Sales Development and Merchandising - Hotel Product - Case Study Example

Sales Development and Merchandising Table of Contents Table of Contents 2 Elements of a Product 3 1Key components of Hotel Product 3 2Product Mix and its contribution to sales 4 2.1Market segmentation and its contribution to sales 4 2External sales development technique 5 2.1Factors affecting buyer behaviour 5 2.2Advertising Media for Sales Development 5 2.3External Merchandising to Maximise Customer Volumes 6 3Tools and techniques for internal sales & merchandising in service context 6 3.1Influence of Design and Layout on Customer Spending 6 3.2Effectiveness of Internal Merchandising Materials 6 3.3Promotional Activities According to Different Scenarios 7 4Role of staff in Maximizing sales 7 4.1Personal Selling Techniques 7 4.2Influence of Operational Design on Sales Revenue 8 4.3Principles of Sales Training Programme 8 Reference List 10 1 Elements of a Product 1.1 Key components of Hotel Product The product of a business is the value that is delivered to the consumer, which has a specific need and perceived benefit in the market. The product features include appearance, capabilities, components and its indisputable relevance. Product: The idea of business for this particular hotel is to provide restaurant services along with premium accommodation to travellers as well as local city inhabitants. The product of the hotel can be described in terms of rooms, beds, restaurants and cuisines. Hotel Park Inn has about 39 rooms, of which there are 15 single rooms and 24 double rooms. Each room has facilities of air conditioning, telephone and televisions services. The rooms have a minibar and a shower. Five deluxe rooms have bathtubs. The services of the hotel also include buffet breakfast, lunch services and a´ la carte dinner menus. There is a separate bar enclosure with live music in the evenings. The hotel has a sauna facility and a meeting room meant for conferences. Hotel Park Inn also offers longer stay facilities for guests who wish to stay for longer durations in two apartments, where two fully furnished flats are rented. These apartments are located close to the hotel (Kotler, Bowen and Makens, 2002). Place: The chosen hotel is Hotel Park Inn located in the Bath Road region of London, Finland. The Bath Road region is located very close to the Heathrow airport. There is also a shopping mall located in the vicinity (Booking.com, 2014). Price: The hotel caters to the luxury segment and is priced to cater to premium business clients and travellers (Reid and Bojanic, 2006). Promotion: The hotel uses billboard advertisements and brochure distribution methods for promotional activities. It also offers customised packaged deals for holidays and festivities. The hotel is in growth phase of the industry life cycle because it is still designing new product offerings and developing better services for increasing the room bookings. PEST analysis The political factors that might influence the business of Hotel Park Inn include the special regulations imposed on property located near the airport for safety and security purposes. This restriction might lead to compromises on building height for the hotel project. Economical environment of the hotel has allowed for a good flow of business clients who are willing to pay higher prices for luxury service. Additionally, London is a business hub, which ensures abundance of such clients. Social factor of London are conducive to the hotel business because the strategic tie-ups have a high demand for hotels located near the airport for to enjoy price benefits. Hotels away from the city and close to the airport help in saving costs of transportation and also in availing rooms at discounted prices. Technological environment is slow and does not change quickly, assuring that the hotel shall not be adversely affected by rapid changes in technology. 1.2 Product Mix and its contribution to sales The product mix constitutes product variety, product quality and services offered. The product mix strategy contributes in providing the consumers with choices for the product that they desire. In hotels, consumers have the options of different dishes and cuisines from which they can make choices. Additionally, in room services, they can make choices regarding quality of the hotel rooms and the number of bed preferences. The rooms are also available in standard, deluxe and presidential varieties. The quality in hotel business pertains to location and star ratings of the hotel. In terms of services, one can seek conference room facilities or have special room arrangement for guests. These services help the guests in providing brand identification of the hotel through quality offerings and hospitality levels. A specific type of consumers who prefers luxury hotels or budget hotels has been pointed out by the product mix offered by the hotel. 