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Hotel Industry E-Marketing

E-marketing is the new trend of marketing extensively acquiring by hotel industry. The traditional marketing strategy of hotel industry now not performing very well. In place e-marketing is taking the drivers seat.

The purpose of the research

The travel industry survives as one of the better performing sectors in e-commerce. With no fulfillment and no need for online payments, the hotel industry is well positioned to capture the full potential of ecommerce while avoiding many of its risks. “Currently, in Hong Kong, China, Taiwan and South Korea, approximately 5% to 10% of all lodgings are booked through the Internet, with 2004 estimates approaching 20%. This would follow the U.S. trend where hotels are reporting that up to 30% of all lodging is booked through online channels. Despite the burst of the Internet bubble, the promise of the Internet for hoteliers is still real: Online distribution can reduce costs, attract affluent customers and lessen dependency on more traditional and expensive distribution channels.”(Ref: - www.igk.co.kr, available on 23/03/2008)

Background

“As of September 2003, 604 million people worldwide had internet access”.

(Ref: -www.cyberatlas.com, available on 23/03/2008)

The Internet is assumed to be an important channel for marketing and distribution of products and services. This is, among other things, due to the cost-effectiveness of the Internet and the convenience for customers. With the Internet marketers can reach out to a broad customer base, locate target customers, identify their needs and communicate with them at a relatively low cost. The Internet provides an opportunity for market testing and optimization. Increasing digitalization will make it progressively easier to experimentally alter particular aspects of a business and quickly observe how customers respond (Wyner 2000).

Since the Web allows access to a plethora of information on different products, the hotel organization must encourage the potential consumer to use the Web site as both an information tool as well as a purchase option. This combination of information search and purchase process is an advantage over traditional retailing as online consumers have stated that personalized targeting is a reason they shop online. When consumers are more involved in the buying process it significantly improves brand recognition and recall.

Research Aim & Objectives/ Research Questions:-

The main aim and objectives of this research was to find out the use, importance and impact of the E-marketing and traditional marketing in hotel industry, explore and analyze which one is the best suited of marketing used by the hotels and its contribution to marketing performance. And finally emarketing and traditional marketing has been compared to reach the desired goal.

Research Hypotheses:

In the light of the achieving the above aims and objectives, the following hypotheses had been constructed: -

Hypothesis (1): The level of use of e marketing and traditional marketing by hotel industry is significantly related to the hotel firm’s marketing performance.

Hypothesis (2): E-marketing vs. Traditional marketing for the performance of the hotel

Structure of the research

The research is consisted of 5 chapters. In the first chapter is introduction of the topic, its background and the aims and objectives was described. Chapter 2 deals with the review of literatures in which all the variables are defined. Third chapter deals with the primary research done by the author and dealt with the findings and analysis of the hotels taken in the sample and the interviews had been put in to diagrams to have better understanding of the topic. Chapter four is dealing with the conclusion derived by the author on overall experience while developing the research; recommendations and limitations has been discussed in the last part of the research.

Literature Review

The researcher had identified a wide range of the literature review (in its wider broad sense which includes: Journals, Academic Books, theses and dissertations, short articles, e-databases, conference papers, etc).

Background

Marketing existed in society for millennia, ever since when people use to exchange from a product with other one, commonly known as “barter system”. Since after industrial revolution, market had taken a big turn and changes the meaning of marketing and gives a new definition to it. It’s been well said that marketing is not all about transaction; it’s also about developing relationship and ties with your guest or customer. And our international hospitality business is all about guest relation along with transaction and as we are involved in a transaction, thus we are engaged in a practice of commerce. “Commerce dealt with purchase and sale of good”. Before introduction of internet in the market, exchange of goods and services from producer to consumer was done through paper work and personnel contact

“Electronic commerce, commonly known as e-commerce or eCommerce, consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks. The amount of trade conducted electronically has grown extraordinarily since the spread of the Internet. A wide variety of commerce is conducted in this way, spurring and drawing on innovations in electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web at least at some point in the transaction's lifecycle, although it can encompass a wider range of technologies such as e-mail as well.”(Ref: www.wikipedia.org, 23/03/08)

“A small percentage of electronic commerce is conducted entirely electronically for virtual items such as access to premium content on a website, but most electronic commerce involves the transportation of physical items in some way. Online retailers are sometimes known as e-tailers and online retail is sometimes known as e-tail. Almost all big retailers have electronic commerce presence on the World Wide Web. .”(Ref: www.wikipedia.org, 23/03/08)

Research Aim & Objectives/ Research Questions:-

The purpose of this research was to find out the use, importance and impact of the E-marketing and traditional marketing in hotel industry, explore and analyze which one is the best suited of marketing used by the hotels and its contribution to marketing performance. And finally emarketing and traditional marketing has been compared to reach the desired goal.

The research had adapted an interdisciplinary approach that makes use of hotel business enterprises marketing, E-marketing, IT, and information systems literature. This is in line with the point of view of Gatticker et al. (2000) who states that researchers should investigate the opportunities offered by the Internet using an interdisciplinary approach. At the same time, because E-marketing is a field that makes use of IT and IS, depending on that the research was considered the appropriateness of the various theories that underpin research into impact of e-marketing in hotel business. At same time the traditional approach of marketing has been compared to find out which one is the best suited for the hotel industry marketing performance.

