Impact of advertisement on hotel industry

2010

IMPACT OF ADVERTISEMENT
AND PROMOTION ON
HOSPITALITY SERVICE
PROVIDERS (BUSINESS
HOTEL)
BUSINESS PROJECT REPORT

SUBMITTED TO: Dr. G. RADHAKRISHNA

AMIT KUMAR (09ESHYD003)
IBSHYD
4/29/2010

IMPACT OF ADVERTISEMENT AND PROMOTION ON HOSPITALITY SERVICE
April 29, 2010
PROVIDERS (BUSINESS HOTEL)

BUSINESS PROJECT REPORT 2

April 29, 2010

Acknowledgement

I would like to express my sincere gratitude to my Faculty Guide, Dr. G Radha
Krishna for taking out his precious time and guiding me throughout my Business
Research Project. With the help of his valuable suggestions, guidance and
encouragement, I was able to perform this project work.

I would also like to thank ICFAI Business School for giving me this opportunity
to get this small but relevant exposure to the corporate sector while doing my
Project.

Last, but not the least, I would like to thank my colleagues, who often helped and
gave me support at critical junctures during the making to this project in one way
or another.


April 29, 2010

CONTENTS:

Sl. No. TOPIC Page No.
1 Introduction 5
2 Objective 7
3 Methodology 9
4 Current Trends of Marketing of Hotels 10
4.1 Hotel Website Design 12
4.2 Hotel e-CRM Customer Relationship Management 13
4.3 Mobile Hotel Website & iPhone App 15
4.4 PPC 16
5 Questionnaire 17
6 Interim Findings & Observations of The Survey 20
7 Conclusion 21
8 References 22


April 29, 2010

Introduction:

Many companies are trying to put their arms around the ever-evolving marketing
services dynamics. They seek to unify efforts across geographies and business
units. As it becomes more apparent that marketing excellence needs to be
strengthened, companies are implementing new strategies to continue to push the
evolution of a fully integrated marketing approach.
The advancement of technology (Internet) created new metrics and led to greater
accountability in marketing. Companies could directly interact with a greater
number of their individual, end-user consumers and evaluate marketing strategy in
terms of the number of eyeballs, clicks or footsteps that search marketing
delivered.

Now, most companies realize that it is also critical to a business’ success to gather
information from these interactions to not only measure behavioral change but also
increase profitability.
The basis for any successful marketing strategy is an understanding of the firm’s
target market. The traditional consumer-goods classification system consisting of
convenience, shopping, specialty and unsought goods are one example of a
classifications system that furthers marketers’ understanding of their consumers
(Kotler & Keller, 2006). This system, which is based on how consumers think and
shop for products, allows marketers to develop marketing mixes for new and
present products that satisfy their customers’ want and needs. (Perreault, Cannon &
McCarthy, 2008).

There was a time when companies had secreted away in their annexes marketing
services organizations that essentially acted as a go-between with the creative brain
trusts at "The Advertising Agency." The agency was a one stop shop for just about
everything—especially advertising and media buying. Of course, time changes
everything and so does the Internet.
The rise of the Internet created new metrics and led to greater accountability in
marketing. Companies could directly interact with a greater number of their
individual, end-user consumers and evaluate marketing strategy in terms of the
number of eyeballs, clicks or footsteps that search marketing delivered. Now, most
companies realize that it is also critical to a business’ success to gather information


April 29, 2010

from these interactions to not only measure behavioral change but also increase
profitability.

The majority of companies have traditionally focused solely on their customers.
Now, traditional companies are also collaborating with online giants, such as
Google and Yahoo!, as well as other media and direct marketing agencies to
increase their market share. All of these changes reflect the resurgence of the
consumer as the arbiter of media choices.
Many companies are trying to put their arms around the ever-evolving marketing
services dynamic. They seek to unify efforts across geographies and business units.
As it becomes more apparent that marketing excellence needs to be strengthened,
companies are implementing new strategies to continue to push the evolution of a
fully integrated marketing approach.


April 29, 2010

Objective:

• To analyze the current trend of industry.
• Develop a new framework for studying and evaluating the Cognitive
Dissonance of loyal customers.
• Aligning the shift in the services portfolio for loyal customers, keeping in
mind the demographics, sales channels and the customer trends.

The degree of customer satisfaction is a major factor in the determination of a
brand’s familiarity, which in turn justifies the usage of Promotional tools be it
Advertisement, or Promotions. There are five levels of brand familiarity:

(1) Brand rejection,
(2) Brand no recognition,
(3) Brand recognition,
(4) Brand preference, and
(5) Brand insistence

(Perreault, Cannon & McCarthy, 2008)

Dissatisfied customers will reject the brand. Dissatisfied customer of Extended
Problem Solving type products will experience extreme cognitive dissonance
while the level of cognitive dissonance for Limited Problem Solving products
will be minimal.