2.1 Market segmentation and its contribution to sales In any business, it is impossible to manage the entire consumer base in a manner, where one size fits all. Market segmentation in hotel business is performed by way of its product mix, where luxury hotels provide luxury stay and services, while budget hotels provide budget stay and services. Hotels are also distinguished by demographics based on income and occupation. Park Inn Hotel caters to the luxury business class and the traveller segment. Geographically, it seeks people who want to stay in the vicinity of airports (Hsu and Powers, 2002). 2 External sales development technique 2.1 Factors affecting buyer behaviour The factors affecting buying behaviours in consumers can be caused by 4 major factors. Cultural factors: In the event of festivities and holidays, people tend to travel more and therefore, hotels experience higher number of bookings. During such seasons, the hotels can formulate attractive tourism deals along with room booking for the purpose of influencing consumers’ buying behaviour and increasing sales. Social Factors: At business meetings, the culture of providing luxury hospitality to business clients out of societal pressures might create and drive room sales within luxury hotels. Personal: One might choose to dine in the restaurant in order to celebrate birthdays or anniversaries and the prices of meals might adversely affect personal budgets of the individuals. Psychological: The psychological requirement for the hotel to be closely located to the airport drives room sales for most buyers who seek airport proximity stays (Kotler et al., 2003). 2.2 Advertising Media for Sales Development The use of advertising media for the promotion and sales development of Hotel Park Inn has been primarily done through billboard advertisements at the Heathrow airport and prints advertisements in the newspapers for popularising the hotel. Newspaper advertisements assure that general public of the city are also aware of the hotel so as to be interested and make bookings. The hotel has also advertised in leading business houses by distributing their brochures at their travel desks (Walker, 2009). The hotel group also has a special booking desk at the airport so as to facilitate easy bookings for travellers who have landed from their flights. 2.3 External Merchandising to Maximise Customer Volumes External merchandising refers to the advertisements published by the company to promote its sales. These include display techniques like, billboard advertisement and print advertisements in newspapers and magazine, to gain desired visibility for the purpose of enhancing sales. Hotel Park Inn uses billboard advertisements within airports for the purpose of external merchandising. As explained earlier, this approach ensures visibility to the targeted customers. Travellers are expected to notice these advertisements and contact the hotel for bookings. Hotel Park Inn also advertises in the newspapers in order to generate awareness among the local people about the hotel and its location advantage, along with the luxury stay features offered. This action will help to enhance sales and allow the local people to make bookings for their guests (Lewis and Chambers, 2000). 3 Tools and techniques for internal sales & merchandising in service context 3.1 Influence of Design and Layout on Customer Spending The design of a facility includes its location advantages, interiors, architecture, aroma, cleanliness and layout. The layout is simply the manner in which a hotel has been structurally designed. Studies have proved that design and layout of a place has a huge impact on sales of the facility. Hotel Park Inn has been built in close proximity to the airport, which shall attract frequent travellers who come on business trips. The close proximity guarantees hassle free arrival and departure process and travellers need not be stuck in city traffic. The architecture houses a conference room in order to hold business meetings. The cleanliness of the hotel is of utmost importance so as to effectively draw greater number of luxury consumers. The presence of apartments contribute towards attracting travellers who want to stay in city outskirts for longer durations (Amue, Kenneth and Friday, 2013). 3.2 Effectiveness of Internal Merchandising Materials The internal merchandising for a hotel shall be to raise the levels of occupancy through hospitality and services. It is aimed at encouraging repeat customer visits as well as promoting the hotel by means of developing sound relationships with clients. Hotel Park Inn has strategic tie-ups with companies and business houses in London for organising business meetings and arranging for stays for clients and professionals. Such structured deals are offered at discounted prices and as best deals for the professional class. Such offerings will make sure that all business people who visit these companies for work have their bookings made with the hotel, thereby helping to gain higher occupancy rates even during the off-seasons. Another method of internal merchandising by Hotel Park Inn is that of maintaining constant contact and information exchange with the customers who have visited the hotel through the e-mail system. The e-mails are also used to educate consumers over different promotional offers and seasonal offers (Morrison, 2002). 