CHANGING MARKETING MIX OF HOTELS

Mrinal Kumar Himanshu Rai Divya Prakash

Faiz Ahmed
Simpreet Singh Manik Mehra

CONTENT FLOW
Hotel Industry in India Introduction Approach to the case Product Mix Price Mix Place Mix Promotion Mix

HOTEL INDUSTRY IN INDIA

Contributed to 1.2-1.5 % of the GDP 100 % FDI allowed in Hotels Total room supply of around 1,70,000 , expected to double in 5 years Domestic travel to be key driver Business travel & MICE growth drivers Budget & Mid-market segment demand rising Reduction in international tourists travel

INTRODUCTION
The hotel industry covers a wide range of establishments Provides hotel services in the form of:

Accommodation food and beverage Tourism

Brick-n-Mortar
A traditional "street-side" business that deals with its customers face to face

Click and mortar

A type of business model that includes both online and offline operations, which typically include a website and a physical store.

APPROACH TO THE CASE

The research was conducted in two parts:

Consumer Perspective

Consumers were targeted and asked the relevant questions through an online survey.

Owner Perspective

Hotel owners were approached and asked a few questions, the answers to which were recorded. The data so collected was organized and analyzed for the ways in which the move of industry from brick and mortar to click and mortar has affected the marketing mix of the industry primarily under:Product Price Place Promotion

PRODUCT MIX
Internet has again played a very major role in this department. Hotels depended upon tie-ups with travel agencies. Little information about the product offered by hotels. Limited to catalogues and booking agents advise.

IMPACT OF THE INTERNET ON PRODUCT MIX

Information like customer feedback, room rates, and amenities provided is easily available. Many hotels use their own sites to market the product they have. Innovations

Virtual hotel tours Customer engagement through mobile apps Special offers for online customers.

CHANGE IN PRICING
CUSTOMER P.O.V

-Dynamic Pricing -Differentiated and Promotional Pricing -Marginal increase in Price over last year

-At times feels cheated

-Easy comparisons of price

Concept of Dynamic, Differentiated, Promotional, price waterfalls were included 2005 onwards
Hotel booking over net is like booking an air ticket, who controls these prices Change in price over short period of time is amazing, at times it confuses Prices havent increased much, I believe at least I havent noticed it.

One of the goods of online booking, I can compare prices.

Prices After 15 Days

Prices for UK customers

35 = Rs. 2900

CHANGE IN PRICING

Due to a shift of model to the click and mortar model, the price competition

became significant and change in price by one competitor was instantly

reflected in the entire industry. The following were found common across the hotels

Lower Margins Complex pricing strategies (i.e. more time devoted to price planning's) Dynamic and differentiated pricing models

This is what economists describe as a MARKET FAILURE: individuals making decisions that are in their own interests produce a result that is suboptimal, and possibly very damaging, for everyone.

PLACE MIX
Has changed drastically since the advent of the internet and travel websites Conventionally, it consisted of the following: - Direct Individual sales - Travel Agents Often required physical presence; choices to the customers were limited

HOW INTERNET CHANGED THE PLACE MIX

Plethora

of travel websites: Expedia.co.in, Yatra.com, Makemytrip.com, etc.

luxurious hotels like Taj Vivanta, Marriot and Hyatt Regency allow online booking to customers:

Even

Power

Book hotel rooms round the world with the click of a mouse Choose from different available schemes Avail discounts from different websites Choose hotels on basis of services offered, price, etc.

PROMOTION MIX
Current trends Hotel Websites Digital Marketing Mobile Marketing Hotel Email Marketing Link Building Unconventional Marketing

HOTEL WEBSITES
Has become a PoP today in the hotel industry First point of contact with the modern age tech-savvy costumer Allowing or encouraging direct purchase from the web site Disintermediation from agents through loyalty programs and best price guarantees Significant use of the latest multimedia tools to present their facilities in the best light Integration into a hotel groups global distribution system

DIGITAL MARKETING
Establishing

a simple customer service and concierge platform via Facebook or Twitter Providing a vital online community for travel enthusiasts to share experiences Communicating the unique values of individual properties Offering direct reservations via Facebook using booking softwares Manage online reputation, responding immediately to positive & negative reviews.

MOBILE MARKETING
Reservations on the go via smartphones Check-in apps for travelers on the go Geo-location marketing methods i.e delivering real-time promotions to prospective customers in local proximity Text and email messaging for mobile advertising Client loyalty programs using location-based services like Foursquare and Facebook Places

HOTEL E-CRM
Intelligent E-mailing confirmation emails pre-arrival emails thank you emails guest satisfaction survey Efficient Reporting Campaign ROI Report Email Performance Report Profile Report Bounce Report

ANALYSIS
Preferred Means of Booking Hotels
Telephone Booking Online Booking Onsite Hotel Booking

Travel Agent Booking

Problems faced while Online Booking

60 50 40

30
20 10 0 Difficulty in Slow Irrelevant Misleading Payment Response Search & to Query Results Confusing offers Other

Factors considered for booking Hotels

70 60 50 40 30 20 10 0

Types of Promotional Offers

50 45 40 35 30 Regular Discount Loyalty Programs

25
20 15 10 5 0 1 2 3 4 5

Off-season Plans Combo offers Online Booking Discounts

Relative Importance of Factors

50 45 40 35 30 25 20 15 10 5 0

1 2 3 4 5

THNAK YOU