This paper analyzes the service product, elements of marketing mix as well as various challenges faced by Commodore Regent hotel located in 13 Brisbane Street, Launceston, Australia. The undertaken analysis shows that Commodore Regent hotel should use systematic approach to promote its services by using suggested methods and techniques. It is clear that each of the elements of marketing mix (7 P's) has a particular role when it comes to hotel marketing. The synergy effect that results from the combination of these elements is crucial. Correct utilization of suggested strategies will bring success to the hotel, which will continue to face increasing competition. It is also important to ensure that the services offered remain cost effective, thus suited to the needs of clients. The analysis performed is accompanied by strong support of marketing culture, which will allow hotel's management to achieve its goals. For Commodore Regent hotel to increase its sales revenues there is a need to invest more in Internet marketing by using Facebook and Twitter among other applications. Other recommendations include adding more sports facilities, increasing variety of activities within the hotel, and sponsoring staffs further studies among others. In conclusion, it is clear that Commodore Regent is one of the most successful hotels in the 21st century.
Over the years hospitality industry market has become more complex and dynamic. There are numerous market forces, which have been shaping the environment of this industry, in particular the hotel sector (Kotler & Armstrong 2004). Competition between hotels is fierce and it will continue to increase as long as the number of hotels continues to increase and consumer’s expectations continue to change daily (Wenderroth 2009). In the view of these factors, Smith & Taylor (2004) argue that hotels are looking for unique and new ways to improve their position in the market, increase customer satisfaction, and exceed customers' expectation. Marketing has been identified as one of the possible solutions. The marketing mix, or the 7 P’s, is a key to addressing current and future challenges that hotels are facing. According to Kitsisos (2006), the hotel product has all characteristics of a service: intangibility, inseparability, and variability. Therefore, the most appropriate marketing field is services marketing. Services marketingoffers the opportunity to work on 7 P’s, which consist of price, product, promotion, place, process, people, and physical evidence. This paper describes the service industry, analyzes Commodore Regent hotel in Australia using the 7 P’s as well as provides recommendations on areas that need improvement.
Background at Commodore Regent in Australia
Commodore Regent hotel is located at located in 13 Brisbane Street, Launceston, Australia. It operates in accordance with the highest international standards and has impressive guests rooms. It caters for business travelers and people, who wish to relax, unwind as well as enjoy a comfortable stay with their family. The hotel also accommodates a number of transit clients because of its proximity to the City Park and Launceston City. The hotel is home to Restaurant 13 that has sweeping view of the City Park as well as existing menu and wine list. The hotel has 44 rooms, which are designed elegantly and are spacious to meet visitor’s requirements. All rooms are air conditioned, fully equipped with two telephone lines, electronic safe, tea and coffee making machines as well as Wi-Fi Internet connection. Other products offered in the hotel include conference facilities, 24-hour room service, and a variety of cuisines to serve in the diver’s clientele as well as in a business centre. Being a former employee of this hotel, it is clear that the analysis below will be based on my personal experience.
Marketing Mix or the 7 P’s
Over the years, there has been a misconception about the term “marketing”. It has been interchangeably used with terms “sales” and “advertising”. Marketing includes a range of activities aimed to ensure profitable and voluntary exchanges of services or products between two parties (Reinartz & Kumar 2003). These activities are aimed at improving elements of a marketing mixwith the purpose of improving short-term and long-term sustainability of Commodore Regent hotel in Australia. Marketing mix elements to be looked at include product, price, promotion, place, people, processes, and physical evidence. It is crucial to describe each of these elements in respect to marketing environment of Commodore Regent hotel in Australia.
Product element refers to services provided to visitors, both existing and potential. The product element includes all featured services and goods that an organization offers to its customers. Kotler & Armstrong (2004) claim that in service oriented-companies the term ‘service products’ can be used instead of ‘services’, thus making them fall under the product element category. This section evaluates essential features of this hotel as well as how these features are delivered to visitors. Some of the features include branding or association with a particular image and its associated standard level. This is the capability of the hotel to deliver the required standard of support service or product. While working on the product element, the hotel is required to ensure a fair mix of core and peripheral services. The hotel's product typically includes:
- Reception. Reception entails welcome, enquiry, and reservations process of the hotel guest.
