Hotel and Marketing Mix
B629- Managing 2: Marketing and Finance EMA Problem related to marketing mix and performance measurement By Yennifer Pereira (PI: A8407709) August 2012 Contents Word count: 2415 Section: 1. Description of my organisation 2. Description of the marketing mix 3.
Identify, analyse and summarise a problem relating marketing mix 4. Solution 5. Identify, analyse and summarise a problem relating performance management 6. Solution 7. References 1. Description of my organisation
Travelodge is budget hotel brand that was launch on the UK in 1985 and currently operates more than 450 hotels in Ireland, Spain and the UK. The company is growing very fast and is planning to operate more than 70,000 rooms, approximately over 1000 hotels by 2020 and be the biggest hotels operator in London by the 2012 Olympics. Around eight million people stay with Travelodge every year, booking the rooms online at the company’s webpage. The chain employs more than 6000 staff and is currently owned by Dubai international Capital which acquires the chain on 2006.
I had been working in Travelodge for three years, working my way through from chambermaid, receptionist to assistant manager, currently been in position lest that 6 months and still learning the company targets and focus in the market. Currently Travelodge is undergoing their biggest remodelling in their hotels in order to gain back the customers lost to Premier Inn their biggest competitors in the low budget market, due to the poor quality in customer service and the quality of service in the previous years. . Description of the marketing mix Marketing mix is refer as creating the right product that will attract the attention of their customers and this can be done by creating the right product, at the right price, in the right place using the appropriate promotions. Travelodge uses the marketing mix technique on their daily basics as part of the revenue team to generate the savers prices that we use online.
Travelodge proud itself from providing low prices and clean and fresh rooms to our main stakeholders which are our customers, but in order to achieve that they must have a revenue team in charge of controlling the prices and promotions put online according to the location of the hotel, time of year and other issues, our revenue team works in this by using the 7 Ps of marketing. To start of they focus in the: Product: Our product will always be de same in all the hotels a clean and fresh rooms Price: This is taking into consideration after the hotel is analysing depending the time of year, location, size and other features.
For example to book a room in February during the week in Bournemouth will cost you if book in advance as little as ? 19 per night, the same hotel also book in advance for the same day of the week will cost you as much as ? 80, due to the location and the season, in the other hand if you book a hotel in Bournemouth town centre will normally cost you around 20% more that a road side hotel near Bournemouth. That is why is crucial to analyse all the perspectives before setting the prices.
Place: This is crucial when planning the revenue of the hotel as a road side hotel will not be as busy as a city centre hotel, or a seasonal hotel is not as profitable in winter as a London hotel in the main shopping street in the same period. Promotion: Travelodge on the daily basic our coming out with promotions to encourage customers to stay with us, a good example of this is that if you book online or by phone on the day, you will get a 10% discount rather that booking direct over the desk.
We also encourage guest to purchase food and beverages by always making sure we have promotions available. People: Travelodge focus on hiring the correct team to ensure that our customers has the best service as possible from the moment they book all the way to the moment they check out. This can only be achieved by providing the right training and developing the right skills to ensure customers receive the best customer service. Processes: Travelodge nsures that all our hotels provides the same process across all the company, by ensuring that customers are deal correctly, that layout looks fairly similar, that we provide same services across the hotels and that we always are providing the correct service. Physical evidence: This is the evidence that our customer sees when he comes into a Travelodge and sees that staff all in uniform, everything branded, currently this is our main problem that not all the hotels look the same due to the layout and most of then require a brand update. . Identify, analyse and summarise a problem relating marketing mix Identify Our main focus in Travelodge is pleasing our customers by providing affordable, clean and fresh rooms, but as Travelodge been open since 1985, is difficult to provide the same standard in every hotel, the main problem that we currently have is that our hotels look completely different due to the different refurbishment that we had have over the years, as Travelodge opens a new hotel a new trial runs in that hotel and is use for a few years.