Consequently, the objectives of this research are as follows:-

To achieve these objectives there was two hypotheses have been constructed to be tested during the research process.

Research Hypotheses:

In the light of the achieving the above aims and objectives, the following hypotheses had been constructed: -

Hypothesis (1): The level of use of e marketing and traditional marketing by hotel industry is significantly related to the hotel firm’s marketing performance.

Hypothesis (2): E-marketing vs. Traditional marketing for the performance of the hotel

Definitions

“Electronic marketing (E-marketing) can be viewed as a new modern business practice associated with buying and selling goods, services, information and ideas via the Internet and other electronic means. A review of relevant literature revealed that definitions of electronic marketing vary according to each author's point of view, background and specialization.”(Ref: www.edamba.eu/userfiles/Hatem%20El%20Gohary.doc, viewed on 24/03/08).

Some of the definitions are as follows: -

Smith and Chaffey (2005) defines it as:

“Achieving marketing objectives through applying digital technologies”.

Strauss and Frost (2001) define it as:

“The use of electronic data and applications for planning and executing the conception, distribution and pricing of ideas, goods and services to create exchanges that satisfy individual and organizational objectives”.

The researcher had followed on Strauss and Frost definition in conducting the current research because: it takes into consideration all the element of E-marketing, all types of products, it illustrate the main objective of E-marking which is creating the exchanges that satisfy individual and hotel organizational needs. Moreover it is the official definition for E-marketing adopted by the E-Marketing Association.

(Ref: www.edamba.eu/userfiles/Hatem%20El%20Gohary.doc, viewed on 24/03/08).

From the researcher point of view, importance and impact of E-marketing in hotel industry has changed the shape and nature of hospitality industry all over the world. Because the rapid proliferation of the Internet, the World Wide Web (WWW) and electronic communication has created a fast growing new electronic channels for hotel marketing. This rapid expanding use of the Internet and other electronic communication for hotel business purposes attracts hotel companies to invest in online presence (Liang and Hung, 1998).

Marketing performance

Nowadays the fact that a hotel firm survival depends on its capacity to ultimate service experience, create value, and value is defined by customers (Day, 1990), marketing makes a fundamental contribution to long-term hotel business success.

E-marketing process used to evaluate marketing performance and effectiveness in hotel industry. On the other hand, when looking to the marketing performance and success measure there are many measures. Recently, in an attempt to organize performance measures Kokkinaki and Ambler (1999) have summarized it and established six categories for marketing performance and success measures which are: Financial measures / Competitive market measures / Consumer behaviour measures / Consumer intermediate measures / Direct costumer measures / Innovativeness measures.

(Ref:http://web.biz.uwa.edu.au/staff/jmurphy/O'Connor_Murphy_ijhm2004. pdfavailable on 12/03/2008)

E-Marketing Performance Measures

Standardized measures for E-marketing performance are both needed and necessary. The discussion of most of the researchers has centred on the following measures (beside the traditional marketing performance measures):

E-marketing performance measures. Namely:

(Ref: www.edamba.eu/userfiles/Hatem%20El%20Gohary.doc; available on 12/03/2008)

“The World Wide Web (WWW), which is the main e-marketing element, launched and started at 1993.”

(Ref: http://www.brad.ac.uk/hub/studentnews/emarketing.doc; viewed on 30/03/08)

“Despite of the fast growth in e-marketing research in the last decade, it appears that only from the late 1980s researches on e-marketing and internet marketing begun to appear in the literature. Starting with the work of: Malone, Yates and Benjamin (1987 & 1989), crossing by the work of: White (1997), Samiee (1998), Wientzen (2000), Porter (2001), Siddiqui et al. (2003), Daniel et al. (2003), Smith and Rupp (2003), Smith (2004 a, b) and ending with the work of: Sheth and Sharma (2005), Sandeep and Singh (2005), De Kervenoael et al (2006), Flavián and Guinalíu (2006), Taylor and England (2006).”

(Ref: http://www.brad.ac.uk/hub/studentnews/emarketing.doc; viewed on 30/03/08)

The research studies investigated and covered a wide rang of e-marketing areas, such as: internet-marketing / e-mail marketing / intranet marketing / SMS marketing / extranet marketing. On the other hand, it is noticed that the literature in Internet marketing covers five main areas, which are:

(Ref: http://www.brad.ac.uk/hub/studentnews/emarketing.doc; viewed on 30/03/08)

E- Marketing components

(Ref:http://www.ionglobal.com/documents/rating_luxury_hotel_emarketing_practices_in_asia.pdf,available on 12/03/2008)

Online Pricing

Enz (2003) also addresses the issue of the networks identified by Dale (2003) above, which she claims are driving down hotel profitability. Noting that hoteliers use these networks without a clear understanding of their effect, she claims that they encourage competition based solely on price and urges a rethink of such hidden discounting.

Citing forthcoming research from the “Centre for Hospitality Researchat Cornell”, she shows how price has become largely transparent and that consumers now book rooms at one price, shop around for better prices and then cancel and rebook. Rather than yield higher total sales, discounting simply displaces customers from one distribution channel to another. Any increase in volume fails to offset the revenue lost from the discounting. Claiming that this is true for all industry segments, regardless of occupancy rates, Enz maintains that hoteliers need to be more selective about the rates they provide to third party sites to insure that they are actually generating incremental revenues.

