotel industry. Customers are not receiving proper facilities as per described in the company’s website. In such an environment hotel industry is able to promote their services using specific advertising and marketing methods. Investments for these methods are counted as important costs for providing better services to the customers. Hotels have to pay taxes to the Government on services they provide to the customers (He, Li & Keung Lai, 2011).
Economic Factors: price inflation, exchange rates, capita of domestic products that are used by the hotels that decides its economic value. These were some of the aspects that are affects the economic growth of hotel industry. Recessions that are received from the customers contributes a lot in increasing the economic value of the company. Each purchase that is made by the customer goes into the contribution of economic stability of the company (Hyun, 2010).
Social Factors: Customer reach is one of the aspects that are considered by the marketers when selling a particular service to the customer. Customers are more concerned about the luxury that they expect from the hotels and not just the price or ratings of the hotel. Marketing team has to find a new and innovative way by which they can reach to more number of customers.
Technological Factors: as the technology is getting more and more advance nowadays, demands of customers are also increasing. It becomes easier for the customers to choose their desired hotels according to their preferences. This saves their lot of time and is also very less time consuming (Kara, et. al., 2013).
1.3 Evaluate the relevance of consumer markets in the industry
Based on the preferences of the products or services, most of the customers purchase products for their own use rather than resealing into the market which is known as consumer market; in which customer have their choice to either sell their liked products or to resale them. In this category, there are some of the characteristics that consumer markets have like demographic characteristics, behavioristics, geographic and many more. These all describes about the types of consumer markets that exists in the field of hotel industry. Consumer markets provide all the required liabilities to the customers as they need them. Beginning from lower to the higher prices of products everything is available under one roof. Customers are attracted in a marketplace where they could shop anything they need at one stop (Karatepe, 2010).
Consumer markets consist of individuals or a group of individuals that focus on exchanging the products with different companies considering a specific product value. Due to the introduction of consumer markets, hotel industry has also become one of the competitive industries among other fields like the airline industry. Companies are struggling hard to achieve competitive goals due to evolution of consumer markets. These are evolved to the most powerful as they deal directly with the other consumers of the market providing best of their services. There are some corporate individuals also who contribute to the consumer markets. Corporate use their effective planning and marketing strategies to attract customers for their business (Kassim & Asiah Abdullah, 2010).
Divided to the primary categories of retail based products, beverages, customer satisfaction and foods that are supplied to the consumers who need this services. The relevance of consumer markets in hospitality industry is that it provides desired products or services to the customers approaching the consumer market. It creates the long-term relationships with the people who are purchasing the product. Strong connections with the customers help consumer markets to grow their business to different parts of the country. As discussed above about the customer satisfaction, consumer markets are relevant to the people fulfilling all the necessary requirements of the customers (Keller, Parameswaran & Jacob, 2011). These markets provide customers not only with what they expect but what they desire for. Consumer markets create a well-distinct structure for the selling of products or services. Consumer markets follow market culture that puts value to the requirements made by the consumer. Next is the value chain analysis which is most common method adopted by every company in the hospitality industry. It can be concluded from the detailed description about consumer market that they provide good consumer services and have achieved significant competitive advantage in the market as compared with the other companies in hospitality industry (Kim, O’Neill & Cho, 2010).
1.4 Discuss the rationale for developing different market segments
Market segmentation means to divide the product or services according to the demands received from the customers. The division is done on the basis of the preferences of the customer behaviour for a product or service, and the promotions made to market those services. Market segments enable the managers of a hotel to realise the effectiveness of their developed marketing strategy with those applied by the competitors (Kwok, et. al., 2017). Consumer groups in the market are quite difficult to chase, therefore, managers have to study the trends that are going on in the market. However, there are few reasons as to why market segments are important-
- Customer Satisfaction: when the area of interest for a customer is distributed it becomes easier for the company managers to evaluate their requirements. Preferences of a customer can be easily judged and thereby marketing strategies can be developed. This helps in customising the solutions that are provided to satisfy the consumer needs. It is because consumers never have the same demands (Law, Qi & Buhalis, 2010).
