Relevance of market research in Hotel & Hospitality Industry - A snapshot of the various ways in which a research intervention can add value

1. Role of research in hospitality industry
A snapshot of various kinds of
research projects
April 2012

2. Introduction
 This document is a proposal detailing how research can make a difference in the high
end hotels industry
 Presented herewith is an understanding of the industry in India and key research
types that can add value for the hotel/hospitality brand
4/5/2012 2

3. An appreciation of the Indian Hotel industry
Contents
 Salient features
 Key trends

4. Indian Hotel industry – Salient features
 Growing economy that is predicted to smooth-sail upwards in 2012
 Burgeoning demand contrasted against insufficient growth in supply  Leading to Rising
rates and overall boom in the high-end sector
 More than 95% of business accounted by domestic travelers amongst which business
travel accommodation is touching unprecedented levels …
 Business likely to fructify significantly in metros given the strong demand from IT
professionals for accommodation in metros
 A large number of International budget hotel chains are poised to enter Indian soil
 Back home, around 3 times as many hotel projects in the luxury segment have been
approved by the Indian Government & will fructify around 2012
 2012-2012 can be a phase where there can be a tussle of sorts between full-service
players in luxury segment as well as evolving Indian & International budget chains
4/5/2012 4

5. Trends in Indian Hotel industry
 The industry is witnessing a sleuth of Value offerings – Cross breeds that claim the best
of 5-star at prices of 3-4 star
 Increasing disposable income, higher global exposures through media & frequent
international travel have introduced different customer breeds into the fray who come
with expectations of a completely different order
 There is a high experimentation in the high-end hotel industry with the launch of
theme-led properties, as an effort to differentiate
 Recession coupled by introduction of lucrative Enterprise benefits has led to a breed of
demanding enterprise customers
1. Rising quality of service delivery in hospitality – A general trend, thus there are no
apparent long-term ‘differentiators’ in the sector, only sustainable brand value
2. Changing definitions of ‘Luxury’ & ‘Value’ – these 2 attributes are starting to carry
multifarious layers & shades across customer segments
4/5/2012 5

6. Research for Hotel industry
Contents
 Research for Hotel brands
 Research for Restaurants

7. Research for Hotel industry
 Given that the 5-star Hotel industry in India is high on involvement and moderate on
clutter, owning a sustainable brand heritage and delivering compelling positive touch
points to customers at all times becomes an imperative
 There are 2 levels at which consumer touch-points mostly materialize in hotel industry:
Hotel Property Restaurant
experience experience
Touch-points rub-off on Touch-points rub-off on the
overall Hotel brand Restaurant Brand + Hotel
brand associated if any
Research solutions accordingly
need to address the overall Research solutions accordingly
Hotel brand need to address the Restaurant
4/5/2012 7

8. Research for Hotel brands
 There are 3 broad areas where research can make a difference for any Hotel brand:
Brand health & Satisfaction Brand mix
Equity research research research
1. How are we performing as 1. How well-entrenched How well are our
a brand & how are our are we with our guests marketing AND other
individual properties & whether there is need inputs supporting us
performing? for action to further in sustaining our
2. What is the strength of our current loyalty levels? brand health & equity
heritage across different 2. How satisfied are our & other tactical
customer segments & what employees with us & goalposts?
values sustain & drive our why does attrition
overall brand heritage? happen?
4/5/2012 8

9. Research for Restaurants
 There are 3 broad areas where research can make a difference for a Restaurant:
Consumer related Menu related Mix of Touch-points
research research (MoT) research
1. Profiling research 1. Developmental This involves assessment of
2. Consumption research overall satisfaction, delight
attitudes & behavior 2. Menu assessment & diagnostics for all
mapping (CAB) research consumer touch-points at
the restaurant in the
3. Consumer diagnostics 3. Pricing research competitive context
4. Trend analysis wrt 4. Fatigue tracking
F&B genres
4/5/2012 9

10. Research for Hotel brands
Brand health & equity research
Contents
 Scope of research
 Brand Health – Dimensions
 Brand Equity – Dimensions
 Research design

11. Brand health & Equity assessment – Scope
 Premise of a brand health & equity research is that a brand needs to be assessed in line
with any internal/external interventions in order to evolve as a preferred service brand
 Key dimensions that are gauged within this for both own brand & competition are:
Brand health Brand equity
1. Brand Salience 1. Brand imagery
2. Brand Perceptions 1. Brand associations
1. Product (Property) 2. Brand Values
rating 2. Decoding Brand Perceptions
2. Service rating 1. Strengths & Weaknesses
3. Extent of Brand bonding 2. Differentiators
1. Disposition to brand 3. Quality of Brand bonding
2. Entrenchment 1. Personal relevance
3. Imagery (Empathy) & Esteem
2. Differentiation
 How is the brand faring on these indices pre / post any marketing intervention?
 What indices need to particularly addressed to bolster brand performance?
4/5/2012 11