(Ref:-www.emarketingassociation.com available on 14/02/20080

Pointing out that consumers frequently search multiple channels for the cheapest price, and expect cheaper prices online, O’Connor (2003) investigates if the behaviour of chain hotel brands conforms to these expectations. Using historical data, he surveys rates across five B2C channels to establish whether pricing is consistent across channels; whether one channel is consistently cheaper; and whether the apparent pricing strategy is logical from both consumer and hotel perspectives. His findings show that hotel companies typically use multiple distribution channels, and offer multiple rates across each channel. No channel consistently offers the cheapest price, but the analysis reveals differences based on market segment. Consumers are more likely to find cheapest prices on direct channels (chain website and call centre) at the lower end of the market, and conversely through intermediaries at the upper end. In other words, luxury hotels appear to be offering their cheapest prices though channels with the highest cost of distribution. O’Connor concludes that hotel companies in general do a poor job managing their distribution, and urges them to develop well though-out pricing policies that would encourage consumers to book through brand websites. Anecdotal evidence would seem to suggest that operators have followed this advice, as evidenced by the recent widespread use of “Best Rate Guarantees” on many hotel websites.

(Ref:-www.emarketingassociation.com available on 14/02/20080

Litvin and Crotts (2003) focus on the potential use of online negotiation models in hospitality. While yield management varies prices relative to demand, the rate to individual customers is fixed; hotels set the price and potential guests accept their offer or stay elsewhere. In contrast, negotiation is normal with group sales (meetings, conventions, tour groups, and corporate travel accounts), and Litvin and Crotts explore the applicability of contemporary e-commerce negotiation models to group sales. They argue that the “Consumer to Computer” model, (buyers nominate a price, commit to the transaction and have their offer matched to potential suppliers) is inefficient. Only the highest bid is accepted, other potential customers are left unsatisfied and incremental revenue is lost as non-winning bids are foregone. “Online Requests for Proposal” (buyers detail their requirements, which are then forwarded to potential suppliers) help overcome these limitations, but generally only facilitate matching and have no influence over subsequent negotiations. Litvin and Crotts advocate an “Automated Business-to-Business Negotiation” model, whereby the facilitating company maintains a dynamic database of active purchase and sale intentions, which it cross-compares to seek potential transactions. Once detected, the negotiation process begins and the system attempts to bring buyers and sellers together by adding stated trade-offs as needed. As this takes place automatically, negotiation can occur simultaneously with multiple partners, increasing the likelihood of finding an appropriate deal. The authors argue that this approach is superior as it balances power differentials through matchmaking, and facilitates the entire process. Compiling a critical mass of potential buyer and seller transactions has limited the commercial success, so far, of this application.

(Ref:-www.learnmarketing.net available on 14/02/20080

Hospitality Consumers and E-marketing

Online Consumer Decision Making

Several articles investigate how technology influences hospitality consumer decision-making. Seeking information is one of the first stages in the decision making process. Gursoy and Umbreit (2004) use 3,264 responses from a European Commission survey to investigate cultural differences in how travellers from 15 EU countries search for information, online and offline. They found five distinct market segments and suggest specific marketing communication campaigns for each segment. For example, travellers from Belgium and Italy use external information sources more often than other segments, while travellers from Denmark and Finland use the Internet most frequently. Marketers need therefore to align their marketing efforts with a culture's information search behaviour.

(Ref:- Reid R. D. & Bojanic D. C.(2006); hospitality marketing management; 4th edition; New Jersey; Wiley).

Jeong et al (2003) explore the role of online information and behavioural intention, highlighting the importance of information satisfaction. They claim that this is a powerful determinant of behavioural intentions; lodging operators must ensure that websites satisfy visitors’ information needs in order to expect online transactions. Specific website elements to note include accurate and reliable information, and easy navigation. Susskind et al. (2003) investigate how apprehensiveness towards Internet use relates to information seeking, purchase intention and purchase behaviour.

(Ref:-Mooij M. D.(2005); global marketing and advertising, understanding cultural paradoxes; 2nd edition; USA; Sageavailable on 14/03/2008)

Drawing on three separate surveys to develop and refine two measures, General Internet Apprehensiveness (GIA) and Transactional Internet Apprehensiveness (TIA), their results support strong relationships between apprehensiveness and both online information seeking and purchase.

(Ref:http://web.biz.uwa.edu.au/staff/jmurphy/O'Connor_Murphy_ijhm2004.pdf,available on 23/03/2008)

Card et al (2003) also investigate the purchase decision. Surveying members of the Travel and Tourism Research Association, they found that six out of seven shopped online, with airline tickets the most common purchase, followed by accommodation, travel information, rental cars, event tickets, bus or rail tickets and package tours. They found differences between shoppers and non-shoppers based on personal characteristics, with the former tending to be opinion leaders, more innovative, involved in information seeking and used to TV shopping. Their results, however, showed no differences between shoppers and non-shoppers based on perceptions of online store characteristics. Fam et al (2004) also consider online store characteristics, in particular the role of consumer trust. Their study of New Zealand online accommodation providers and consumers suggests a chasm between actual practice and consumer wants. The latter demand significantly more trust features – guarantees, refunds, company information, privacy statement and email confirmations – than websites currently provide.

