For the following case titled Sleepless Nights at Holiday Inn (published in Business Week

and adapted here!

a" Identify the proble#
b" $e%elop a theoretical fra#ework
c" $e%elop at least four hypotheses
Sleepless Nights At Holiday Inn
&ust a few years ago' (o# )li%er' the *hief +,ecuti%e of Holiday Hospitality *orp"' was
struggling to differentiate a#ong the %ariety of facilities offered to clients under the Holiday
flagship-the Holiday Inn Select designed for business tra%elers' the Holiday Inn +,press
used by penny pinchers' and the *rowne .la/a Hotels' the lu,urious hotels #eant for the big
spenders" )li%er felt that re%enues could be 0uadrupled if only clients could differentiate
a#ong these" 1een on de%eloping a %iable strategy for Holiday Hospitality' which suffered
fro# brand confusion' (o# )li%er conducted a custo#er sur%ey of those who had used each
type of facility' and found the following" (he consu#ers didn2t ha%e a clue as to the
differences a#ong the three different types" 3any co#plained that the buildings were old and
not properly #aintained' and the 0uality ratings of ser%ice and other factors were also poor"
Further#ore' when word spread that one of the conte#plated strategies of )li%er was a na#e
change to differentiate the three facilities' irate franchises balked" (heir #i,ed #essages did
not help consu#ers to understand the differences' either" )li%er thought that he first needed to
understand how the different classifications would be i#portant to the se%eral classes of
clients' and then he could #arket the heck out of the# and greatly enhance the re%enues"
Si#ultaneously' he recogni/ed that unless the franchise owners fully cooperated with hi# in
all his plans' #ere face lifting and i#pro%e#ent of custo#er ser%ice would not bring added
re%enues"
SLEEPLESS NIGHTS AT HOLIDAY INN
a. Identify the problem
How clients could diferentiate and cooperative franchise
owners afect the diferentiation?
b. Develop a onept!al model

Improvement
Customer
Service
Diferentiation
Gain more
revenue

Cooperative
franchise
owners

Client could
diferentiate
(+
(+
(+
(+
I"
I"
#"
#"
D"
! "evenue is the total amount of mone# received $# the compan#
for %oods sold or services provided durin% a certain time period&
(www&investorwords&com&
' Diferentation is the process of distin%uishin% a product or
oferin% from others( to ma)e it more attractive to a
particular tar%et mar)et& *his involves diferentiatin% it
from competitor+s products as well as a ,rm-s own product
oferin%s (www&en&wi)ipedia&or%& .roduct diferentiation creates
customer preferences which allow companies to ma)e a$ove
normal pro,ts&
/ccordin% to the a$ove e0planation( there will $e a positive
relationship $etween diferentiation and %ainin% revenue&
1 Customer service is all interactions $etween a customer and a
product provider at the time of sale( and thereafter& Customer
service adds value to a product and $uilds endurin% relationship&
(www& 2usinessdictionar#&com&
2ased on the theor# of customer service( customers will %et
not onl# the products $ut also additional value that ma)e them
$e more satis,ed in products and companies& Since the
companies %ive a %ood service to customers( the possi$ilit# that
customers will $e satisfied and lo#al to the compan# is hi%her&
Conse3uentl#( satisfaction and lo#alt# of customers will lead the
compan# %ainin% more revenue&
4 Client could diferentiate& *he a$ilit# of clients to see diferences
$etween products oferin% $# one compan# and the product of
one compan# compare to other companies& If customers could
diferentiate products in $oth wa#s( the# will $e a$le to choose
the $est product that suit them from all choices the# have&
Customers+ satisfaction and lo#alt# will $e a %ood conse3uence
from it which help companies %ain more income& *hat is the
reason wh# the a$ilit# of customers to diferentiate will ma)e
diferentiation has positive efect to %ain more revenue&
5 Cooperative franchise owners& 6ver# strate%# in the compan#
alwa#s need support from its sta)eholders& In this case( *om
7liver needs a support from franchise owners to ma)e his
strate%# sucessfull# and achieve its %oals (%ain more revenue&
*he support from all of sta)eholders and franchise owners will
support the positive relationship $etween diferentiation and %ain
more revenue&
$ Develop at lea%t fo!r hypothe%e%
H!& Diferentiation positivel# related with %ain more revenue&
H'& Improvement customer service positivel# related with %ain
more revenue&
H1& Client could diferentiate will moderate the relationship
$etween diferentiation and %ain more revenue&
H4& Cooperative franchise owners will moderate the relationship
$etween diferentiation and %ain more revenue&