12. Brand health assessment – Dimensions
 This assessment constitutes rating of overall brand and competition on select indices
that together constitute ‘overall brand health’
 It will primarily yield perceptual rating in terms of Salience and Brand perceptions of
the brand & properties as against Competition
 Key assessments that are made to determine overall brand health detailed as follows –
Salience Brand perceptions
Product rating Service rating
 Top of Mind recall Rating of brand, properties  Service availability
 Spontaneous recall & its sub-units as against  Service reliability
expectations on
 Aided recall  Perceived service quality
 Reach / Availability
 Spontaneous Ad  Staff rating on image,
recall  Perceived Quality communication skills,
 Aided Ad recall  Experience responsiveness, expertise,
 Price courtesy & empathy
4/5/2012 12

13. Brand health assessment – Dimensions (Contd.)
 Brand bonding will be assessed through following measures detailed below –
Disposition Loyalty Imagery
Overall disposition towards Extent of loyalty amongst own Strength of association of
the brand vs competition wrt: vs competition guests wrt – brand with desired imagery
 % Adorers  % Will only always visit parameters over & above
competition such as –
 % Adopters  % Will visit X brand hotel
or others  Authentic
 % Accepters
 % Will visit only  Iconic
 % Available
competition  Discerning
 % Rejecters
 Heritage
 Perfectionist
 Etc
 Assessment of Salience, Perception rating and Brand bonding parameters will yield
overall status of our brand in the marketplace vis-à-vis competition …
 It will also highlight areas where we score above competition & whether there are any
areas where we are on par or below that need bolstering
4/5/2012 13

14. Brand equity – Dimensions
 Brand equity research yields the subjective value of the overall brand as well as equity of
individual properties
 It involves exploration of following dimensions & strength of association of values that
emerge from the following articulations –
 Associations
 Decoding of Strengths, Weaknesses & Differentiators
 Brand Values & Quality of Customer Bonding
 Identification of Brand values & quality of bonding involves use of Brand Essence Wheel
 Brand Essence Wheel breaks down the overall equity of the brand into
1. What the product/ brand does for me
2. How I will describe the product/ brand
3. How the brand makes me look
4. How the brand makes me feel
 The above 4 questions cover both rational and emotional aspects with respect to the
brand and hence give a holistic picture of esteem & empathy with brand & can be further
used to developing the core of marketing communications & brand initiatives
4/5/2012 14

15. Brand equity – The Output
Framework of Outputs on the Brand Essence Wheel for brand & Competition
What the property How I would
does for me describe the property
Rational
FACTS & SYMBOLS
CORE
Emotional BRAND
PERSONALITY
How the brand How the brand
makes me look makes me feel
4/5/2012 15

16. Brand health & equity assessment –
Research Design
 Centers recommended
Pan India – Concentrating on all 4 Metros and representation of key Non metros
 Target audience
TG must be representative of the actual universe
Hence need to represent following segments for both brand & Competition across
Luxury, Premium, Mid-market and Value categories –
1. Individual segment
1. Business travelers
2. Leisure travelers
3. Business cum Leisure travelers
2. Corporate segment
1. Enterprise decision makers
2. Employee frequenters across grades
4/5/2012 16

17. Brand health & equity assessment –
Research Design (Contd.)
 Methodology
Brand Health Assessment
Typically, Brand health assessment necessitates Quantitative methodology, but also
needs to be supported by Qualitative methodology for decoding various measures
Technique – Given the nature of TG, typically one-on-one approach works best
Hence One-on-one Structured interviews supported by One-on-one In depth interviews
are recommended
Brand Equity
Given that one is aiming to capture softer nuances in terms of brand associations,
imagery & overall core, Qualitative methodology is necessitated
Technique – Focus groups are best equipped for the task. But for logistical reasons,
one-on-one In depth interviews may also be considered
4/5/2012 17

18. Satisfaction Research
Contents
 Scope of research
 Guest Satisfaction research
 Employee Satisfaction
research

19. Satisfaction research – Scope
 Objective of Satisfaction research is to ascertain current satisfaction levels of key
stakeholders vis-à-vis competition
 Typically, a satisfaction research for 5 star hotel brand covers 2 stakeholders –
Guest satisfaction Employee satisfaction
 Overall Satisfaction with Brand  Overall Satisfaction with company
 Overall Entrenchment with Brand  Overall Satisfaction with individual
work dimensions
 Decoding of satisfaction levels
 Reasons for loyalty / attrition
 Overall customer experience at
our properties
 Overall loyalty, positive WOM &
repeat business for our properties  Overall entrenchment
 These dimensions are detailed further …
4/5/2012 19

