ABSTRACT
This study examined the evaluation of the marketing strategies used in hospitality establishments in south-East Nigeria. Specifically the work identified the marketing strategies used in hospitality establishment/industry, ascertain the application of identified marketing strategies in the hospitality establishments, examine the influence of applied marketing strategies on the level of patronage in the hospitality establishments, the influence of applied marketing strategies on profit margin of hospitality establishments, the influence of applied marketing strategies on the sustainability of hospitality establishments in study area and to determine the way forward. To achieve the objectives of the study survey research design was adopted. The study was guided by six research questions and three hypothesis. The study adopted primary data through the use of structured questionnaire. The population of this study is 4539 principal staff drawn from 965 registered hotels in south east Nigeria. The sample size of 367 was determined using statistical formula derived by Yamane (1964). Stratified sampling technique was adopted in this study. The hotels were group into strata. This involved grouping the hotels into star rating (1 star, 2star, 3star, 4star and 5star). However, the allocation of questionnaire is based on proportion of the population which involves 34.5%, 34.87%, 23.5%, 5.2% and 2% for 1 star, 2star, 3star, 4star and 5star respectively. Therefore, the sample size is (367 staff) 127, 128, 86, 19 and 7 for 1star, 2star, 3star, 4star and 5star respectively. Frequencies, percentages and mean was used to analyze the research questions while multiple regression analysis was used to test the hypotheses. The study revealed that social media, advertising, customer relationship management, quality product/service, availability of sales promotion, price discount, location public relation and maintenance are the major marketing strategies used in hospitality establishments. The findings also revealed that marketing strategies have significant influence on the level of patronage, profit margin and sustainability in the hospitality establishments. The study recommends that Hospitality establishments should endeavour to employ the use of marketing strategies to enhance better performance and good competitive advantage. Hospitality establishments should concentrate more of their resources on the four basic variables identified to have contributed most to their performance which are, price, promotion, place/location, quality of product/service and maintenance.
TABLE OF CONTENTS
Title page
i
Approval
ii
Certification
iii
Dedication
iv
Acknowledgement
v
Table of
contents
vi
List of
table
xi
Abstract
xii
CHAPTER 1 : INTRODUCTION
1.1 Background to the Study 1
1.2
Statement of the Problem 6
1.3
Objectives of the Study 8
1.4 Research Questions 8
1.5 Research Hypotheses 9
1.6 Significance of the
Study 9
1.7.
Scope of the Study 10
CHAPTER 2 : LITERATURE REVIEW
2.1
Conceptual Literature 12
2.1.1
Hospitality industry 12
2.1.2
Tourism 14
2.1.3 Hotel 15
2.1.4
Origin of Hotel industry 16
2.1.3
Types of Hotel 17
2.1.4
Classification of Hotels 19
2.1.4.1
Diamond rating system 20
2.1.4.2
Star rating system 21
2.1.5
Marketing 22
2.1.5.1
Marketing in Hotel industry 23
2.1.5.2 Role of marketing in Hotel business 25
2.1.5.3
Hotel marketing mix 26
2.1.6
Marketing mix strategies 31
2.1.6.1
Product strategy 32
2.1.6.2
Price strategy 33
2.1.6.3
Place strategy 34
2.1.6.4
Promotion strategy 35
2.1.6.5
People strategy 36
2.1.6.6
Process strategy 38
2.1.6.7
Physical evidence strategy 39
2.1.7
Seven Ps and consumer goods marketing 41