Currently when a customer walks into a room in Travelodge they never know what to expect as no all Travelodge’s look the same. Analyse As a customer you expect when you walk into a hotel that will look as similar to the other hotels of the same brand, but when a company has been open for more than 26 years is difficult to maintain the same standard across their hotels. Travelodge is currently having an issue with the Physical evidence in his marketing mix, which is affecting the corporate image in overall.
This issue has arise due to cost issues, the company main target in previous years was to spend revenue in building and opening new hotel, as new building arise new refurbishment ideas follow, and different layout happen without been concern on the image and standardization of the brand. Even though Travelodge has been very good in maintaining a set a strict rule about the advertisement provide in each hotel, all the leaflets and brochures were the same and similar supplier use, the actual hotels rooms due not comply with the corporate image. This in overall affects the perspective not only of the customer, but the staff members.
This links with the concept that there are four critical areas of success, the customer perspective that if is currently no been meet, the internal process perspective which are no satisfying customer needs as we are providing in some cases old, out of date and damage rooms, the innovation and learning perspective, also no been accomplish as the repeats customers keeps using this Travelodge’s but no does not sees any improvement or change and the financial perspective which is also no been meet due to having to spend more money in opening hotels and not focusing on refurnishing the old ones.
Summary To summarise the problem Travelodge has spend too much money focusing in building new hotels, that focusing in the corporate image, due to the different layouts in rooms, location of hotels customers expectations are no been meet and this is affecting the perspective no only of their customers but also they employees. 4. Solution Travelodge has realise that this is a major issue and after 26 years has started to listen to our customers complaints and request to update the brand image and improve the rooms.
Travelodge has decided to fight back and restructures the image of the company by spending ? 57 million pounds in refurbishment, which 80% of hotels should be completed by autumn, they are planning to change the room design by updating the colours, curtains, acquiring to of the range beds, updating the bathroom to a state of the art power shower, and repaint and redecorate all of the hotels in the company. 5. Identify, analyse and summarise a problem relating performance management
Identify Travelodge Bournemouth Seafront is currently facing a major problem in performance that is affecting the hotel overall and is that due to a fall in cleanliness of the rooms we are receiving a considerable amount of complains on the daily basics that are affecting the way the customer sees the hotel, due to this issues are WYR is not as target by the company. Analyse Every Travelodge receives at the end of the month a scorecard in which it ill inform the hotel what is expected from us, there are targets sets on how many rooms are sold and how much is sold over the bar, but one of the most important things that we look for in the score card is the WYR (Would you recommend), this are the rating that are customers gives us after they have stay with us. Unfortunately there has been a significant drop in are WYR that is affecting us dramatically. Summary
After investigating and speaking with our customers we have draw to he conclusion that this is due to the poor standard of cleanliness in the hotel, this was due to the manager been promoted to a new hotel and the hotel had to run through a period without manager on site, due to been the period the hotel was all the time fully book resulting on the staff having to work 6 days a weeks or overtime during all the summer period and the housekeeping department did not have the amount of staff that was needed on the daily basics, as a result they had to clean everyday between 12 to 18 rooms plus there were many issues of not having the right equipment to work. To summarise the problem when the new manager took over he had to face with a big challenge, the performance of the hotel and the targets are not been meet. As a company we use a scorecard (figure 1) that helps us measure the performance of the hotel this divides the hotels into different areas and is clear for as to know that areas that we are failing from the scorecard, if we are doing well a green scorecard can be seen and if is moderate performance will be amber and bad performance will be show in red which is what we are facing in the WYR.
Are WYR is specifying that room cleanliness is not what customers are expecting this is a result of the issues seen above but also poor management for the last few months as there is not set of measurements in place in the hotel at that moment to see or compare to what is a good room to what in reality we are offering, we did not have the appropriate budget to buy the materials that we require in the hotel or is not been manage appropriately in order to last the time that is require to last. In overall due to poor management during the last month as the consistent of the hotel cleanliness are not been meet and as there was not a manager to be responsible for the hotel or to set targets, the hotel performance drop. 6. Solution
There are many solutions to resolve this issue the best way possible but it has to be a solution that will benefit the hotel performance and quick and effectively as possible so to improve I come out with a list of effects that can be taking place to start improving the cleanliness of the rooms. The first issue that the manager should so is decentralise the hotel into areas and give different areas for the assistant managers to focus on, for example one to be responsible for food and beverage, one for health and safety and one for housekeeping area, with the manager overlooking all the department and making sure that everything runs smoothly.