(Ref:http://web.biz.uwa.edu.au/staff/jmurphy/O'Connor_Murphy_ijhm2004.pdf,available on 23/03/2008)

Website Layout and Design in process of E-marketing

To account for such differences between consumer wants and website offerings, hotels need to reflect upon their website design. However, research on effective hospitality websites is an ongoing quest. Several studies specifically examined website layout and design. The first two introduce the notion of the experience economy and suggest how Web technologies can reinforce the customer experience (Dubé, Le Bel, & Sears, 2003; Stamboulis & Skayannis, 2003). Websites, for example, should reinforce a hotel or resort's position by going beyond visual pleasures on the site and adding sensual, emotional and intellectual pleasures for online consumers (Dubé et al., 2003). Other authors explore the practical and theoretical issues of howto accomplish this, investigating what features and functions hospitality operators should incorporate into their websites. For example, Jeong et al. draw upon past literature to develop six measures of website quality, namely information accuracy, clarity, completeness, ease of use, navigational quality, and color combinations. Responses from 1,743 US respondents suggest that website quality is an important antecedent of information satisfaction, which in turn is a powerful determinant of behavioral intention. Of the quality measures proposed, ease of use shows the strongest relationships with both information satisfaction and behavioral intentions.

(Ref:http://web.biz.uwa.edu.au/staff/jmurphy/O'Connor_Murphy_ijhm2004.pdf,available on 23/03/2008)

“Chung and Law (2003) develop a performance indicator for hotel websites based on five dimensions of information richness – facilities, customer contact, reservations, surrounding area and website management. Gauging the importance of dimensions from a survey of hotel supervisors, they analyse Hong Kong Hotel Association member websites. Consistent with past research, the level of information technology application relates directly to the hotel category. Murphy et al. (2003) posit that hotels paying attention to email also pay attention to their websites. Measuring email responses and assessing the website features of Swiss hotels, they argue that hotels with professional email responses also lead in the use of websites. Based on their findings, they suggest that hoteliers focus on inexpensive features that show a significant relationship to quality email responses, such as brochure requests, online services, hyperlinks, and branded URLs. Alternatively, their results suggest that hotels avoid questionable techniques such as animation, as it may reflect a bandwagon effect rather than add value. As in other studies, they found that hotel size and category relate directly to quality e-mail responses and the presence of appropriate website features.”

(Ref: web.biz.uwa.edu.au/staff/jmurphy/O'Connor_Murphy_ijhm2004.pdf; viewed on 12/03/08)

Customer Relationship Management and E-marketing

“Piccoli and colleagues (2003) review the risks and benefits of customer relationship management (CRM). This philosophy of intimate customer familiarity can lower marketing expenditures and increase sales through closer relationships and increased satisfaction. For this to occur, the entire hotel chain must cooperate in the collection, management and dissemination of customer information – an expensive and complicated process. They highlight a potential data-ownership dilemma caused by the structure of the US lodging industry in which owners, management companies, and brands cooperate in the operation of properties. It is inherently difficult for these three entities to share customer data. In addition to cooperating, they frequently compete with each other, which could limit successful CRM implementation. Piccoli et al argue that if these difficulties could be overcome, CRM would work best at the brand level, a claim supported by two case studies of brands with strong CRM programs – Wyndam International (Picolli et al., 2003) and Harrah’s Hotels and Casinos (Magnini, Honeycutt, & Hodge, 2003). The latter also exemplifies how successful CRM relies upon data mining. This procedure applies artificial intelligence and sophisticated statistical techniques to customer data to perform five tasks: classification, clustering, deviation detection, associations and forecasting, and can be a valuable tool for hotels seeking to better understand and predict guest behaviour (Magnini et al., 2003).”

(Ref: web.biz.uwa.edu.au/staff/jmurphy/O'Connor_Murphy_ijhm2004.pdf; viewed on 12/03/08)

Two articles investigate the implementation of a CRM system. Based on qualitative and quantitative research with Italian hotel operators, Minghetti (2003) proposes a CRM system and complementary matrix for evaluating guest information, which serve as a convenient blueprint for implementing or evaluating the CRM process. Louvieris and Driver (2004) suggest how the developing XML web standard could enable the CRM process. Consumers increasingly use a variety of devices (for example cell phones, Interactive television and kiosks) to access the web, and need different types of interactions, information and procedures depending on the relationship stage. They show how the current one-size-fits-all approach is unlikely to be successful. However providing the required personalisation to service each situation is difficult using current technology. They propose how the unique characteristics of XML, which uses content specific rather than stylistic tags, could help hotel companies implement the needed device specific and loyalty level personalisation.