2.1.9 Customer patronage
in Hotel industry 44
2.1.9.1
Challenges facing customer patronage in Hotel industry 46
2.1.10
Product strategy and profitability 50
2.1.11
Impact of promotion activities on customer patronage 52
2.1.11.1 Marketing communication mix 53
2.1.12 Physical evidence and
business growth 66
2.1.13 Pricing
strategy and organizational performance 69
2.1.14 Pricing and the sales
force 70
2.1.14.1 Sales force
management 71
2.1.14.2 Price
variation and price promotion 71
2.1.15
Segmentation of the Hotel market 72
2.1.16
Market positioning of Hotel services 76
2.1.17
Digital marketing in hotel industry 76
2.1.17.1
Digital marketing communication channels 77
2.1.17.2
Email marketing 77
2.1.17.3
Viral marketing 77
2.1.17.4
Word-of-mouth 77
2.2 Theoretical
Literature 77
2.2.1 Communication Theory (Hamman, 1979). 77
2.2.2
Kano theory (Kano, 1980). 79
2.2.3 Schumpeterian theory of
innovation (Schumpeter, 1949) 79
2.3
Empirical
Review 82
2.4 Summary of Literature
Review 85
CHAPTER 3 : RESEARCH METHODOLOGY
3.1
Research Design 87
3.2 Area of the Study 87
3.3
Population of the Study 88
Table
3.1: Hotel population distribution table 88
3.4
Sampling and sampling technique 88
3.4.1
Sample size determination 88
3.5
Instrument for data collection 89
3.5.1
Validity of the instrument 89
3.5.2
Reliability of the instrument 89
3.6
Method of data collection 90
3.6.1
Questionnaire 90
3.6.2
Personal interview 90
3.7
Description of instruments 90
3.8
Statistical techniques for data analysis 91
3.8.1
Regression model 91
CHAPTER 4 : DATA PRESENTATION AND ANALYSIS
4.1 Data presentation 112
4.2
Test of hypotheses 113
4.2.2:
Research hypothesis two 115
4.2.3.
Research hypothesis three 117
4.3
Discussion of findings 120
CHAPTER 5 :
SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 Summary 124
5.1.1 Restatement of the problem 125
5.1.2
Major findings 127
5.1.3
Description of methods used 128
5.2
Conclusion 128
5.3.
Recommendations 129
5.4
Contribution to knowledge 129
5.5 Suggestion
for further studies 130
REFERENCES
131
APPENDICES
139
TABLES
LIST OF
TABLES PAGES
4.1: Distribution
of questionnaire and response rate 92
4.2: Socioeconomic Characteristics of staff of
the selected Hotels in five south
east states 93
4.3: Mean responses on the marketing strategies
used in hospitality
establishment/industry. 96
4.4 Mean
response on the level of the application of identified
marketing
strategies in the hospitality establishments in the study area 99
4.5 Means
response on the influence of applied marketing strategies on
customer
patronage in hospitality establishments 102
4.6 Mean response on the influence of applied
marketing strategies on profit
margin of hospitality establishments 105
4.7: Mean response on the influence of applied
marketing strategies on the
sustainability of
hospitality establishments 107
4.8 Mean
response on the factors affecting the application marketing strategies
in the
hospitality establishments 109
4.9 Mean
response on remedies to the factors affecting the application
marketing
strategies in the hospitality establishments 111
LIST OF FIGURES
Fig.
2.1: The Four P’s of the marketing mix 27
Fig.
2.2 The 7P’s of the marketing mix 28
Fig. 4.1: Distribution of questionnaire and response
rate 93
Fig.
4.2: Distribution of respondents based on Age 94
Fig. 4.3: Distribution of respondents based on
Gender 94
Fig. 4.4: Distribution of respondents based on
marital status 95
Fig. 4.5: Distribution of respondents based on
Academic Qualification 95
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE
STUDY
Marketing
strategies have helped in sustaining and developing many hospitality industries
even in the face of economic hardship.