- Communication: depending on the choices of customers, managers of consumer market communicate with them so that the specific needs of a customer can be accomplished. Effective communication is the part of better marketing, therefore, customers has to be handled patiently and carefully considering what they are looking for in the market.
- Opportunity for Growth: consumer markets firstly analyse their targeted goals so that potential customers can be identified. Problems occur in almost all businesses like that of consumer markets which can be resolved by building of appropriate strategies. Segmentation is the best ways to be followed in a business to concentrate specifically on the consumer’s demand. Strategy for decreasing the price of products is beneficial for the success of consumer market (Li, Sanders & Frenkel, 2012).
- Increased Innovation: the segmented departments of a consumer market needs to be managed properly for which innovations are required. Although, operational costs are needed for such technological development, these also help the hospitality industry to keep track about the progress of such segments. Nowadays, consumer likes to have the innovative designs for the products or services they choose from a particular hotel (Liang, 2012).
- High Profits/Market Share: most common issues that the consumer market face is to make profits from the applied operational costs for their business. It is challenging for the companies to acquire the relevant market share against the competitors. Getting market share means that the company has got good reviews and rating from their customers which indirectly creates a competition for other hotels that are already established in the market (Lo, Stalcup & Lee, 2010).
2.1 Assess the importance of components of marketing mix to the industry
Framework of marketing mix is essential for the hospitality industry to understand the customer needs and accordingly provide feasible solutions for the business. Planning for having a successful business growth is necessary and for doing this the customers are required to be offered a high level of assurance regarding the fulfilment of their needs and demands. Hotel industry is continuously making improvements to enhance their business processes and to provide high grade services to their customers (Mantey & Naidoo, 2016). Components of marketing mix need to be studied and maintained by the company managers. Pricing, distribution, communication, presentation and product-service mix are some of the components that are used in hospitality purposes. These components are helpful for a new business start-up say as for opening up a new restaurant. Product-service mix helps the managers to decide what types of products that can be used, list of food and beverages for the customers, room facilities and many more. All the required activities can be scheduled so that the services can be delivered on the given time to the customers vesting the hotel. To make the customers feel comfortable facilities like soft music, well designed furnishing, décor items and other things should be used. Marketing mix in hospitality industry makes it convenient for the managers to think about the best possible solutions for the issues faced by the hotel. Competitor analysis is mandatory when creating plans using marketing mix. Marketers of a hotel recognise the policies that are effective and those which are becoming drawback for their business growth. When the competitor’s strategy is known, half of the work becomes easier to achieve. Marketers can then make effective decisions to launch a service in the market. This helps in managing the costs that are used to develop recognition for the hotel and to manage other expenses of the hotel. Prices of the services need to be decided carefully and it is very crucial thing to do by the managers. Lower cost will decrease the number of profits that the company will achieve and if the prices would be higher than customers will find it difficult to afford. Therefore, marketing mix plays a vital role in managing the product and service related operations for the hotel industry (Markovic & Raspor, 2010).
Importance of marketing mix strategy is an essential element for the organization in terms of enhancing organizational growth and performance in the target market. Marketing mix strategy is mainly used for promotion and advertisement purpose and in relation with this; elements of marketing mix are mainly used for promoting organizational products and services. Marketing mix strategy has mainly four elements i.e. product, price, promotion and place. Marketing mix strategy is also known as four P’s (Mok, Sparks & Kadampully, 2013). With the help of these elements, organization could easily enhance its highlight the key features, USPs, key performance indicators, etc. so that organization could be able to approach its target and potential customers. Promotional campaign becomes strong with marketing mix strategy and on the basis of organizational requirements; appropriate strategies could be adopted for the organization so that appropriate goals and objectives could be attained. Following are components of marketing mix strategy:
- Product: Product is the foremost element of marketing mix strategy and its main focus is on highlighting key features of organizational products and services. In relevance with Australian Hotel, its main services are providing comfort stay, quality food and ambiance so that guest’s experience with the hotel could be enhanced (Nadiri & Tanova, 2010).