- Boarding. This deals with catering and restaurants.
- Lodging. Lodging services handle bed, water, light, room, sanitation, and ventilation.
- Entertainment, which consists of TV, movies, live bands, dances, cultural shows, and radio.
- Personal care consisting of beauty parlors, fitness clubs, and hair salons.
Commodore Regent in Australia products include:
There is a deluxe room of 400 sq. ft in size. It has an executive desk, chair, sofa as well as luxurious marble bathroom. The regent suite is located on the top floor. It has two bedrooms. Each room has a separate bathroom, dining area, office, and private living room. The presidential suite is located on the top level floor. It has two bedrooms each having a separate bathroom, dining area, and living room. Executive suite, having two rooms, is of 700 sq ft in size. It also has separate bedrooms with a king-size bed, suite bathroom, and a large living room.
The hotel has a total of 44 luxurious, executive-sized rooms as well as 2 restaurants serving Australian, European, and Chinese cuisine. Other services include modern, fully equipped health club and fitness centre as well as a spectacular lobby.
Price element of a marketing mix refers to the published or negotiated value of the exchange transaction for a product or service. Price element must represent value to both parties, that is, service provided in reference to the desired profit margin as well as to the consumer in relation to the value for money after consumption of the product or service offered (Picktton & Masterson 2010). The hotel can use different pricing strategies like penetration, competition-based pricing, skimming, price wars, psychological pricing among others. As a result of inseparability of hotel services, the management needs to use tactical pricing, which is of great benefit in promoting hotel business. After years of operating, Commodore Regent hotel in Australia has come up with a major selling tool. Below are some of the ways how hotel's management has used this tool.
- Seasonal Discounts. This involves charging lower prices for guest rooms during the off-season.
- Special Discounts. The hotel offers special room rates for residential conferences.
- Trade Discounts. These are applicable to tour operators and travel agents, where they are given discounts that apply throughout the year.
Choosing Room Tariffs
According to Payne & Pennie (2005), there are specific factors that are considered while establishing prices in a hotel. Some of them include previous rate charges prior to a review, the inflation rate and its effects on cost, economic environment, emerging trends in currency exchange, and the level of competition. The following are factors to look at in the economic aspect of room tariffs:
- Net operating costs (after contribution from food and beverage departments). Net operating cost plus rent, plus interest, and plus a desired return on capital;
- Calculation of total room sales and how to achieve various levels of profits with an assumption that staff numbers and staff standards are known;
- In reference to the above, a schedule should be produced as per average daily rates required in order to break even;
- Based on current quoted tariffs, a hotel can calculate the rate of different sources of business, which must not be lower than the average rate required.
At Commodore Regent hotel in Australia, each room category has a different price depending on size, décor, quality of services, and extra amenities (Commodore Regent hotel home page 2012).
After identification of products and services that consumers desire as well as after setting right prices, there is a need to organize various promotional activities to increase customer awareness and demand for products or services (Kitsisos 2006). These activities include public relations (PR) and advertising in its different forms: point-of-sale, direct mailing, print media or broadcast media, sales promotion, word-of-mouth promotion, personal selling, and telemarketing. The following are tools used in hotel industry for promotion purposes.
Advertisement is a paid form of communication that assists in finding, persuading, and informing potential and existing customers about a hotel. It is important for a hotel marketing team to ensure that they have fully used telecast, print, and broadcast media in their promotional effort to be effective (Kitsisos 2006). Further, when using print media the materials to be used should be of high quality: quality photographs, attractive scenes, and quality paper will help attract attention of intended customers.
Hotels offer incentives to visitors of the establishment in order to promote business. Sales promotion is a temporary device used to increase demand for business products, while aiming at a particular objective. Promotion is complementary to advertising in since objectives of the two do not conflict but reinforce one another. In addition, some hotels also offer concessional travelling and accommodation facilities, especially to their staff. Besides, there are also cases of organizing sales contests.
There are several tools used for sales promotion in a hotel setting, which are directed to tour operators and travel agents, clients, and employees of the given hotel. Some tools of sales promotion are utilized to ensure maximum sales of services and products and effective promotion of business (Fitzsimmons & Fitzsimmons 2006).
