The hospitality industry is very sensitive due to the nature of what it offers to its clients. The industry offers services to its clients which are intangible. The intangibility of services makes it very difficult to gauge the customer’s satisfaction (Kim, Cha, Knutson, & Beck, 2011). Customer satisfaction is the main role of any organisation that aims to remain in business.
There exist two types of markets; business and consumer markets (Bowie & Buttle, 2004). Business markets refer to those that consist of corporations and organisations that purchase products and services and resell them to make profits.
Others buy products and services to produce other products and services for sale. Consumer markets on the other hand are composed of customers who purchase products and services for personal consumption. The two types of markets differ in a variety of ways. Business markets are involved in complex processes before they are able to make a purchase decision.
This results from the fact that the purchases involve large volumes of products and services as well as many people being involved in the decision making. In most cases, business purchases involve experts in the purchasing process. The involvement of experts means that the purchasing organisation will incur extra expenses. In business markets, there exist formal procedures in the decision making process.
Evaluations of different perspectives of the process and feedback concerning the viability of the purchase are required to warrant the real purchase. The organisation size also makes a significant impact in the buying decision making. In large organisations, the decision making process passes through complex stages before approval. The complexity of the organisational structure also has a bearing in the way purchase buying behaviour. An organisation with many departments may take a longer time before arriving to a buying decision.
Consumer markets on the other hand are simple and involve few people. Once the consumer has identified a need to be fulfilled and information regarding the various products available to meet the desired need, a less vigorous process of choosing the product ensues (McCabe, 2008).
Compared to business markets, the consumer markets are to a lesser extent driven by price. On the contrary, brand of products is a bigger driving force in consumer markets. Stability of demand in consumer markets is high as compared to business markets that have volatile demand. This knowledge of how the two markets function is vital in designing marketing programs targeting the two markets. This is because the programs need to be tailor-made in order to accurately meet the specific needs of the two markets.
James’ hotel mainly caters for organisations that hold conferences, exhibitions, meetings and incentives. This depicts clearly that the hotel targets the business markets. Therefore, it’s very crucial for the hotel to build a good relationship with its customers in this market in order to reap full benefits of their business contacts (Pizam, 2005).
Economic downturn can affect the clients of the hotel in many ways. Since the customers of the hotel are organisations that operate to earn profits, increase in products and services’ cost may act to deter them from making purchases.
James’ business market is seeking hotels that offer up-to-date facilities in terms of conference holding. Due to the high competition among international hotels for M.I.C.E clients, together with the ever-changing technology, hotels in this industry are faced with the challenge of upgrading their facilities to match the technological advancement.
This business market is also characterized by business meetings that seek comfort and convenience. Business travellers are seeking relaxing atmosphere that can sooth their nerves after meetings and conferences (Reid, & Bojanic, 2009). Such comfort reduces stress and increases performance in business travellers.
Clients in Chung’s industry are seeking memorable experiences. This is especially the case if the organisation purchasing the products and services is doing so for its employees for having performed exceptionally well in their work. As an incentive to the workers of an organisation, a memorable experience in the hotel will act as a motivator for the workers to work even harder to earn another incentive tour.
In the international hospitality industry, business markets are different from consumer markets. The first difference is that for business markets, the client to the hotel is usually an organisation seeking to host an event such as a conference or an exhibition. Such organisations require more than just food and accommodation.
They require facilities such as conference rooms, boardrooms and internet services that are needed in the course of their meetings. Contrary to this, a consumer market involves individual clients seeking food and accommodation in a hotel. The arrangements for booking a hotel room or a dinning table may be done by the client by directly contacting the hotel or through the help of a tour operator or agent (Yoo, Lee & Bai, 2011).
Consumer buying behaviour is different from business buying behavior in the international hospitality industry. Consumers are in most cases buyers and users of products and services they purchase except in the cases where they engage a tour operator or a tour agent in their buying process.