- Price:In relevance with developing a distinctive position in the competitive hotel industry, organization will focus on premium pricing strategy. Apart from premium pricing strategy, organization also target middle and upper middle class segment. In relation with this, organization has designed its product offerings in such a manner so that different segments of consumers could be targeted.
- Place:Place of distribution is another critical segment for marketing mix strategy. Australian Hotel is situated in various parts of Australia and in relation with setting organizational performance in the target market; other parts of the Australian market will also be covered in order to reach to the other customer segments (Crick & Spencer, 2011).
- Promotion:In terms of promotion, organization will mainly focus over effective promotional strategies. Combination of traditional and contemporary mediums of promotion will be adopted in the promotional strategy so that the goals and objectives could be attained along with enhancing reachability in the target market.
2.2 Analyse pricing strategies and policies
Hotel industry is a broad concept and various types of services are rendered in hotel industry. Hotel industry is segregated into various parts such as small level hotels which are mainly known as guest houses, middle level hotels which provide average rated services and premium hotels which are mainly known for providing luxurious services. The Australian is one of the premium range hotels and they are famous for providing luxurious services along with a beautiful heritage experience to its guests (Pereira-Moliner, et. al., 2012).
The Australian hotel generally executes its operations on premium pricing strategy so that they could differentiate their image amongst the other players of the market. Pricing strategy plays vital role in terms of enhancing organizational performance and this strategy carries huge weightage. With the help of pricing strategy, organization could easily enhance its performance along with gaining competitive advantage. In terms of hotel industry, prices are fixed on the basis of requirements of guests as well as on the basis of external business environment. Apart from this, competitors, their services and their strategies also plays vital role while setting up the final prices for the services.
The Australian hotel will adopt premium pricing strategy so that they could differentiate themselves from its competitors. Apart from this, premium pricing strategy will also help the organization to develop its unique and effective image in the target market so that desired goals and objectives could be attained. Apart from this, it has been analysed that most of the premium products and services are launched in the market on premium pricing strategies. With the help of premium pricing strategies, organization would be able to target its potential customers. Premium pricing strategy will help the organization to draw a line between its competitors’ services and its own services. In relation with satisfying target audience’ demands and requirements, it is required for the organization to develop its unique image in the target market. Premium pricing strategy will be the most appropriate tool for enhancing organizational performance, for differentiating its image amongst the competitors as well as to attract the target and potential customers.
Premium pricing strategy does not based over the cost of production of the services and products and with the help of premium pricing strategy, organization would be able to develop its separate image amongst the target and potential customers. As per consumer’s perception, products based on premium pricing strategies are more attractive. Mainly, all premium brands such as Apple, Ferrari, Mercedes-Benz, etc. With regards to this, demand for these products is also high in upper class customer segments.
4.4 Evaluate the implementation of the marketing plan
The Australian Hotel is the known for its heritage culture, ambiance and for providing relished experience to its target audience. For attracting the target audience, The Australian Hotel will launch unique service under which rooms will be provided on hourly basis to enhance customer base as well as to attract other segments of customers (Nagle and Müller, 2017). Hourly basis service will be launched mainly for business travellers as they travel for short duration in one city for purpose of meeting with clients, etc. In relation with this, marketing plan will be developed so that the new service launched by organization could be marketed in the target market.
Initially, appropriate expectations will be set from the new service launched in the target market. Apart from this, organization needs to build team so that the plan could be executed appropriately (Vanhove, 2017). Along with this, appropriate resources will be gathered so that plan could be executed in terms of attainment of desired goals and objectives (Raub & Robert, 2010).
Following are main steps for implementing the marketing plan for promoting organizational new service in the target market:
- Communicating the plan to the other people so that appropriate goals and objectives could be attained.
- Right tasks needs to be assigned to the right person
- Timeline needs to be set up so that the tasks could be performed in an appropriate manner and in time
- Regular evaluating measures will be executed so that the success could be measured
- Appropriate resources should be provided to the employees so that innovative and creative ideas could be generated for performing the tasks
- Management should be able to communicate attained outcomes along with celebrating success to build confidence amongst the employees.
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