Satisfied customers will recognize, prefer, or insist upon the brand. The level of
commitment varies with brand insistence occupying the highest level.

Brand insistence means the customer is truly loyal to the brand or the customer
is brand loyal. Just because a customer regularly buys a product does not mean
they are loyal to the product. Individuals often buy a product out of habit
because they recognize (brand recognition) or prefer (brand preference) the
brand. Depending on the type of decision, customer satisfaction will vary.
Therefore, certain generalizations can be made about brand familiarity,
cognitive dissonance, and brand loyalty.


April 29, 2010

Depending on how the product is viewed by the target market, the customer
satisfaction will vary between extreme dissatisfaction vs. extreme satisfaction.
This in turn determines the degree of cognitive dissonance experienced vs. the
degree of brand loyalty.


April 29, 2010

Methodology:

• Collection of data relevant to the report from internet, developed
Questionnaire and sites of service providers and analyze it.
• Consultation with Managers (Sales & Marketing) of Industry.
• News Releases on consumer behavior.

Post-testing methods actually gives us an idea about the actual performance of
the ad in terms of exposure, perception, communication and sales effect. We
can assess the credibility and comprehension of the ads.
Few of the methods of this type of tests are:

1. Recall tests: In this type of tests the individuals are asked to answer about the
ads entirely on the basis of their memory. It could be aided recall, where they
are given few clues to help them recall and unaided recall, which of course is
based on memory alone.

2. Recognition test: These are also known as readership tests, whereby it is seen
whether they buy the product upon seeing the ads. Importantly, the individual
has to qualify as the reader of that particular issue.

3. Triple association test: Here the respondent is given certain cues wherein he
can relate to a certain brand. For example – “Thanda Matlab”, if the answer is
coca cola, then it is correct. And if the respondent is able to connect the product
with the company then it is a triple association.

4. Sales effect tests: They measure the various stages of buyer awareness,
preference, buying intention and actual purchase in relation to actual advertising
effort.

5. Sales results tests: The additional sales generated by the ads are recorded. It
is difficult however to correlate an increase in sales to advertising alone.


April 29, 2010

Current Trends of Marketing of Hotels:

Hotel Internet
Marketing
Website Hotel Website
Development Design

Hotel
Unconventional
Awareness or
Marketing
CSR activity

Hotel Email
Travel 2.0
Marketing

Hotel
Marketing

Online PR Hotel eCRM

Hotel
Link Building
Advertising

PPC Campaigns Hotel SEO

Translations

Online Market and Business Intelligence tools perform a vertical online market
analysis to identify Life Cycles of Money Keywords. It helps you rank for


April 29, 2010

thousands of keywords in your vertical market with fewer inbound links on the
search engines. It integrates your direct response marketing keywords, with your
vertical market keyword research, and your educational buying keyword life cycles
into a single website system.

While analyzing the design of optimal travel or tourism website, it looks at the
correlation of keywords between;

• Traffic
• Number of clicks
• Number of natural searches or queries
• Pay-per-click statistics
• Cost and profitability
• SEO inbound link and deep link competition
• Co-occurrence of related searches
• Statistically improbable phrases and expert verbiage
• Missed opportunity ranking
• Market value
• Market potential and opportunity.

It provides Hotels with a keyword market map. It will give you a global or top
down vertical view of all the keywords and associative co-occurrences in your
market. It will tell you how your market is moving, where it’s been and how it can
possibly evolve. It can even go to the last drop, and extract every keyword in your
market that has a € value attached to it and the ones that do not.


April 29, 2010

Hotel Website Design

Hotel website development is beyond design and brings the right balance between,
navigation, usability, functionality, structure, visuals and content and normally
offers;

• 100% Freedom
• 100% Flexibility
• Search Engine Optimization
• Functional Design
• Booking Engine Integration
• Web 2.0 Modules

A hotel website includes optimization of content, meta-tags, keywords and site
structure to maximize qualified traffic. With keyword advisory tools at disposal we
can tell what your keywords should be. Hotel website is set-up correctly according
to SEO standards and positioned well in the search engines for a broad range of
keyword searches and market segments.

To reach optimal conversion, design of Optimized Hotel Website is based on heat
map and eye tracking studies by Google, Yahoo and many of the large ecommerce
sites (like Walmart & Virgin Megastores). The Google Golden Triangle theory
tells us exactly where to position each module and component of hotel website to
make it user friendly, easy to navigate and reach a high number of bookings or
conversion. To give hotel complete freedom and flexibility after the hotel web site
has been build of Open Source CMS (content management system) which gives
the hotel complete control over hotel website and allows changing anything.