The assistant manager or person responsible in the housekeeping department will have to implement the following plan in order to success in the task set firstly is crucial to start by re training the entire housekeeping department in order for then to know what is expected of then and the standards that we need to achieve, secondly an order of products will need to be process in order for housekeeping to have the materials needed to clean the rooms and get the cleanliness up to date, retrain the staff in effectively using the products that they have available without wasting anything, next step will be to make sure that a set of task are in place of the linen porter such as cleaning the public areas and making sure that linen and materials are in hand to be use by housekeeping so they do not waste any time having to find then, extra cleaning activities must be set for housekeeper to carry out then every month that can be from a range of task such a kettle discalers, changing shower curtains, mattress protectors and making sure that all the rooms have all the high level dusted done regularly, to top it all daily room checks will have to be carry out by the managers, housekeepers and staff to make sure that every room that is given to a customer is clean as is expected not only by the customer but also by the company. If all of this issues are been done as instructed there such be a difference in the rooms in a short period of time that will help the WYR that in overall will help not only in getting a green scorecard but will make customers satisfy with their stay and willing to repeat their stay with us.
Is important to notice that to be able to achieve this a considerable amount of money will have to be spend in getting all the cleaning materials that are require in order to turn around the state of the rooms and a lot of time will be needed to retrain all the housekeeping department in achieving the task but all the managers and hotel staff in making sure the correct rooms checks are carry out daily. 7. References Open University (2009) B628, Managing and managing people; OU: Milton Keynes. www. travelodge. co. uk B629 Understanding Marketing and Financial Information EMA Part 2 Activities and outputs (weeks 15-19) Week 15, Activity 1 Table 15. Advice on outsourcing parks and gardens maintenance operations |Problem identification |Outsourcing parks and gardens maintenance in order to be in | | |budget for the next three years | |Analysis (investigation) |The company has the option to either try to outsource or to | | |maintain the team they already have and try to save the money if | | |possible. Analysing what their currently expenses are and what | | |the company is offering then is better to outsource as the | | |company will run why all the extra costs if they are needed such | | |as extra staff, equipment and other materials. |Conclusion to the analysis (results of the investigation) |To conclude is a better idea to contract the maintenance company | | |for 3 years as they will maintain the same price for the three | | |years and the council will be already aware of how much is | | |expending | |The solution, listed as a set of SMART recommendations |It may take time to adapt to the changes to a new company and as | | |a result staff will suffer from downsizing and being transfer but| | |in overall will result in a profitable result for the council | Week 15, Activity 2 Activity 2- Comparison of absorption and marginal costing The major difference between one and another is that the marginal costing will take into consideration all the variable costs that take to get the product which as a result will always vary from the absorption costs as this will only show just the percentage that the person that wants to sell will want to add on MARGINAL COST = |VARIABLE COST DIRECT LABOUR | | |+ | | |DIRECT MATERIAL | | |+ | | |DIRECT EXPENSE | | |+ | | |VARIABLE OVERHEADS | Week 15, Activity 3 Activity 3- 1. Why organisations prepare budgets: To control better the resources they have and make the company profitable 2. Differences between direct and indirect costs? Both costs should be represented in the financial report to make a clear picture of the reality of the financial situation of the company 3. Fixed and variable costs?