(Ref: web.biz.uwa.edu.au/staff/jmurphy/O'Connor_Murphy_ijhm2004.pdf; viewed on 12/03/08)

Finally, three studies investigate a subset of customer relationship management, online customer service. These use similar methodologies to test Swiss hotels (Frey, Schegg, & Murphy, 2003), Tunisian hotels (Gherissi-Labben, Schegg, & Murphy, 2003), and luxury chain hotels (Schegg, Murphy, et al., 2003). Swiss hotels showed the highest e-mail response rates at 71% with Tunisian hotels at a 45% response rate performing worst. Most respondents, however, gave sloppy and inadequate replies, which suggest a lack of focus on online customer service. The authors argue that email communication is business communication and use diffusion of innovations (Rogers, 1995) as a theoretical base to investigate differences in response rates and response quality. There were no significant differences in response rates but larger, higher rated and affiliated hotels tended to provide better quality responses.

(Ref: web.biz.uwa.edu.au/staff/jmurphy/O'Connor_Murphy_ijhm2004.pdf; viewed on 12/03/08)

Some economic and human factors that affect hotel choice

1. Follow the money - Travel decisions are not just about hotels: airline costs, car rental costs and entertainment expenses also drive how companies make choices for approved hotels, in what cities.

2. Familiarity breeds return - The role of chain/brand hotel loyalty programs is a significant benefit to travelers. Companies of all sizes can exert influence over these programs – in some cases aggregating stay points for pooled corporate benefit, in other cases permitting travelers to retain points but only in approved locations/chains/brands.

3. Internal and External Roles - Hotel selection is influenced by relationships that are cultivated over time. Full time corporate traveler managers guide purchasing decisions. Others within an organization may also greatly influence hotel choices. Corporations may use mega agencies to provide soup-to-nuts purchasing management. Mega agencies may be limited to making recommendations only. Mega agencies may be used for their buying power in selected markets and not others. Here again the total travel buy can influence both corporation and agency behaviors.

4. Power is Local – Sometimes overlooked and taken for granted is the principle of local selling: look in your own backyard. This backyard can extend many hundreds of miles in less densely populated area, or it can literally be next door in major centers of commerce. Inbound demand to hotels can be driven by external business factors pushing business to an area. Demand is also driven by factors that pull the business into an area. Local companies who supply good and services to larger corporations up the food chain can create a gravitational force on their customers. Examples of these include product demonstration facilities, heavy equipment sales, science based firms, companies associated with the arts (film, dance, theatre, and music) as well as their suppliers like attorneys, consultants, government contractors and the like.

5. Influence - Hotel chains brands utilize non-resident sales forces (i.e., national sales) to influence relationships and create opportunities for their hotels.

6. Diversity - Multinational companies have additional challenges since very, very few exhibit homogenous practices in their hotel-purchasing regimen. Typically they segment into areas or regions of common practice. Which of course means uncommon practices across other areas/regions or divisions. Diversity becomes the standard. Hotels can advantage themselves by deploying sales efforts against the right people in the right areas. Again, finding out what is “right” is a function of local market awareness

(Ref:http://web.biz.uwa.edu.au/staff/jmurphy/O'Connor_Murphy_ijhm2004.pdf,available on 14/03/2008)

Conclusions

Compiling this review of literature on e-marketing uses, impact and importance in hospitality industry has been for author a useful and enlightening exercise. On an individual basis, the articles considered for inclusion make a contribution.

The above literature is collected in a view to derive the importance and impact of e marketing in hotel industry. This study e-marketing strategy not only as an antecedent, but also as an outcome, of performance. Considering the rapid growth of e-commerce in our marketplace of hotel industry, there seems to be a need to assess what is really happening in the hotel world. So the literature review was mainly focused two sets of relationships: Performance--Marketing effects and E-Marketing-- Performance effects. The importance and uses of marketing has been discussed.

Findings Of Analysis & Discussion

“Hotel Companies of all sizes are challenged with generating high-quality E-marketing plans that showcase their product information to key target customers using varying resources. Nowadays many hotel companies do have the benefit of well-established procedures, advanced electronic equipment and sophisticated teams with a track record. Additionally, emarketing impact and importance for my hotels is really encouraging as we are using the Internet marketing as prime tool for marketing.”

Said Mr. Ajit das the Park Hotel, Asst. Manager, regional sales.

Now author had analyzed the research according to the questions asked during he primary research with the help of graph

The all three hotels taken in the sample have heir website and online reservation system and the emarketing strategies. Author has analyzed these three hotel with help of data collected from 15 mangers (5 from each hotel has been interviewed).

All the three hotel have the website present in their portfolio. When the respondents were asked who manages this website the reactions was different:-

Hotel The Park Hotel and The Residency and The Intercontinental said their websites are managed by hotel itself. Hotel c executives said their website are managed by third party.

The impact of e-marketing is very positive when the hotel web site is managed by hotel itself. Choosing which tasks to assign and, which ones to handle personally, is often the measure of successful management. Some managers interviewed view Internet marketing as a purely static and inert form of advertising, which requires little attention after the site is published. Because of this mistaken belief, managing the Internet and other electronic marketing sometimes gets assigned to someone else to maintain. This could be a big mistake. The Internet’s deceptive simplicity fools many hoteliers into believing that all they need do is to have a web site created publish it to the net, and business will come flowing in. Mr. Sharma Sales Manager Intercontinental hotel said

“We’ve all learned that the Internet is intensely complex; it’s not just what your site says that’s important, it’s how it says it that’s important, too. You can get it to work for you. So the impact will be higher. We are using the e-marketing as our main tool for marketing.”