20. Guest Satisfaction research – Measures
 Typically, a satisfaction research amongst guests for a high-end hotel brand involves
assessment & decoding of following dimensions at an overall level –
Overall satisfaction rating Overall rating on levels of Overall Satisfaction with
Entrenchment specific properties
 Satisfaction with Brand  Entrenchment with  Image
 Individual Properties ever Brand  Location
visited  Individual Properties  Landscape & expanse
 Facilities across properties ever visited
 Ambience & décor
 Staff across properties  Entrenchment with
brand for different  Room options
 Perceived service levels occasions  Facilities – Restaurant,
across properties Food, Business center,
 Business
Banquet facilities, Spa,
 Leisure Gym, Shopping, Security,
 Business cum Travel facilities etc
leisure
4/5/2012 20

21. Guest Satisfaction research – Measures
(Contd.)
 The research also involves assessment & decoding of following dimensions in detail for
properties in which ever stayed –
Satisfaction with Overall Satisfaction with In-room Satisfaction with Staff
Service service
 Services offered –  In-room ambience  Staff availability
availability  In-room facilities &  Staff accessibility
 Perceived quality amenities  Image
 Overall Service  Room service  Communication skills
Experience  Overall In-room  Responsiveness
 Pricing Experience
 Expertise
 Any other parameters  Pricing
 Courtesy
 Any other parameters
 Empathy levels
 Any other parameters
4/5/2012 21

22. Guest Satisfaction research – Outputs
 Key outputs of Satisfaction research is the rating of our brand amongst own guests and
competition brands amongst competition guests on the following
1. Overall Satisfaction index and distribution
2. Satisfaction drivers and rating on Satisfaction drivers
3. Entrenchment levels and rating on Entrenchment drivers
Overall composite customer satisfaction index, which can be tracked over time
 These are further broken down into various tangibles & measurable domains detailed and
reported at following levels –
1. Overall pan India
2. By Customer segment
3. By Property
 This will also yield the key reasons driving current scores vis-à-vis competition and key
improvement areas that can improve scores in the short-run as well as long run
4/5/2012 22

23. Guest satisfaction research – Design
 Methodology
Typically, this necessitates Quantitative methodology, but also needs to be supported by
Qualitative methodology for decoding current satisfaction levels
Given the nature of TG, typically one-on-one approach works best. Hence One-on-one
Structured interviews supported by One-on-one In depth interviews are recommended
 Centers recommended
Pan India – Concentrating on all 4 Metros and representation of key Non metros
 Target audience
TG must represent all properties for both brand & Competition across Luxury, Premium,
Mid-market and Value categories, covering following profile of guests –
1. Individual segment - Business travelers, Leisure travelers, Business cum Leisure
2. Corporate segment - Enterprise decision makers, Employee frequenters across
grades
4/5/2012 23

24. Employee Satisfaction research – Scope
 Given that the high-end hotel industry is manpower driven, it is crucial to determine
employee satisfaction amongst both current & ex-employees
 This will involve assessment of satisfaction and reporting wrt following dimensions –
 Overall employability rating as an employer in the market place
 Overall satisfaction with working for the company
 Satisfaction with respect to –
– Role definition & clarity
– Work environment
– Day to day working experience
– Interaction with peers / superiors
– Remuneration
– Growth opportunities
– Any other parameters
 Decoding of satisfaction in terms of –
– High points & Low points
– Reasons for Loyalty / Attrition
4/5/2012 24

25. Employee Satisfaction research – Design
 Methodology
Typically, this necessitates Quantitative methodology amongst Current employees and
Qualitative methodology to explore attrition amongst ex-employees
Given the sensitivity of information captured, one-on-one approach works best
Hence One-on-one Structured interviews amongst current employees supported by In
depth Interviews & One-on-one In depth interviews among Ex-employees recommended
 Centers recommended
Pan India – Concentrating on all key Properties
 Target audience
1. Current employees – Front-end & Back-end across different functionalities
2. Ex-employees
4/5/2012 25

26. Brand Mix Research

27. Brand Mix research
 Brand Mix research involves study of impact and efficacy of brand mix elements
(external inputs) in following areas –
Elements testing Delivery related research Secondary research
 Concept testing for a  Sourcing related  Market overviews
new property research  Market intelligence
 Communication  Product (Menu etc)  Trend analysis
development development
 Advertising pre-testing  Pricing research
 Advertising  Benchmarking studies
effectiveness testing
 These researches can address ad-hoc requirements in tune with marketing interventions
for the brand
4/5/2012 27

