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Service Marketing For Budge Hotels A Case Study Of Holiday Inn Express

2606 words - 10 pages

1. IntroductionWhen service industry firstly turned into one of the main economic dominances, it didn't attract much attention from marketing researches (Fisk et al.,1993), as many researchers considered service as a kind of products (Edgett & Stephen, 1993). However, in today's economy it is the service sector that is becoming increasing important. Overall, service industries account for 70% of the UK GDP (Service and Relationship Marketing handout). Thus, there has been a tendency to distinguish between the marketing of physical products and the marketing of intangible service, as the two areas are really different. When purchasing good, the consumer can employ many tangible cues to judge the quality including colour, style, finish, etc, while when purchasing services, fewer tangible cues exist to help consumers make decisions. In many cases service provider's physical facilities, equipment, and personnel are the limited tangible evidence for consumers (Parasuraman et al., 1983), which is a verity for hotel industry. It was argued that attention to physical surroundings is expected to be more important to hotel business compared to other types of services (Verma, 2000). However, as a service organisation, hotels' service quality, reputation are still the most import for consumers' purchase decisions, as they ranked first and second determinants of Dube et al. (2000) research. Therefore, to explore hotel's service and relationship marketing strategies could be a key issue for hotel business success. In this report, one of the leading budget hotels --- Holiday Inn Express was chosen to be analysed in 1) the services they provided, 2) the marketing strategies that used to promote the services in economic downturn; and then recommendations would be provided for adjustment of service and relationship marketing.2. ContextThe recent happened economic crisis and credit crunch in UK has affected the whole economic environment in UK, with no exception of service industry. Hospitality industry is highly influenced for consumers start to cut down their holiday plans and companies also try to reduce their business travel costs. A report by Deloitte (2009) indicated that the economic crisis has driven down the occupancy rate and revenue of European hotels. In UK, November 2008, revenue per available room (revPAR) fell 8.2 percent as occupancy dropped 6.2 percent. By the end of year, year-to-December revPAR was in negative territory down 0.4 percent on 2007 to £59. Deloitte report also mentioned that "2009 will be extremely difficult year for hoteliers across UK with further substantial falls in revPAR to come." However, also according to their report, "the high end hotels, people are not staying so much and downgrading to cheaper hotels because of good PR and costs". In this case, the budget hotel industry in UK is now actually facing a good opportunity of growing. Then, how to improve service quality and customer relationship through service...

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