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How the consumers in these hotels make reservation for the booking of the room consumers would from travel agents, walk-ins or through the website.

59% of the reservations are made through the online reservations using the website that the saves the cost for the hotel. Hotel can save the cost of other variables if the reservation has been made from he website. The second mode of making reservation is through the travel agents, which is the conventional mode. Customers made reservation by heir own physically go o the hotel has been voted as 8%. 2% of the respondent said there are other methods customers make reservations.

Do the alternatives offered by Emarketing reduce the overall cost of sales & marketing the traditional way of marketing?

Talking to Mr. Gautam about the traditional style of marketing and the email marketing he the traditional marketing has a good effect on the hotel industry but so far as e-marketing is concerned it order of the day. He added, “Email marketing can be one of the most effective ways to deliver revenue growth to our hotel. Staying in touch with your past guests and your prospects is a very valuable tool and should be an integral part of Internet Marketing campaign.” As now we are focusing on e-marketing campaign.

So far as cost impact of traditional marketing and e-marketing concerned, 76% of the managers has said that traditional marketing has got much more cost involved in comparison to emarketing. The respondents said that alternatives offered by E-marketing reduce the overall cost of sales& marketing of the hotel. Some of the respondent felt this in their organization. At the same time 24% of respondents still feel that emarketing is a good method of marketing in terms of customer satisfaction and the business of the hotel but it hardly makes any difference in overall cost of sales and marketing because of the initial investment and maintenance involved in e-marketing.

Based on the above answer researcher has asked to know that why e-marketing is the effective way to market the hotel products even thou traditional method of marketing is a good tool for marketing the hotel products and services.

The respondents were asked this on the scale as discussed in the Research methodology.

After the analysis through the literature review and the respondent reactions researcher has found that e marketing has more to offer for marketing hotel product and services.

Most of the respondents were agree with that E marketing lowers the cost of customer communication. Previously when the traditional marketing was in the practice the cost was high such as hen telephones were used for the communication with the customers then the cost was very high for the hotelier. Emarketing has changed the scenario now the customers are contacted via email and the hotel is able to the cut the cost and giving more efficient services to the customers.

Respondents were slightly agreed on that e marketing keeps offers out of the view of the mass market & potentially to the competitors. This makes e marketing more in demand. The traditional marketing is not very effective in terms of competitors.

In India many hotel organizations and is practicing e marketing and some of them are still in a process to practice e-marketing process. But respondents are slightly agree on the execution of e marketing that Emarketing can be executed quickly with in-house resources in comparison to the traditional method of marketing.

E-marketing addresses consumers that are actively looking for hotel offers, Cost effective way to address, on his respondents are slightly disagree. They said that there are other means of addressing customers; the cost involved in acquiring full-fledged emarkeing is little higher.

E marketing has leveled the playing field and allows small chains & even independent hotels to compete head on with the major brands all of the respondents were agreed on this. Respondents strongly feel that the traditional marketing do not provide the opportunity to small hotels. Now the introduction emarketing in independent hotel has changed the scenario of the hotel business.

According to the review of the literature and the results primary research over the past three years, search engine marketing has become the fastest growing advertising medium in the world. New firms are emerging and established firms are growing rapidly.

Mr. Kumar said when asked about e-marketing approach in Indian context

“With the change in traditional marketing, as difficult as it may be to believe, there are still millions who fall for that old, “better living through automation” argument. Another pitfall for practicing emarketing Hotel Company that is not prepared to meet new technological innovations. As the search world changes, good, honest company are prepared to adapt and tell their clients exactly how that evolution will take place and why.”

E-marketing vs. Traditional Marketing

Respondents were interviewed on this topic with the help of the scale. Respondents were asked abut both the marketing techniques and compared as per the literature review. Respondents were asked share their experience regarding both the marketing techniques.

Respondents were asked that Internet ads are relatively simple to create than traditional ads .34% Respondents were slightly agree on this but they were not fully agreed on this.

This is because some hotels taken in sample still in process to implement emarketing in their system. So currently they are comfortable with the traditional method of marketing.

At same time 38% respondents were slightly agree on that Internet ads are relatively inexpensive to develop than Traditional adds. The cost factor involved in developing ads under traditional marketing is high due to the use of other Media such as new paper, magazines etc.

So far as question 3 is concerned Internet marketing is easy to update as condition Change when compared to traditional one. Such as in the case of e-marketing one needs to up-to-date the website for all the changes while in the case of traditional marketing it is expensive for updation. Respondents were slightly agreed on this.

Internet advertising is easier and faster to test as compared to Traditional marketing 38% respondents were slightly agree with this.

Internet advertising promises real-time interaction with consumers where as traditional marketing lacks to promise real-time interaction with the customers. Most of the respondents were slightly disagree with it.

When the customers were asked to compare with traditional media, the Internet has been

Very good level of advertising content is 52% of the respondents were totally agree on this.

Finally respondents were asked about the overall performance of the hotel, whether e marketing has some impact on the bottom line of the hotel. They say yes and said that it adds to the bottom line of the hotel.

So the above discussion shows that traditional marketing is good for hotels but when it is compared with the e-marketing, emarketing has more to offer for the better marketing performance of the hotel.