Hospitality
is defined as a specific type of relationship between a host and a guest
(Aranga, 2014). Most of the hospitality services are provided in hotels,
restaurants, bars, and related hospitality establishments. Today, the Nigerian
tourism industry has recorded significant growth due to the National
government’s plan of promoting tourism (Baker, 2012). Consequently, there has
been an increase in tourist arrivals to Nigeria for business and other tourism
related activities. The travelers visit tourist centers and most of them lodge
in hotels throughout the period of their stay. This has helped in the advancement
of tourism and hospitality industries in Nigeria. The hospitality industry creates
a lot of employment all over the world, directly as well as indirectly guides
and escorts, dealers and sellers of local handicrafts. It also brings a lot of treasured foreign
exchange, as people who travel to other countries spend money on accommodation,
transport, shopping, exploration etc (Brody, 2009). The hotel industry being a
vital part of the wider hospitality industry occupies an important place in the
economy of most countries, the industry was forecast to generate 555 billion
U.S dollars in revenue in 2016 (Smith, 2010).
This projection was achieved through effective marketing strategies.
Marketing approach is a reaction that takes place
between the forces in both the peripheral and core environment thereby making
the organization to determine its position in the target market, (Hult, &
Olson, 2011). Marketing strategies in a business, act as key to business growth
and customer satisfaction in terms of achievement made by the organization
(Ayele, 2012). The environmental forces which affect the business in attaining
its objective require to be identified in advance and handled well to enable
the business meet its vision and mission. Strategies of organizations enable
evaluation of the long and short term goals thus making it possible to achieve
the objectives in specified period. A business or firm should have a unique
strategy for effective competitiveness, growth and profitability.
It is pertinent to note that organization or firm
should be in position to establish a marketing framework for easier
accessibility of frequently updated websites, announcements, sales
presentations, and all other promotional materials. The frequent updates enable
the organization to quickly and easily develop in different departments which
makes it expand and move internationally. Marketing context is very essential
to the business segment as it facilitates continuous flow of business data
periodically (Wason, Polonsky & Hyman, 2002).
Marketing approach is a technique of guiding an
organization's energies and resources on a course of action which can lead to
increased sales and supremacy of a directed market niche (Ayele, 2012). A
marketing approach conglomerates product advancement, promotion, distribution,
pricing, relationship management and other elements (Hose, 2011). These approaches
identify the firm’s marketing objectives, and explain how they will be
achieved, ideally within a stated timeframe. Marketing approach determines the
choice of target market segments, positioning, marketing mix, and apportionment
of means. Through the above mentioned points the performance of such hotel will
be ascertained.
Performance
is the concrete output or results of an institute as measured against its
intended yields (or goals and objectives). Organizational performance is the
final achievement of an establishment which is measured either in financial and
non-financial gages, and contains a number of parameters, such as the targets
achieved over a period of time, efficiency and effectiveness (Gibson, Rosen and
Stucker, 2010). Organizational
performance can also be used to view how an establishment is doing in terms of
level of turnover, market share and product value in relation to other establishments
in similar industry.
According
to Gibson and Gilligan (2009) organizational performance incorporates three precise
areas of the firm outcomes which are financial performance (returns, return on
assets, return on investment, etc.), product market performance (sales, market
share, etc.), and stakeholder return (total shareholder return, economic value
added, etc.). Performance measurement is described as a course of
organizational processes and applications intended to augment the execution of
business approach (Palmer, 2011).
According to Achumba (2002),
application of marketing strategies gives room to marketing performance. There
are intellectual views in the assessment of marketing performance. Palmer,
(2011), suggests that marketing performance is the achievement of financial and
operational business goals. Marketing performance aids to decide the status of
an establishment as compared to its competitors.
Several meters can be used
to determine the performance status of a firm. In his work, Palmer (2011)
argued that the current marketing performance is operationalized by 12 points remarkably,
sales growth, customer loyalty, return on investment (ROI), market share,
getting important and valued data, capability to acquire better terms in loan, capacity
to acquire governmental endorsement, shorten the time for governmental endorsement,
contact with significant persons, capability to secure local resources
(electricity, human resources) and lastly inspiring staffs among others. All
these performance indices cannot be achieved effectively without the
application of marketing strategies (Achumba, 2002).