Fixed costs are those that will never change and variables can change at any time so is important to present both clearly in the financial reports Week 16, Activity 1 Activity 1 Smallville accounts The differences between creating a income and expenditure account rather that receipts and payments account is that the income and expenditure will explain all that goes on in the business including the loss and profits, will show any outstanding payments from creditors and provides a clear understanding of what is expend and in what areas as how much of the stock is being use. Week 16, Activity 2 Activity 2 Balance sheet for Musical instruments Business Sources ? 000 Resources ? 00 Owners capital 750 Fixed assets 970 Loan 500 Stock 300 Creditors 300 Cash 280 1550 1550 Week 16, Activity 4 Table 16. 2 Advice on maximising reported profit figure |Problem identification |Maximising the report profit figure in order to finish the end of| | |year with a favourable performance | |Analysis (investigation) Robin Williams the owner and chief executive of a catering | | |service business is interested in getting new assesses to his | | |company but in order to do that he needs to provide all the | | |information available to get the financial support he needs, his | | |purpose is to improve the financial report by either postponing | | |or going ahead with a few transactions, The focus of this report | | |is to provide as much support in order to make the correct | | |decision. | | |1. First transaction with is spend ? 50. 00 in advertising which | | |will increase in sales by 20% in the next financial year- Perhaps| | |way is a lot of capital that will be invested and will only | | |result in increase in sales for next year. | | |2. Take out goods for his own use- this has to be postponing as | | |will show a lost in goods and not an increase in income. | | |3. Sell goods in credit- this is a great investment as will show | | |in the financial report still as sales but in account. | | |4.
Replace a motor van that will cost ? 6000, even though this | | |cost will be divided in 6 years it will still show an investment | | |of ? 1000 this financial year | | |5 . Purchase stocks at a lower price- can be done as will show | | |that we have that quantity on assets and has not been a loss to | | |the company. |Conclusion to the analysis (results of the investigation) |To conclude I think that by investing in purchasing goods for a | | |lower price, sell to a customer in credit will help his financial| | |report as even though he will losses in stock he will gain the | | |sales in credit and even though he will lose the capital that we | | |will use to buy stock, will increase his stock | |The solution, listed as a set of SMART recommendations |By making this changes and at the beginning of the financial | | |year invest in advertisement which will help him sell the stock | | |purchase at discount and buy a new van will provide him with a | | |very profitable end of year report and a target for beginning of | | |next financial year. | Week 17, Activity 1 1. Companies hold some assets in form of cash to be able to pay for the expenses they are incurred in the hotel, for example to pay for suppliers, pay bills and other expenses 2. Holding too much cash in a business can be risky as it is not providing with any investment either in the bank or as stock for the business. 3. The costs of having too little stock is not making the business look very profitable and there is the risk that when stock is needed there is not any cash available to purchase what is needed for the business Week 17, Activity 3 Table 17. Solution to a working capital problem in my organisation |Problem identification |Working capital stock taking too long to be deliver | |Analysis (investigation) |Due to the policy that we have to order food products to be | | |deliver next day, confirmer delivery and process payment which | | |takes 30 days to be pay to the company, there are major problems | | |with the items that are not being deliver to the hotels as it is | | |taking too long for the company to get the payment and realise | | |which item has not been deliver | |Conclusion to the analysis (results of the investigation) |To conclude is crucial that a way is set in which the company is | | |aware of any item that has not been deliver in order to speed up | | |the process of redelivery | |The solution, listed as a set of SMART recommendations |Both companies must agree in the desire idea to resolve the | | |problem which is time consuming | |Strengths and weaknesses of the recommendations |Time consuming, staff needs to be re train which will be cost | | |effectively | Week 18, Activity 3 Financial performance For the hotel that I work for, is required a set of financial reports on the daily basics to be able to get the banking done. These reports consist on the daily trial banking which will explain in detail how much was taking on the daily basics on the different method of payments from example how much was taking in cash, visa, MasterCard, American express and also how much was taking as a prepay before the guest arrive in the hotel.