28. Research for Restaurants
Consumer related research
Contents
 Profiling research
 CAB research
 Consumer diagnostics
 Trend analysis

29. Profiling research
 Objective of Profiling research is to ascertain the profile of customers who
contribute to footfalls and / or business for the restaurant
 Key dimensions on which consumers get profiled are outlined below:
Demographics Lifestyle Dining out
 Age & Gender  Durables ownership  Frequency of dining out
 Education  Shopping habits  With whom & size of party
 Occupation  Leisure activities  Restaurants ever visited
 SEC  Media habits – Print, TV,  Most frequented restaurant
 Income (MHI / MPI) Radio, Internet, Mobile
 Restaurants lapsed out of
 Type of residence internet etc
 Club membership if any  Menu last ordered
 Monthly Spends on dine out
 The research requires quantitative methodology through one-on-one structured
interviews with guests from the database maintained by the restaurant
 Outputs from profiling can be used for appropriate targeting of the restaurant & its
overall milieu
4/5/2012 29

30. Consumer Attitudes & Behavior mapping
 Objective of CAB research is to gain understanding of consumer attitudes & behavior
with respect to dining out / fine dining
 This research is typically done with a developmental view prior to new launch, theme
change / re-design or for an upcoming restaurant
 Dimensions that are explored herewith are:
Attitudes wrt dining out Habits wrt dining out Preferences
 Purpose of dining out  Frequency of dining out Importance, differentiation
 Motivations & barriers if any  Time spent per visit & preferences wrt –
 Expectations from a fine  With whom & size of party  Brand name & Image
dining / 5 star restaurant  Ambience & décor
 Menu last ordered
 Descriptors of overall  Menu – F&B
experience  Monthly Spends on dine out
 Restaurants - Ever visited, Most  Service
 Overall pay-offs sought
 Rational frequented, Lapsed & reasons  Staff
 Emotional  Choice process & drivers of choice  Any other touch points
 Satisfaction, Loyalty & Disposition
 The research necessitates a combination of Quantitative & Qualitative methodology
 TG targeted is frequenters of 5-star / fine dining restaurants across age groups
 Output is typically used to strategize design / launch of the restaurant
4/5/2012 30

31. Consumer diagnostics
 Objective of Consumer diagnostic research is to gauge reasons for either or all of the
following –
1. Consumer delight  Understand delight factors / elicit testimonials
2. Consumer satisfaction  Freeze on aspects that should be sustained
3. Consumer dissatisfaction evidenced by poor feedback / low satisfaction / lapsage
 Aid in taking relevant corrective measures
 Such research is typically Qualitative in nature and conducted through In depth
Interviews
 TG targeted is ‘own’ guests from the most recent (last 3 months) database maintained
at the restaurant
 Output is used to either enhance delight factors and / or take relevant corrective
measures to avert dissatisfaction
4/5/2012 31

32. Trend analysis for F&B
 Trend analysis in F&B is typically undertaken for a restaurant with the objective of
maintaining a sustainable edge in terms of delivery in the fine dining market
 There are 2 stages to any trend analysis –
1. Stage 1: Ideation / Articulation from ‘discerning’ consumers + Chefs, of all F&B genres, menu &
dishes aware of, ever consumed, never consumed & desire to consume, never consumed & do
not desire to consume
2. Stage 2: Classification of F&B genres, key dishes of own & competition restaurants into 4 piles –
Evergreen genres Emerging genres Steady genres Declining genres
Must always be present Not consumed by all, Consumed by many & Declining steadily on
in any 5 star / fine but high desire for winning steady patronage consumption as well as
dining restaurant & will trial / high on imagery – well-accepted but not imagery – Low demand
always be consumed – Growing genre endorsed by all overall
 Stage 1 of the research requires Qualitative interaction with Chefs in the fine-dining
industry and ‘discerning’ consumers, typically acknowledged food connoisseurs / experts
 Stage 2 of the research requires Quantitative structured interviews with frequenters of
fine dining / 5-star restaurants
 Output from the research is strategic in nature and must be used with a long-term
developmental view
4/5/2012 32

