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The Market Segmentation In The Hospitality Industry Marketing Essay

Paper Type: Free Essay Subject: Marketing
Wordcount: 3075 words Published: 1st Jan 2015

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Many organisations today realise that they cannot appeal to all customers in the market-place, or at least not all customers the same way. Customers are too numerous too widely scattered, and too varied in their needs and buying process (Kotler and Bowen, 2010). Moreover, Kotler and Bowen (2010) added that most organisations themselves vary widely in their abilities to serve different market segments. Each individual organisation must recognise the parts of the market that they can serve the best and most profitably by designing customer-driven marketing strategies that build the right relationships with the right customers. According to Kotler et al (2003), target marketing comprises of three different steps. The first is market segmentation which divides the market into different groups and identifies different ways to develop profiles of the resulting market segments. The second step is market targeting, by evaluating each segment’s attractiveness and selecting one or more of the market segments. And the last step will be market positioning, which is developing product’s competitive positioning and an appropriate marketing mix.

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For years, Market segmentation has been recognised as an inevitable part of marketing theory (McDonald and Dunbar, 2004; Kotler, 2000; Wind, 1978). Therefore, Pine and Go (1995) defined market segmentation as a process of breaking down the heterogeneous tourist market segments into relatively homogeneous segments. Another author has defined the terms of market segments as a process of dividing the potential market into homogeneous subsets of customers by pursuing a marketing strategy and each of which respond differently to the organisation’s marketing mix (Reid and Bojanic, 2010). Different aspects of marketing segmentation have been researched and approached in different ways, creating a rather diverse and chaotic theory base. According to Green and Krieger (1991) market segmentation is known as the basis for marketing mix formulation. Moreover, market segmentation is seen as providing guidelines for resource allocation among products or markets, with implementation at the corporate level (Arnett and Hunt, 2003). Market segmentation in hospitality industry can be groups into two broader categories; they are segmentation based on trip descriptors and segmentation based on tourist descriptors (Seaton and Bennett, 1997). Pleasure travel and business travel are the two main segments that identified as a group of segment based of trip descriptors (Go and Pine, 1995). According to these researchers, pleasure travel segment is considered to be the largest segments that include different purpose of travel (visiting friends or relatives, educational trips, treatments). Moreover, Go and Pine (1995) added that this segment comprises of several sub segments, such as Free Independent Traveller (FIT) , package tour, single segment, senior segment, resort segment, the eco-tourism and adventure segment.

In a segmenting group based on tourist descriptors, the five basic types of variables that can be used by hospitality marketing managers to segment their market are geographic, demographic, psychographic and behavioural variables (Reid and Bojanic, 2010). Segmenting by geographic location is one of the most common approaches to segmentation (Lewis and Chambers, 1989). In geographic Segmentation, the market can be divided into different unit, such as nations, states, regions, countries, cities and neighbourhood (Kotler, Bowen and Makens, 2010). According to Parley (2001) geographic segmentation is efficient if the needs and buying patterns are reflected. Similarly, demographic segmentation is also widely used in almost industries because it is easily measured and classified based on income, race, age, nationality, religion, gender, education, cultural and so forth (Staw and Shoemaker, 2008). However Lewis and Chamber (1989) note that especially in hospitality industry, demographic segmentation might be tricky as the needs and expectations of customers in the same age, the similar income and the same marital status might be different. Therefore as a hospitality organisation, it is important to comprehend the meaning of the demographic factors and their relation with other segmentation.

People in the same demographic group can be having very distinct psychographic benefits (Kotler, Bowen and Makens, 2010). Therefore, psychographic segment are segments based on activities, interests and opinions (AIO), self-concept, and lifestyle behaviours (Shaw and Shoemaker, 2008). According to Paley (2001) the psychographic analysis helps marketers in order to understand customer’s wants and to work out the appropriate approaches that will conform to the lifestyle of those particular groups of people. On the other hand, behavioural variable is another type of variable that can be used to segment the market. This is when buyers are divided into groups based on their attitude, knowledge and use or response to a product. Many marketers believe that behavioural variables are the best starting point for building market segments in hospitality industry (Kotler, Bowen and Makens, 2010).

In conclusion, Selecting target market segment must be done by those who responsible for developing MdTF marketing plan. Market segmentation variables can be used alone or in combination with one and another, depending on the level of segmentation that is desired. As MdTF marketers, they must understand that the foundation of any segmentation strategy is behavioural differences because no segment is meaningful is it does not behave differently from another segment. Therefore, MdTF now has to evaluate the various segments and decide how many and which ones to target. The next step after evaluating, MdTF then need to divide which and how many segments to serve. When MdTF has focus their market only at segmented markets, the company’s marketing can better match the needs of that groups and it also allows MdTF to focus their resources more effectively with a greater chance of success.