The brochure is a promotion tool, which is a pamphlet with hotel's information describing and illustrating services available to clients from different segments. The brochure should be focused on the objectives of the promotion exercise.
Display materials are promotional materials that are displayed at high traffic areas and sensitive points. The materials can be mounted travel agents, tour operator’s offices, or tourist transit points such as resorts, airports, railways, and bus stations.
Giving special offers is a tool that aims to provide special rates on particular services or products in a hotel. These offers are given to users such as travel agents, tour operators, hotel personnel, and suppliers.
When abovementioned tools are used in the right way and with right attitude, sales promotion will be productive and will inevitably benefit the business venture. The Regent Advantage Card system is a promotional strategy, which has been implemented by Commodore Regent in Australia to promote sales of hotel products and services. The scheme allows the owner to have a free meal in hotel’s restaurant. The card holder also enjoys various discounts such as 10% discount at the beauty parlor and 30% discount off the selling price for reservation of a suite room and other benefits.
The place element does not only represent location of a hotel or producer facilities, but it looks at all points of sale in the establishment where customers can access products or services. Kitsisos (2006) argues that due to intangibility and inseparability of services they cannot be stored, transported, inventoried, and that they have to be created and sold at the same time respectively. Below presented are various ways in which hotels bring customers to their products and services.
Direct Individual Sales
This involves a guest contacting the hotel via various channels of communication, for example telephone or email or some other alternative medium.
They are categorized into two groups, namely retail agents and company agents. Travel agents make their money through commission derived from the sale of the hotel service or product.
They act as sales representatives and reservations agents on behalf of a number of non-competing hotels originating from different regions. They market hotels' products and services and they are paid commission depending on the deal they have made and an annual fee that has been agreed upon.
Clients can now use the build-in email facility to check the availability of a hotel room, make reservations, and guarantee the booking. Commodore Regent is connected to the Internet and has an official website http://www.commodoreregent.com.au. Through the website clients make enquiries, check availability of rooms, reserve a guest room, make a down-payment, and make changes in their reservations when necessary.
It is rather obvious that even in the age of sophisticated technological advancement the human resource component cannot be eliminated. This has created a need for more skilled workforce in the hotel industry, especially the front-line-personnel to work in different capacities. The front-line workers are supposed to have proper education and knowledge about services they are selling, thus it is important for training manager to conducts regular training sessions. It is crucial that hotel's management ensures that there is no gap between quality of the hotels services and products promised to visitors and quality offered to them.
Commodore Regent hotel in Australia employees are all diploma or PGDBA in Hotel & Catering Management degree holders. This means that the entire workforce is well educated. The Regent hotel normally organizes regular training sessions to teach new work methods and offer educational courses. Employee’s uniform is a western dress code. Management of Commodore Regent hotel in Australia also takes part in training students through its internship programs, thus enabling the hotel to employ young professionals ready to take over the industry. This way short-term and long-term sustainability of the firm is ensured.
To ensure that core products and auxiliary products are well developed and delivered to the right person at the right time and in the right manner, a hotel must have standard ways of performing different tasks (Kitsisos 2006). When the guest room is being inspected, the housekeeper should ensure that all guest rooms have all required amenities. This is ensured by use of a checklist. There are standards that each hotel employee has to follow. At Commodore Regent hotel in Australia, the dinner service sequence procedure is as follows:
Step 1: Guest is greeted by host(ess) at the entrance;
Step 2: The host(ess) smiles in appropriate salutation, makes eye-contact, and uses guest name if possible;
Step 3: The host(ess) should enquire guest preference about smoking/non-smoking area;
Step 4: The restaurant host(ess) should assist guests with their seats;
Step 5: The table captain should unfold napkins, the rule is ladies first;
Step 6: The table captain must suggest the dinner buffet, and describe buffet highlights - specials for the day and any give all other relevant information;
Step 7: The table captain has to present the food menu along with the beverage or wine list. If a la carte menu is desired by the guest, then he/she can suggest daily specials and inform about non-availability before the food is ordered;
Step 8: The table captain can suggest wine or bottled water. One should use the right glassware;
Step 9: The table captain should always serve ladies first;
Step 10: The table captain should clear table before guests return to the table after a second course;
Step 11: In cases of a la carte menu, the table captain should only clear the table after guests are finished with their meals;
Step 12: The table captain should ensure that they replenish cutlery as required;
Step 13: The server should ensure that the guest napkin is well folded in half and placed at the guest's arm-chair when guest takes a break for a second helping;
Step 14: The server should offer tea/coffee after entrée and clean side plates;
Step 16: The server should always maintain cleanness before resetting the table;
Step 17: The server should place the bill on the table for settlement at guests convenience;
Step 18: The table captain should thank all guests and the use of their names is highly recommended;
Step 19: The host(ess) should bid the guests goodbye;
Step 20: The table captain should only clear the table completely after guests have left.