The importance of
the hotel establishments in Nigeria cannot go unnoticed, it does not only contribute
greatly to the gross domestic product, it also creates numerous job
opportunities. Hotels are categorized as the Nigeria Tourism Development
Corporation decree 81 of 1992 hotel registration, grading and classification using
star ratings. There is no standardized way for rating hotels, but the most
common system uses stars, ranging from one to five star hotels. Star ratings
are ways of classifying hotels based on standard upheld, and amenities that are
available (Whetton, 2011).
Most hotels have
failed in the part of application of marketing strategies. In 2015, it was
estimated that hotel services already accounted for 72% of the gross domestic
product (GDP) of developed economies, and 52% of the GDP of developing
economies (Osuagwu, 2016). The hospitality industry was expected to grow by
6.2% and the tourism industry by 4.1% in 2007 across the globe (Economist Intelligence Unit, 2015). The
hospitality organization has grown remarkably since 2001 and has been compelled
by leisure and business demand. However, though many subdivisions of Nigeria economy
recorded positive growths of varying degrees in the 1st quarter of 2015, the
hotels and restaurant sector growth still remained unchanged (Osuagwu, 2016).
This was majorly attributed to low hotel room occupancy rates arising from
insecurity concerns by international visitors. These concerns have led to a
decline of about 30% in tourist arrivals across the globe in first quarter of 2015
compared to in first quarter of 2014 thus raising the need for evaluation of
the performance of this sector (Osuagwu, 2016).
All organizations, hotels
included, require marketing approaches to succeed and remain viable in their
industries. Considering the dynamics nature of the hospitality business,
various hotels ought to review their marketing approaches quite often to survive
with the varying needs in the market and also remain ahead of rivalry (Kotler,
2000). To reach a viable competitive edge, an organization needs to recognize
its foremost strength and place itself in such a manner that is above rivalry
in that sector (Johnson, Scholes & Whittington, 2008). In order to form a
distinct reasonable advantage over rivals, a firm must select right combination
of target markets and marketing mix. Hotels persistently seek new ways to obtain,
hold and increase business, because the cost of losing clients is rising
(Zeithaml, 1993). Service is an imperative factor in retaining clients. The
role of service is more vital than ever, and is expected to become even more life-threatening
with time (Choi & Chu, 2001). Hotels that have the capacity to attract,
satisfy and thus hold customers are more likely to persist than hotels that do
not do so. Successful customer retention allows hotel to build relationships
with their customers.
It is
very difficult for a business organization to survive and stay viable in a
dynamic market without injecting various marketing strategies into its
operations. The performance of hospitality in Nigeria has been seen to
deteriorate in the past few years as evidenced by a number of them having to
even close down (Najib, Neely, Mills, Platts, Richards, Gregory, Bourne &
Kennerley, 2016). This increases much apprehension because tourism contributes fundamentally
to Nigeria economy and if the hotels hosting these tourists do not perform well
as expected, the contribution of tourism to GDP ultimately gets affected.
Particularly, the recent insecurities experienced in Nigeria have reduced the
performance of the hotels to the worst, though measures to improve the security
in the hospitality establishment have been put in place (Najib, et al, 2016). This accounted greatly to undefined
circumstances that had been fashioned by the insecurities, leading to travel
advisories being put across in the year 2015 that led to travel termination of
most of the travelers from other countries (Najib, et al, 2016). Hence hotel executives have been required to come up
with new approaches to ensure booming of their hotels. It is against this framework
that this study intends to examine the application of the various marketing
strategies in hospitality industry in South-East Nigeria.
1.2 Statement of the problem
All establishments,
regardless of their scope, are environment dependent hence as the peripheral
environment changes, establishments find themselves in unacquainted environment
and have to respond by incorporating changes and internalizing their ability to
acclimate to the new environment for existence and development. However,
organizations should struggle for continuous growth while keeping the aim of
increasing or simply maintaining their sales and profit levels to ensure their
survival.