Human Resource and People Management:

Motivation in Hospitality Industry

An effective human resource management practices are essential in order to improve the quality of service in both hospitality and tourism industry. It is necessary for the business to be planned in an efficient ways, in order to deliver the employees with materials and resources to do job and in order to have a desire to do their own best. Therefore, Gomez-Mejia (1996) defined motivation as an individual’s desire to complete a task and achieving their goals. Moreover, he added that motivation energizes, directs and sustains human behaviour. Another author defined motivation as a willingness of employees to exert high level of effort toward organizational goals in the expectation that doing so will enable them to satisfy some individual need (Robbins, 1993). It is necessary to understand of the reasons of what are the organisations motivating their employee for. Obviously, the answer is to work harder and producing a better quality. However, this is not the only focus of motivation, but it could also include the motivation to be loyal to the organization, to accept change and to learn new skills (Riley, 2000). There are various motivational theories that can be applied and implement at the individual, group and organizational levels. At the individual level are Herzberg’s two factor theory, Maslow’s hierarchy of needs theory, McClellan’s manifest needs theory and equity theory. Motivational theories and techniques that can best be applied at the group level include Hawthorne effect and equity theory. At the organizational level, the following motivational theories and strategies are most applicable, they are reinforcement theory, job enrichment, job redesign and the Scanlon plan (Frank, 1996).

Motivation plays a major role in achieving high performance in the workplace, especially in this hospitality industry as this industry are depending so much on employees’ performance. According to Lawler (1973), he identified that the most vital determinant of performance is motivation. It could make an organization to become more effective and efficient since motivated employees are always looking for better ways to do their job, usually they are more productive and quality-oriented, and so it is important for manager to recognise the ways of how organizations might influence the motivation between individual employees (Rutherford, 1995). According to Rutherford (1990), he discussed about the aim of any hospitality organizations to motivate their employees because it is very important to have motivated employees. He identified that most managers in hospitality realised that motivation is significant and if employees are passionate about job accomplishments and always try to do their best, the organisation will also get the benefits from it. Rutherford (1990) also noted that goals will not be successfully achieved unless employees are working together as a team, so it is obvious that the need for teamwork is essential in any hospitality organisation. “Motivate an employee” is not just only a job as a hotel’s manager but increase employee’s morale will also be the goal for every service manager in hospitality industry. The morale of employees towards work can be defined as employees’ feeling about all aspects of the job. Building good morale could bring many benefits to the organisation itself. Besides that, there are proven relationships between morale levels, absenteeism and turnover (Rutherford, 1995).

However, other researchers has identified that high levels of employees’ morale do not always produce a high levels of productivity (Ninemeier and Daschler, 1989). Therefore, lack of employees’ motivation in a hospitality organisation will lead to absenteeism, higher employees’ turnover, lower service quality, higher operating costs for recruitment, selection, and training. When there is an increase levels of employees absenteeism in an organisation, they will having problems in scheduling and emergency staffing that will caused an increasing to overall payroll costs in an organisation (Thompson, 1991). Nico and Hagedoron (1996) have found that the increasing of absenteeism caused by inequity of employees’ perception in the workplace associated to their purpose to withdraw, which resulted in the employee calling in sick. Additionally, other researchers have found that the higher frequency of absenteeism caused by several factors such as poor employee morale, unsatisfactory benefits and compensation, inadequate training, personnel conflicts, stressful workplace conditions and employees with unrealistic job expectations (LeeRoss, 1999).

In conclusion, this motivational literature review has discussed of how important of motivation in hospitality industry. As hotel’s managers, it is important to apply the right motivational strategies to managing all staffs in Monastere des Trois Freres (MdTF) as most of the employees are unmotivated. As stated earlier that the lack of employees’ motivation will bring negative impacts to organisation such as absenteeism, lower service, higher employee’s turnover, higher operating costs for recruitment, selection, and training. So in order to avoid the impact caused by lack of employee’s motivation, as MdTF hotel’s manager, he/she must treat people as individuals, empower workers, redesign jobs, provide an effective reward system, and create a flexible workplace. Furthermore, MdTF’s managers must aware of the individual employees’ needs and should design organisation policies and systems in order to help their employees’ needs to be met. Lastly, it is important as a manager to be particularly aware of individual differences such as age, gender, cultural background, sex, job type and income since all of these differences can affect employee needs.