Physical Evidence or Physical Environment
Kitsisos (2006) claims that hotel products are intangible. The physical evidence plays a crucial role since it acts as a proof that the product will be delivered to the consumer. All physical evidence elements should reflect quality of services that are going to be offered so that the guest is confident about the establishment (Kitsisos 2006). Looking at other elements, they have small influence on 5 senses, but physical evidence is the element that gives hotel products the tangible meaning. Commodore Regent hotel in Australia has a total of 44 rooms. They are all designed aesthetically with luxurious décor and are spacious. The restaurant flows to the lobby giving space for people to meet, catch up, or talk about business.
Recommendations to Improve Marketing Mix
Kotler & Armstrong (2004) argue that the marketing mix only relies on the view of the market analysis and not on customer's view. To deal with this issue various authors have come up with different formulas of tackling it.
Physical Evidence or Physical Environment
As noted earlier, physical evidence deals with physical structure of a building or a hotel (Moorthi 2003). Commodore Regent hotel in Australia physical evidence is about elegancy and style and the physical evidence depicts the same. The hotel has recommendable signage and it is rather difficult for a guest to get lost in the premises.
The entrance hall has glass doors, calved bronze, and a rich hand-woven carpets of an electric mix of western contemporary style and traditional Australian culture. Thus, this shows that the physical environment meets the needs of the service. The aspect that requires improvement in Commodore Regent hotel in Australia is addition of more facilities for sporting in order to increase a variety of activities in the hotel.
Despite the fact that Commodore Regent hotel in Australia has done much to improve this aspect of the marketing mix, there is still a need to make good use of the Internet marketing. As a result of Web 2.0 application, numerous social networks have emerged. These include Twitter, Facebook, MySpace, and various blogs among others. These social sites acts as useful marketing environment for this firm, increasing its accessibility. This is similar to other service industries like British Airways among others. Customer can book and check in through the website. Further, customer complaints can be solved through social networks, thus significantly raising the level of customer satisfaction.
These are set out procedures that a hotel outlines for all employees performing similar duties. They are important because they ensure uniformity to hotel's services, which are heterogeneous. At Commodore Regent in Australia these procedures are followed by all employees in performance of their duties. Sometimes, however, when the demand is quite high, these procedures cause delays in guests services. These delays lead to customer dissatisfaction and in the long-term lead to a declining number of clients.
According to Yogin (2010), Commodore Regent hotel in Australia should use less detailed procedures in its service process so that during the high demand days their employees would use these procedures and save time. This will increase customer satisfaction.
People element in this context means customers, management, employees, and society (Nason 2006). The management of Commodore Regent hotel in Australia has ensured that its employees are educated, but it also needs to ensure that employees are able to compete accordingly and enroll in further studies. According to Kokko (2005), establishments should implement sponsorship programs that reward the best employees with a college degree. This will also work as a motivating factor for employees to work harder in a professional way so that they could be a part of the growth of the hotel.
It is clear that service industry has changed dramatically. This is attributable to changes in technology and increased competition between firms operating in the same field among other notable factors. Commodore Regent hotel in Australia has 44 rooms, which are elegantly desired and are spacious to satisfy consumer’s requirements. It is notable that there is a need to offer high quality services at all times in order to ensure short-term and long-term sustainability of the hotel despite intense competition across the globe. Some of the areas, which can be improved in order to attain this objective include adding more facilities for sporting. This will increase variety of activities within the hotel. Another improvement is to make good use of the Internet marketing using Web 2.0 applications such as Facebook and Twitter. Based on the information presented above, it is clear that Commodore Regent hotel in Australia is one of the most successful hotels in the 21st century.