E-marketing provides services such as

Finally the survey results clearly showed hoteliers understand the need of hotel Internet marketing even thou hoteliers are still using the conventional marketing strategy. Now hoteliers are taking a holistic view of the hotel online environment and adopt a comprehensive, long-term strategic approach to grow the online channel. No longer viewed as a source for only incremental sales, the website is a major revenue driver and requires an online marketing budget to support the activity.  Today’s hotel marketing budget tends to include specific line items addressing direct web marketing. These are treated as “fundamental” and include website re-designs, organic search optimizations, search marketing, email marketing, strategic linking, online advertising and public relations, and new media formats such as Web 2.0 which includes social media, CGM, and blogs.

Here are some main findings from the survey:

Percentage of Business from the Internet

In 2007 over 32 % of hotel bookings were generated via the Internet. Approximately 62% of those were done via hotel branded websites (i.e. Direct Online Channel)

This result is on par with the industry and underlines the importance of the direct channel in the overall Internet strategy.

Conclusion

The performance of any firm depends upon how effective the sales and marketing strategy of the hotel is. Hoteliers relied much on conventional method of marketing such as travel agents and other third party agents but now, the Internet has become the largest and most important marketing and distribution channel in hospitality industry. As hoteliers learn more and more about Internet marketing, they are realizing that there are many missed opportunities and that the Direct Online Channel website is their most cost-effective revenue generating channel. The fundamentals of an Internet marketing strategy - a hotel website that follows best practices, search engine marketing – both paid and organic and email marketing, continue to receive the highest budget allocations.

The survey showed that email marketing, website optimizations, paid search, local search, and Meta search initiatives have become a hot topic in the industry and hoteliers are eager to explore these new media formats.

Another interesting result of the survey is that, the industry reported that online business is coming from their own website more than third parties. This shows that hoteliers are embracing direct online distribution. Hoteliers expect this to become the norm over the years as hoteliers continue to increase their knowledge of Internet marketing and the benefits of making their customers their own from the first point of contact.

Now the hotels in Delhi focusing more on emarketing strategies for the better marketing performance of the hotel. Some of the hotels in Delhi are still getting lots of business from the traditional method of marketing. But now these hotels are realizing that emarketing has more to offer and they can save. The marketing performance of the hotel can be improved with the implementation of the e marketing.

Considering the rapid growth of e-commerce in hotels marketplace, there seems to be a need to assess what is really happening in the managerial world. Author believes that marketing researchers generally are ignoring a significant part of the marketing-performance phenomenon.

Author suggests that in highly competitive markets an innovative organizational culture is required. In competitive environments firms have to constantly collect information about market competitors and environment, and as a result will have to be flexible, open to new ideas, and present quick decision-making when implementing the web-strategy. On the other hand, in the less competitive environments the fact of having, or not, an innovative organizational culture might be irrelevant when implementing web-strategies. Hence, in addition to the analysis of the direct relationships, future research may empirically test the conceptual framework presented here.

Abstract

While building on the marketing performance of the hotel, this research proposes a conceptual framework that links five factors:

Future research is encouraged to build on this framework to test how internal and external forces of the hotel firm, along with its past performance, influence the determination of e-marketing strategy and how in turn, e-marketing strategy impacts on performance at the web and firm levels.

(Ref:http://portal.fe.unl.pt/FEUNL/bibliotecas/BAN/WPFEUNL/WP2004/wp446.pdf; viewed on 14/03/08)

In the increasingly dynamic online hotel industry, hoteliers are challenged with keeping up with changes while also keeping an eye on the fundamentals. What are hoteliers doing to reach their customers using traditional and on the web as emarketing. They are spending their budget on some Internet marketing practices over others. Most business coming from on the Internet – the hotel’s own website or third party intermediaries or through traditional style of marketing.

The purpose of the survey was to assess hoteliers’ marketing performance through traditional and Internet marketing priorities and strategies in order to compare the responses with the results received, and to provide the industry with insights into how Internet marketing strategies for the hospitality industry are evolving.

The survey was competed taking 3-hotel firms of Delhi and 15 managers were interviewed to get the result. The survey results found that the traditional method o marketing is good for the hotels but when it was compared with the emarketing, emarketing has a lot to offer thru marketing performance of the hotel.

Research Methodology

The best way to find this information is to conduct a survey. This chapter is intended primarily for methodology used in the research. It discusses options and provides suggestions on how the methodology has been designed and conducted a successful survey project.

The basic process of survey research can be outlined as follows:

There are two methods used for this research. These are as follows:-

Secondary research

Data may be described as Secondary data - collected by others to be "re-used" by the researcher

Qualitative Sources

Ways of Using Secondary Sources

Limitations of Secondary Data

Primary research

Primary research is information collected by the researcher. This includes information from exploratory experiments researcher performs, surveys they take, interviews, and responses to the letters. Interview people who have special knowledge about the topic. These can include teachers, doctors, scientists, manager or others whose careers require them to know something related to the topic.

Structured Interview Schedules

This document mainly gives advice on the construction of questionnaires for direct reply; the structured interview questionnaire can be dealt with in a similar but slightly different way. For example, questions asked orally are usually phrased differently from those written down and it is important to include detailed conversational text when an interview is conducted face to face or by telephone.