April 29, 2010

Hotel e-CRM - Customer Relationship Management

We all know that the cost of retaining current clients is much lower than the cost to
acquire new ones. So hotel marketing plan takes this in consideration and target
repeat and one time guests to promote loyalty.

Hotel e-CRM system helps to manage hotel’s customer or guest database. It is
essential to know who stays at your hotel, how often and when for client loyalty
and retention strategies

Based on stay patterns and preferences you are able to send targeted, relevant and
high quality HTML email messages to your guests and leads. This guest profiling
system of email marketing with newsletters and special offers is aimed at an
increased stay frequency, higher ADR and branding.

Distressed Inventory Management

For periods of low demand you can filter on guests who stayed with you during
specific periods and on other criteria to launch a targeted aggressive offer. As you
only make the offer available to a carefully selected segment of your guests, you
will not erode your price positioning or branding, and still be able to push
distressed inventory and offset weak demand.

Intelligent E-mailing

Hotels e-CRM when connected to hotel PMS can now automatically send
"intelligent" emails that are highly personalized and customized for each guest;

• confirmation emails
• pre-arrival emails


April 29, 2010

• thank you emails
• guest satisfaction survey

It is important you send the right message, to the right guest, at the proper time all
to enhance the guest experience.

Reporting
Hotel measures the results of electronic marketing campaign and know exactly
how much revenue was generated by each email and campaign. This enables to
learn more about guests’ preferences and buying habits and get their feedback from
the guest satisfaction survey. Most importantly hotel will be able to quantify this
information in numbers and revenue. It gives hotels the following reports:

• Campaign ROI Report
• Email Performance Report
• Profile Report
• Bounce Report


April 29, 2010

Mobile Hotel Website & iPhone App

SMS marketing & advertising

The Database of Hotel provides mobile phone numbers of your guests as well as
people browsing your website. It enables hotels to scheduled updates on special
offers, packages or event in city. Even local dining in hotel restaurants is targeted
this way.

Provide an interactive mobile brochure of your hotel

Consumers are not longer just using a pc or laptop to access the internet. They look
for travel ideas and to make hotel reservations on their mobile phone, PDA and
Blackberry. With the launch of the iPhone and now the G1 Google Phone this
distribution channel has developed itself more rapidly.

As hotel marketing strategy hotels create a mobile website for iPhone App for the
hotel, SMS confirmations including a map of the hotel location upon booking,
offering a welcome cocktail invitation or tourist map with local attractions upon
check-in through a Bluetooth network.

And this is only the beginning; the possibilities to reach potential clients and
deliver more service to existing guests are infinite...

Send booking confirmation by SMS

Hotel sends a hotel reservation confirmation by SMS (mobile text message).
Hotels even create a hyperlink to a map with the hotel location and directions how


April 29, 2010

to get there, as well as access to hotels mobile website for any other services the
guest might need. A few days before arrival hotel can send a weather update so he
knows what to pack...

Offer interactive guest services

Anyone who has a Bar Code reader on his mobile phone or NFC Ship hotel can
send a city map with local tourist attractions, public transportation information etc.
Or if they need a taxi, it is just a matter of a click o a button, adding the extra
services you can offer to enhance the overall image of hotel or brand with a mobile
or iPhone hotel application.

Following can be the add on apart from the above services:

Interactive Bluetooth service network

Mobile loyalty card

PPC - Pay per Click

Pay-per-Click (PPC) is a form of Search Engine Marketing (SEM). Besides
launching PPC campaigns in search engines hotels can also manage pay per click
or paid search advertising for hotel website in other websites, for example Face
book, Twitter, and various other promotional and social community sites.


April 29, 2010

The following Questionnaire has been formulated to collect the data for analysis of
Post Testing Techniques, and also sales reports of particular Hotel to be used for
analyzing the trend.

Questionnaire for Advertising Effectiveness, which includes Ad
relevance, believability, motivation, descriptive profile plus viewer
life style measures.

(Tick whichever option is applicable)

1. What is the frequency of your visit to a Star Hotel in a month?
a) 1-2 b) 3-4 c) 5 or more

2. We will be watching five advertisements that promote different
brands of Hotels. The titles of the five ads and their order of play are
shown on this card. After you watch the five ads, divide them into
three groups. That is, arrange the ads into those you…
a) Will watch over and over again
b) Might watch several times
c) Never want to watch again

3. Rate your opinion on advertisement of following hotels:
(Rate accordingly 1 – Extremely Motivating, 2 - Motivating, 3 – Can Recall, 4 –
Cant Recall, 5 – Not Motivating)
a) Taj Hotels
b) Oberoi Hotels
c) Hyatt Hotels
d) Marriott Hotels
e) Starwood Hotels
4. What did you like most about this ad? Please be
specific…………………………
5. How well do you remember this advertisement?
a) Don't remember at all
b) Remember company but not product or ad
c) Remember company and product but not ad
d) Remember ad