On the other hand, in business markets, the purchasers of the hotel products and services are organisations, but the users are employees or representatives of those organisations who attend the events for which the services and products were purchased. Organisations involve experts in the purchase process, who evaluate the viability of the purchase to the organisation to ensure its profitability. Quality of services and products is compared to the cost and with other hotels so that the high quality and affordability are achieved.
Consumers on the other hand seek information on their own in some cases get help from tour operators. They are mainly concerned with quality and comfort. They measure value for their money through comparing their expected service quality with what the hotel offers them. If they perceive their money to be more than the service received from the hotel, they feel dissatisfied, and may not seek the services of the hotel again.
Consumers in the hospitality industry are highly influenced by brand (Williams, 2002). Customers identify themselves with a hotel that offers a brand with qualities that satisfy their needs. Customers, therefore, become loyal to the hotel thereby offering repeat business.
Such customers are less likely to be turned away from the hotel by products and services’ cost increase. Business buying behaviour is, however, influenced to a greater extent by the price of products and services of the hospitality industry. The great influence by price of products and services stem from the fact that organisation purchase products and services to either resell them or make other products or services with the intent of making profit.
An understanding of the differences between consumer markets and business markets as well as consumer buying behavior and business buying behavior will help James in a variety of ways. The differences between the two types of markets require different marketing strategies as well as means to satisfy their varied needs.
Moreover, the characteristics of the business market shows the needs and expectations of the clients in these markets. By clearly identifying the expectations, needs and factors influencing the buying decision process, James can develop a culture in his hotel that will give direction to all employees. The culture should put customer satisfaction to be the centre of interest for the whole hotel. All the decisions made should be tailored towards improving the customer’s experience (Widing, Sheth, Pulendran, Mittal & Newman, 2003).
Building a good relationship is one necessity James has identified. A good relationship can only be established when customers feel satisfied with the service provider. The advent of a good relationship with the customers is establishing one between the management of the hotel and the employees.
Workers who are treated well by the management will serve customers well. James will benefit from such information by ensuring that employees are empowered to make decisions regarding how well to satisfy the clients.
Moreover, all employees from the different departments should be involved in decisions regarding services to customers. This is very useful since they get direct feedback from the customers during service delivery. All these efforts are aimed at ensuring that James’ hotel will retain its customers even during an economic downturn.
Marketing programs are usually designed to entice consumers to purchase an organisation’s products and services (Siguaw & Bojanic, 2003). Knowing the characteristics of the business markets and expectations of customers in them will help James to customize the marketing programs.
When marketing programs contain the information the clients are seeking in order to make their purchase decision making, then it will be effective as customers will probably buy the products and services being promoted.
References
Bowie, D. & Buttle, F. 2004. Hospitality marketing: an introduction. Oxford: Butterworth-Heinemann.
Kim, S., Cha, J., Knutson, B.J. & Beck J.A. 2011. Development and testing of the Consumer Experience Index (CEI). Managing Service Quality. 21 (2), pp.112 – 132.
McCabe, S. 2008. Marketing communications in tourism and hospitality: concepts, strategies and cases. Oxford: Butterworth-Heinemann.
Pizam, A. 2005. International encyclopedia of hospitality management. Oxford: Butterworth-Heinemann.
Reid, R.D. & Bojanic, D.C. 2009. Hospitality Marketing Management. New York: John Wiley and Sons.
Siguaw, J.A & Bojanic, D.C. 2003.Hospitality sales: selling smarter.Connecticut: Cengage Learning.
Widing, R., Sheth, J.N., Pulendran, S., Mittal, B. and Newman, B.I., 2003. Customer Behaviour: Consumer Behaviour and Beyond. Melbourne: Thomson.
Williams, A. 2002. Understanding the hospitality consumer. Oxford: Butterworth-Heinemann.
Yoo, M., Lee, S. & Bai, B. 2011. Hospitality marketing research from 2000 to 2009: Topics, methods, and trends. International Journal of Contemporary Hospitality Management. 23 (4), pp.517 – 532.