(Ref: http://www.leeds.ac.uk/iss/documentation/top/top2.pdf; viewed on 13/03/08)

Self-Administered Questionnaires

Relying on the respondent to complete the questionnaire has some clear implications for design. Respondents are more likely to commit to answer a questionnaire when they see it as interesting, of value, short, clearly thought through, and well presented. However, even though respondents might start to fill in the questionnaire they may give up if they find it hard work to complete. Inducements to complete surveys can be used, e.g. offering a report of the survey findings to respondents or entry in a prize draw.

It is good practice to send questionnaires to an identified individual and not simply to, for example, “the Managing Director” or “the Personnel Manager”. It is a good idea to get a ‘foot in the door’ by asking each potential subject to complete a very short pro-forma, confirming a few essential details, including name and address. You will get a higher response from this first approach; this could be done by telephone and then followed up with a full questionnaire by post. Introductory letters, reply paid envelopes and follow-up telephone calls also help to raise the response rate for self-administered questionnaires.

Questionnaires can be delivered to the respondent by various means including post, e-mail attachments or via publishing on a web site for interactive completion.

(http://www.leeds.ac.uk/iss/documentation/top/top2.pdf; viewed on 12/03/08)

Personal Interviews

An interview is called personal when the Interviewer asks the questions face-to-face with the Interviewee. Personal interviews can take place in the home, at a shopping mall, on the street, outside a movie theatre or polling place, and so on.

Advantages

Disadvantages

Identify the Population and Sample

The population is simply all the members of the group that you are interested in. A sample is a sub-set of the population that is usually chosen because to access all members of the population is prohibitive in time, money and other resources. A key issue in choosing the sample relates to whether the members you have chosen are representative of the population. Often the sample is chosen randomly from a list that contains all the members of the population; such a list is called a sampling frame. Some methods of selecting samples, e.g. quota sampling, do not require a sampling frame.

To determine the sample size it is usual to work back from how many responses (completed questionnaires) are required for the analysis. One rough and ready rule is to look for about 20-30 responses in each of the major sub-categories of the sample. For example, if a key aspect of your research is to compare male and female then you should look for about 30 males and 30 females in your responses. This number then needs modifying by the anticipated response rate to determine the target sample size. It is quite common for survey response rates to be around 20%, which means sending out five times as many questionnaires as you want returning. For the example above this would mean 300 questionnaires to obtain 60 responses.

(Ref: http://www.leeds.ac.uk/iss/documentation/top/top2.pdf ; viewed on 14/03/08)

Sample Design

Sample design covers the method of selection, the sample structure and plans for analyzing and interpreting the results. Sample designs can vary from simple to complex and depend on the type of information required and the way the sample is selected.

Sample design affects the size of the sample and the way in which analysis is carried out. In simple terms the more precision the market researcher requires, the more complex will be the design and the larger the sample size.

The sample design may make use of the characteristics of the overall market population, but it does not have to be proportionally representative. It may be necessary to draw a larger sample than would be expected from some parts of the population; for example, to select more from a minority grouping to ensure that sufficient data is obtained for analysis on such groups.

Many sample designs are built around the concept of random selection. This permits justifiable inference from the sample to the population, at quantified levels of precision. Random selection also helps guard against sample bias in a way that selecting by judgment or convenience cannot.

(Ref: http://tutor2u.net/business/marketing/research_sampling.asp; viewed on 14/03/08)

Defining the Population

The first step in good sample design is to ensure that the specification of the target population is as clear and complete as possible to ensure that all elements within the population are represented. The target population is sampled using a sampling frame. Often the units in the population can be identified by existing information; for example, pay-rolls, company lists, government registers etc. A sampling frame could also be geographical; for example postcodes have become a well-used means of selecting a sample.

(Ref: http://tutor2u.net/business/marketing/research_sampling.asp; viewed on 14/03/08)

Sample Size

For any sample design deciding upon the appropriate sample size will depend on several key factors

(1) No estimate taken from a sample is expected to be exact: Any assumptions about the overall population based on the results of a sample will have an attached margin of error.

(2) To lower the margin of error usually requires a larger sample size. The amount of variability in the population (i.e. the range of values or opinions) will also affect accuracy and therefore the size of sample.

(3) The confidence level is the likelihood that the results obtained from the sample lie within a required precision. The higher the confidence level that is the more certain you wish to be that the results are not atypical. Statisticians often use a 95 per cent confidence level to provide strong conclusions.

(4) Population size does not normally affect sample size. In fact the larger the population sizes the lower the proportion of that population that needs to be sampled to be representative. It is only when the proposed sample size is more than 5 per cent of the population that the population size becomes part of the formulae to calculate the sample size

(Ref: http://tutor2u.net/business/marketing/research_sampling.asp; viewed on 14/03/08)

This research is has followed an in depth interview questions of three hotels in Delhi and Gurgaon.

The sample size taken was collected from 15 mangers (5 from each of the hotel has been interviewed).

The sample size taken was small because the research was for academic purposes that’s why the researcher was not getting appointment to the managers. The author has chosen three hotels because these hotels are practicing emarketing and one of them are in a process to practice it.

Bibliography

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