April 29, 2010

6. How would you rate the Internet Advertisement of the Hotel you
wish to visit?
Oberoi Marriott Starwood
Taj Hotels Hotels Hyatt Hotels Hotels Hotels
a) Excellent a) Excellent a) Excellent a) Excellent a) Excellent
b) Good b) Good b) Good b) Good b) Good
c) Average c)Average c) Average c) Average c) Average
d) Not good d) Not good d) Not good d) Not good d) Not good
e) Bad e) Bad e) Bad e) Bad e) Bad

7. Based on the features advertised these ads…
Strongly Somewhat Neither Somewhat Strongly
Agree Agree Disagree Disagree
The ad message is
understandable.
The advertisement is
believable
The ad's message is
relevant to me.
The benefits described
in the ad are believable
to me.
After viewing this ad, I
would consider availing
the services.
This ad is much better
than other ads for
products in this
product category.

8. Please check the one box that best indicates how descriptive the
statement is of you…
Just likeA lot likeSomewhat Not muchNot at all
me me like me like me like me
It is important to me to
be treated well.
I like the "royal
treatment" in star

April 29, 2010

hotels
I have somewhat old-
fashioned tastes and
habits
I like my clothes to
look up to date
I never have enough
time to visit hotels
I think I am a little bit
wild
I think visiting Star
Hotel is fun
I often buy things on
impulse
I have lots of leisure
time
I expect to have more
money next year

Name:
Gender: M/F
Annual Family Income (Rs.):
1) below 5 lacs
2) 5-10 lacs
3) Above 11 lacs


April 29, 2010

INTERIM FINDINGS & OBSERVATIONS OF THE SURVEY

After consulting few Marketing Managers of hotel it is found that STAS (Short
Term Advertising Strength) contributes a lot for increasing the footfalls in any
hotel which can be exploited if any hotel aligns their long term strategies to it.

The medium-term effect of Advertisement campaign was measured with
reasonable precision using regression analysis, and the findings on these three
parameters I.e.
Rate your opinion on advertisement of following hotels
How well do you remember this advertisement?
How would you rate the Internet Advertisement of the Hotel you wish to visit?

Taj Hotels Advertisement was well remembered and their internet advertisement
was rated good which enhances their capabilities to acquire new customers.

Oberoi Hotels Advertisement was well recalled and remembered increasing their
customer base every day. Also the advertisement got good rating.

Hyatt Hotels Advertisement was not well remembered in comparison to other
hotels, and their internet advertisement too was not appealing to the customers,
which can fail Hyatt to retain and acquire new customers ultimately leading to
cognitive dissonance for Hyatt as per the findings of survey.

Marriott Hotels also has received low rating for their advertisement and people
participating in the survey had found it difficult to recall the ad.

Starwood Hotels have comparatively good advertisement as per the survey
findings and their ad is well remembered and embraced increasing their chances of
acquiring new potential customers.


April 29, 2010

Conclusion:

The Advertiser/Hotel provides the functional benefits. The added values are mainly
created and built gradually, but inexorably by the brand's advertising. It is a fair
generalization that a brand is the joint product of a sound and well-organized hotel
and imaginative advertising.
Although the agency writes the advertising campaigns, these are also the concern
of the advertiser. The advertiser's contribution concentrates on the important
managerial tasks of evaluating the agency's proposals; using their judgment to plan
the "business" of the campaign (especially budget and media); and, most
importantly, measuring the campaign's effects in the marketplace.

Below are some measures to increase the effectiveness of Marketing Campaign of
hotels:

• Pre-test to weed out ineffective advertisements
• Determine advertisement budgets strategically
• Media continuity, not concentration
• Use promotions tactically
• Tactical Coordination of Marketing Communication
• Redefining the Scope of Marketing Communication
• Application of Information Technology
• Financial and Strategic Integration


April 29, 2010

REFERENCES:

www.xotels.com

http://ezinearticles.com/?Hospitality-Industry---Hotels-Business-Current-and-
Future-Trends&id=1958842

http://www.websuccess77.com/seven_ad_tips.html

www.hvsinternational.com

http://businessschoolonline.org/Lesson32AdvertisingEffectiveness.pdf

http://www.viewzone.com/cognitivedissonance.html

http://www.iimb.ernet.in/newsletter/issues/28

Advertising & Promotion – An IMC’s Perspective-(Belch Belch Purani)

Wikipedia

Hotel Annual Report

Effective Promotional Strategies in Services Marketing: A Conceptual Study (G
Radhakrishna-A Suryanarayana-A Srikant)


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