33. Research for Restaurants
Menu related research
Contents
 Menu research
 Pricing research
 Fatigue tracking

34. Menu Developmental / assessment research
 There are 2 types of Menu research –
1. Iterative Development
1. This is done at an experimental stage
2. Basic menu developed by chef is force-tasted by consumers by trial offer & rated
3. Based on ratings, the Chef iterates the menu over a fixed time period until scores
are above par on satisfaction & delight levels
2. Menu assessment research
1. This is typically done for a menu already in place
2. Consumer ratings are taken post force-taste through a trial offer to validate
preference and prioritize preference across dishes tasted
3. The research may also be accompanied by feedback to menu card / card options
 Objective of Menu Developmental research is to obtain cues for finalizing menu for a new /
upcoming restaurant or for a restaurant that is changing its menu
 Objective of Menu assessment research is to validate consumer satisfaction & delight specifically
with the menu at the restaurant – note dips as & when they occur for corrective action
 The research is conducted by means of placing a feedback form at the restaurant which every
guest is requested to fill in post meal – findings are analyzed by agency
 Output is used to fine-tune & prioritization of menu options OR to ascertain if any of the menu
options require corrective measures
4/5/2012 34

35. Pricing research
 Objective of pricing research is to aid iteration in arriving upon optimal pricing for menu in
order to make it competitive & to drive preference by means of value proposition
 Pricing feedback for a 5-star restaurant poses following challenges –
– Standard feedback scales & options such as ‘slightly expensive’ or ‘too expensive’
are translated into consumer’s projected image ‘difficult to afford’ / ‘cannot
afford’ … hence standard approach cannot yield results in this category
– For certain menu options, a statistically significant base may not be possible
 In this scenario, all Pricing questions done for menu for a 5-star restaurant are typically
MASKED and feedback is taken at TWO levels for each dish –
– FEEDBACK FROM MENU CARD MINUS TASTING – Respondent asked to rate each menu
option along with recipe and price, on following scales
• Interest in Recipe – ‘1’ being ‘Not at all interesting’ to ‘5’ being ‘Very interesting’
• Willingness to try – ‘1’ being ‘Definitely will not try’ to ‘5’ being ‘Will definitely try’
– FEEDBACK POST TASTING – For dishes tasted, post billing, respondent is asked to rate
each menu option along with price on following scales
• Satisfaction with each dish
• Willingness to try again – ‘1’ being ‘Definitely will not try’ to ‘5’ being ‘Will definitely try’
4/5/2012 35

36. Pricing research (Contd.)
 Analysis is done by checking the extent of negative correlation between ‘Interest in
recipe’ and ‘Satisfaction post trial’ against ‘Willingness to try’
 Research will indicate whether price is having a negative rub-off on overall
willingness to try or not
 The research is conducted by means of placing a feedback form at the restaurant
which every guest is requested to fill in pre-meal and post-meal
 Findings are analyzed by agency
 Output is used to understand whether current pricing is leading to lower trials of
certain menu options or not
4/5/2012 36

37. Fatigue tracking
 Objective of fatigue tracking is to gauge whether consumers are starting to develop
fatigue towards existing menu and whether a re-design needs to be considered
 This is typically an additional analysis conducted post regular Menu assessments
 Key aspects looked into for identifying fatigue with a particular menu option are –
1. Low trial over 3 consecutive assessments
+
2. Consistently low ratings over 3 consecutive assessments
+
3. Low willingness to trial or re-trial
 Fatigue track flags consecutive dips as and when they occur, thus enabling
immediate corrective measures / timely redesign of menu
 This analysis is done only amongst REGULAR consumers at the restaurant (who
frequent the restaurant at least once in 2 months)
4/5/2012 37

38. Research for Restaurants
Mix of Touchpoints (MoT) research

39. Mix of Touch-points (MoT) research
 Objective of MoT research is to have an overall assessment of delivery at the restaurant
in the competitive context
 In this research, own and competition restaurants get rated on following dimensions
– Theme, Ambience, Décor, Lay-out
– Furniture, Cutlery & Crockery etc
– Staff – Image, Attire, Communication, Expertise, Empathy, Turnaround time etc
– Overall Menu – Menu card, Range of dishes etc
– F&B – Presentation, Uniqueness of Taste, Quantity, Innovation in menu etc
– Pricing
– Any other factors
 TG targeted is frequenters of 5-star / fine dining restaurants across age groups + Guests
from the database maintained by the restaurant one-on-one
 Research requires quantitative methodology through structured interviews
 Output compares scores of own restaurant with own guests versus competition
restaurants amongst competition guests – thus serves as an assessment to arrive upon
overall standing
4/5/2012 39

40. AZ Research Partners Private Ltd.
Contact us
Managing Director
Sujay Misra
Mob: 09886103871
sujay@azresearch.in
Director
Shubhra Misra
Mob: 09886111759
shubhra@azresearch.in
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