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Accommodation Management:

Quality Management in Hospitality Industry

Managing for quality can be defined as meeting the customer’s expectations of products or services purchased. It might also means reducing hassles, barriers, defects, obstacles, deficiencies, or problems received by customers in the product or service (Ronald, 2006). A simple, customer-driven definition of quality is: “meeting or exceeding the expectations of customers”. So in order to meet or exceed the expectations, it is a must for organisation to fully understand all service characteristics that contribute to customer’s value and lead to customer’s satisfaction and loyalty (Evans and Lindsay, 2010). In the hospitality industry, quality is defined as the product and guest services that are being delivered according to expected standards (Hayes, Ninemeier and Miler, 2011). Delivering excellence quality to guests is needed especially in hospitality industry, as it offers three areas of benefits which include quality creates true customers, quality leads to efficiency, and quality allows profits to be generated in the long-term (Zeithml, Parasuraman and Berry, 1990). There are four development approaches to manage quality which started from the early approaches that relied on inspection, quality control, quality assurance and lastly total quality management or known as TQM (Lockwood, 1996).

Walker (2010) defined Total Quality Management (TQM) in hospitality area as a process that allows all employees of every level in an organisation to work in groups with the purpose to establish guest service expectations and determine the way to meet and exceed these expectations. According to International Organisation for Standardisation (2007), TQM is a management approach for an organisation that based on participation of all organisation members and centred on quality with the aim at long-term success through customer satisfaction. A successful property will employ leader-managers who create a motivating work environment in which guest and employees become the integral part of the mission by participating in organisational goals and objective setting (Walker, 2010). In 2009, researchers have acknowledged that the transformational business strategy will be achieved through quality control of products and services offered (Pavlic and Raguz, 2009). In their research by using the case of Croatia, they discussed how Croatia used Total Quality Management in order to enhance the quality in the hospitality industry, moreover they also added that enhancement of quality is cited to increase sales level, increase profits and guest’s satisfaction (Pavlic and Raguz, 2009). An important characteristic of TQM philosophy is to emphasise prevention, rather than a detection approach to the product or service. An investigation did by Sila and Ebrahimpour (2002) of the total quality based research in all different kinds of industries resulting in several numbers of critical success factor for implementation, such as customer focus, customer satisfaction, employee training, commitment and personal involvement, teamwork, continuous improvement, innovation, employee involvement and lastly quality information and performance measurement (Sila and Ebrahimpour, 2002).

According Saunders and Graham (2008) studies of TQM in hospitality industry areas, they identified that sometimes there is a difficulty to implement TQM due to the adversity in finding the most appropriate quality measures. The study has compared TQM in hospitality and manufacturing industry and the results gives important review on how the concept can be used in hospitality industry in order to improve their quality standards. They recognised of the need to use quality triangle in TQM practices by focus on customers, team work approach to unify goals and use of scientific approach in decision making. Saunders and Graham (2008) added that it is essential to understand that TQM is a wholesome approach which does not only look at one aspect of quality management however it concentrated on quality on all aspects.

Consumers known as the most important determinant of the quality offered because their perception is the most critical factors that can be used by them to show the quality level in the industry. According to Nightingale (1985) study on “The Hospitality Industry: Defining Quality for a Quality Assurance Programme”, he differences the quality perception among customer and manager that greatly compounds in enhance the quality. Therefore the author suggests setting up a program that will assist in monitoring go standards of services to enhance quality (Nightingale, 1985). On other hand, employees also have a lot of influence on quality offered since they are the main point of contact between organisation and customers. Indeed, this point has been reinforced by Kattara and Dina (2008) that did an investigation on the relationship between the negative and positive employee behaviour, customer perception of quality offered and employee’s satisfaction. And this study discovered that employee behaviours whether negative or positive are well connected with customer satisfaction, moreover, customer perception is mainly influenced by the quality they received at a given hotel (Kattara, 2008).

In conclusion, it is necessary to manage quality of services and products provided in Monastere des Trois Freres (MdTF) because quality means meeting or exceed customer satisfaction. Total Quality Management known as TQM concept could be used to enhance quality in MdTF in order to increase the level of sales, profits and customer satisfaction. MdTF should follow the five-phase steps for implementing TQM, they are: preparation, planning, assessment, implementation and lastly diversification. Moreover, MdTF managers need to ensure that their employees are having a positive behaviour because their behaviours are well associated with customer satisfaction. By applying TQM concept in MdTF, it could allow all levels of employees to work together in a group to determine the way of exceeding guest’s expectation. Therefore, MdTF might achieve long-term success through customer satisfaction.


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