The other report that we use and is very important for us is the credit cards reports as we need to compare the credit cards against what is showing in the pdq slips reports that are printed 3 times at day at the end of any shift, this will conform that staff is taking the corrected amount of money and reporting it on the system that we use. Third set of reports that are use are the guest on house which explains to use how many guest are in house, which room number are the staying, rate pay and any extra packages, the vacant and occupy rooms which are the reports use in case of a fire and to conclude the arrival list with a list of the guest arriving, rate pay and any packages or special requested. Week 19, Activity 2 |Problem identification |Advice MD about ways in which he can restructure Spellman in | | |order to improve performance. |Analysis (investigation) |Currently Spellman is a very profitable company that focus on | | |buying and selling machinery for ice cream manufactures and also | | |is focusing in providing repairs to their machinery. | | |The problem that they are facing is that there is one person in | | |charge of making all the decisions and coming out with all the | | |solutions, resulting in problems within the company as there is | | |de motivation, lack of product information and other issues. | |The best propose idea to resolve this problem is for the MD to | | |hire a group of managers that will focus in different areas of | | |the country, in order for every employee to have a manager to | | |respond to and get support, and this managers to have the | | |responsibility of making decisions and solving problems, in order| | |to improve the slow decision problem that the company face before| | |and provide the support needed. |Conclusion to the analysis (results of the investigation) |By having this group of managers available the MD will have more | | |time to focus in improving the business and will have to focus on| | |dealing with this groups of managers rather that all the company. | |The solution, listed as a set of SMART recommendations |Is important to understand that this is a time consuming activity| | |that will require and investment to hire this managers and the | | |time to hire and train the correct staff, and will take time to | | |get the managers train correctly and aware of the business. | | | | |But this will result in staff motivation restore and customers | | |will get the support and solutions quicker. | Week 19, Activity 3 The critical success factors and key performance indicators for airline scorecard The balance scorecard is a strategic planning and management system that focus on the current business activities and compares this to the vision of strategic of the organisation, and it focus in looking at four different perspectives of the business and see how they are performing , this are the financial perspective, customer perspective, internal business process and learning and innovating.
Focusing in Ryanair a low cost airline which operates with over 300 airlines with over 30 destinations, their strategic focus in having the low cost in the market and their entire major decisions and focus on this making this their success factor. In order to achieve this they had to take into consideration what do they customers expected for them as a company, which are a cheap, straight forward flight, as they are not expected to get any luxuries in their flights, another key performance indicators apart for their customers’ expectations, is the financial perspective which focus in making sure they are still been profitable, this is achieve by Ryanair by always cutting the luxuries and making sure everything is to their basics.
For example charging customers for extra luggage, making sure they print their own boarding pass or pay the penalty which is up to ? 60, offering services such as seat selection and priority boarding for an extra charge, these techniques helps the company reduce costs and increase profits. Focusing in the internal business perspective this can be providing customer support when any issues arise and making sure that their flights are meeting their schedules and as innovation perspective Ryanair is very clever with this as they innovate by finding new routes for their customers and competitive prices in order to maintain market position. Week 19, Activity 4
Hospital cancer unit performance indicators of each of the E’s Economy: One performance issues that I’m sure must be important is to maintain cost to certain quantity when referring to getting new beds or material because the other ones are too old, this affects the patient comfort and the staff will have to deal with this resources that can be unsafe to use due to no having a reasonable budget, another one is no having the resources to innovate the drugs, no enough financial support to investigate and get new drugs that can help their patients. Efficiency: Referring to using the minimum amount of resources specially when referring to drugs can affect the patient health and the time of recovery, also no having the laboratory services available due to maintain the performance measurement can affect the quantity of patients treated and the staff motivation.
Effectiveness: No having the time or resources due to maintain the performance can affect the health of any patient, in the other hand no having the resources to hire and train staff that can deal and provide this treatment is very concerning Equity: Proving access to everyone is crucial, due to the lack of resources and staff this is not always possible and this affects many life’s, is crucial to provide the treatment as soon as possible and often as needed to the patients to be able to save as many as possible. Personally I believe that a performance indicator in a hospital should not be the amount of money spend in treatment, in drugs, in innovating new treatments, training staff or proving comfortable atmosphere to their patients but the amount of life’s save.