3.3 Promotional Activities According to Different Scenarios The promotional activities that are undertaken ad hoc by the hotel are seasonal deals and tourism packages for the holiday seasons. The hotel sells combination of hotel stay along with day tours to different places in London. Such deals are provided at discounted prices for ease and convenience of the hotel guests. Hotel Park Inn also offers car facilities to the guests for tourism and travel purposes, thereby improving hospitality for the clients. On special days like, Christmas, New Year and Easter, the hotel makes special arrangement in the restaurant menu and the lobby decor for celebration purposes so that people who are away from family can enjoy the occasion. They also arrange for special theme nights at the live music bar in evenings on special occasions so as to attract the local crowd (Bernard and Silas, 2012). 4 Role of staff in Maximizing sales 4.1 Personal Selling Techniques Personal selling strategies by the hotel staff include small exchanges and body language techniques, which can provide the hotel with a feel good factor. These include use of smile, maintenance of cleanliness, knowledge about various products and services offered by the hotel, honesty, helping attitude towards customers and an overall pleasant way of talking to the clients staying with the hotel (Peterson and Zinkhan, 2011). In addition to the above mentioned traits, it is expected that the staff enquires customers regarding their experiences at the hotel and try to attend to their problems and issues with priority. This is a part of hospitality management within the hotel business. 4.2 Influence of Operational Design on Sales Revenue The business operations of the hotel have been designed in such a way that both regular and business clients feel at ease while using services of the hotel. The luxury pricing is aimed at attracting the premium clientele. The functionality of the rooms has been designed to offer utmost convenience, which includes simplified use of luxury bath sets and lighting services. Other operations such as, use of room service or the laundry service, are available over a call in a prompt manner. Quick room service and laundry service make sure that the business clients have their clothes delivered in time and food is served timely for their meetings. The accessibility of the hotel from the airport can also be a part of the operational design, where bookings made at the airport are quickly transferred to the hotel with a stationed car in the airport premises owned by Hotel Park Inn. 4.3 Principles of Sales Training Programme The sales training program for the hotel staff should be designed in such a manner that they are able to develop body language and skills specifically directed at serving the luxury clientele. The hotel staff is hospitable and friendly, but they require training on learning different languages so as to converse fluently with the clients coming from different nations to London for different purposes. Furthermore, such a training program should also enable hotel staff to gain knowledge about the city and its various sites of attractions. This program shall include imparting knowledge about best hotels for different types of cuisines and also vegetarian meals for the benefit of customers. Apart from language training, the hotel staff should also be trained on different aspects of body language in order to improve their personal presentation as well as to comprehend the needs and understand the speech of clients who cannot speak in the local language through an understanding of the body language. Some staff members can also be trained to use sign language for catering to the specially challenged customers. Reference List Amue, J. G., Kenneth, A. and Friday, K., 2013. Physical Settings and Patronage of Three Star Hotels in Nigeria’s Federal Capital Territory Abuja. International Journal of Bussiness Management, 4(3), pp. 738-744. Bernard, B. S. and Silas, K. A., 2012. The influence of physical surrounding on consumer satisfaction. International Journal of Consumer Marketing, 47, pp. 58-78. Booking.com, 2014. Park Inn by Radisson Hotel and Conference Centre, Heathrow. [online] Available at: [Accessed 11 July 2014]. Hsu, C. H. and Powers, T., 2002. Marketing Hospitality. New Jersey: John Wiley & Sons Kotler, P., Ang, S. H., Leong, S. M., and Tan, C. T., 2003. Scanning the marketing environment. In Marketing management: An Asian perspective. Singapore: Prentice Hall. Kotler, P., Bowen, J. and Makens, J., 2002. Marketing for Hospitality and Tourism. London: Prentice Hall Lewis, R. C. and Chambers, R. E., 2000. Marketing Leadership in Hospitality: Foundations and Practices. New Jersey: John Wiley & Sons. Morrison, A., 2002. Communications and the Promotional Mix in Hospitality and Travel Marketing. New York: Delmar Thomson Learning. Peterson, K. B and Zinkhan, S. C., 2011. Does Employee Dynamics Moderate the Influence of Physical Settings on Patronage. Journal of Marketing Review, 56, pp. 102-116. Reid, R. and Bojanic, D., 2006. Product-Service Mix Strategy In Hospitality Marketing Management. New Jersey: John Wiley & Sons. Walker, J., 2009. Hospitality Marketing. New Jersey: Pearson Prentice Hall. Read More