Study by Hult & Olson (2011), has shown that most
hotels centers in Nigeria do not take the application of marketing strategies
serious (Hult & Olson, 2011). Most of the hotels and tourism centers do not
even have marketing experts that guides the application of marketing
strategies. As an outcome of this, there is a decrease in the growth of
hospitality industry and tourism centers in Nigeria (Osuagwu, 2016).
Service Sector makes substantial contribution to
Nigeria GDP; about 53.3% as per 2013 Global finance report (Duncan, 2002). In recent
past there have been a significant drop in the performance of this sector
(Mannukka, 2006). Some of the reasons behind significant drop in performance
include: Weak marketing approaches implemented by different hotel chains and
high level of insecurity in the country majorly caused by terror attacks.
Hotels in Nigeria operate in a dynamic commercial environment characterized by
intense competition for resources and market share hence have become more
challenging to manage and sustain their growth rate. These tasks include rivalry
for resources, trained labour and market share, socio-cultural variations,
technological changes, economic tasks, changes in customers’ expectation and
preferences and insecurity due to terrorism. The dynamism of this environment
calls for appropriate growth strategies that will enhance the performance of
hospitality industry (Duncan, 2002).
In 2011, there
have been a drastic drop in tourist arrivals in Nigeria. This has resulted to
poor performance because the hotels mainly rely on both local and international
tourists as their main clientele (Ayele, 2012). The major problem affecting
hotels in Nigeria is lack of application of marketing strategies (Berry, 2013).
Most hotels in Nigeria do not adopt marketing strategy, they that believe
marketing strategy is for manufacturing companies as such it is not important
in hotels (Duncan, 2002). This has affected the growth and survival of hotels
and hospitality industry in Nigeria. For this reason, most hotels perform well
during their first five years of commencement and eventually decline gradually
(Berg, 2001). None application and allocation of marketing strategies in
Nigeria hospitality and tourism industry has resulted to low customer
patronage, decrease in sales volume, low profitability and lack of growth
(Berg, 2001). According to Osuagwu (2016), most hotels have failed after few
years of operation for not applying the necessary marketing strategies that are
meant to be applied in the hospitality industry.
Though various
studies have been conducted in the hospitality industry, there is limited
theories that explains the impact the marketing strategies have on the
performance of an organizations. There have been a good number of studies on
marketing strategies and organizational performance in Nigeria but these
studies merely focused on hotels instead they focused on other business firms. Few
works that were carried out using hotels, focused mainly on South- South and
South-West. There is little or no research work on the evaluation of marketing
strategies used in hotels in South- East Nigeria, and that is the gap this
study intends to fill.
1.3
Objectives of the study
The main objective of the study was to evaluate the marketing
strategies used in hospitality establishments in south-East Nigeria. Specifically
the work:
1.
identified the marketing strategies used in hospitality
establishment/industry.
2.
ascertained the application of the identified marketing
strategies in the hospitality establishments in the study area.
3.
examined the influence of applied marketing strategies on the
level of patronage in the hospitality establishments in study area.
4.
determined the influence of applied marketing strategies on
profit margin of hospitality establishments in study area
5.
examined the influence of applied marketing strategies on the
sustainability of hospitality establishments in study area.
6.
identified the factors affecting the application of marketing
strategies in hospitality establishments.
7.
determined the way forward.
1.4 Research questions
The following
questions guided the study
1.
What are the marketing strategies used in hospitality
establishment/industry?
2.
To what extent are the identified marketing strategies applied
in the hospitality establishments in the study area?
3.
What is the influence of applied marketing strategies on the
level of patronage in the hospitality establishments in study area?
4.
What is the influence of applied marketing strategies on
profit margin of hospitality establishments in study area?
5.
What is the influence of applied marketing strategies on the
sustainability of hospitality establishments in study area?
6.
What are the factors affecting the application of marketing
strategies in hospitality establishments?
7.
What is the way forward?
1.5 Research hypotheses
For the purpose
of the study, the following hypotheses were tested at 0.05 level of
significance.
H01: Applied marketing
strategies have no significant influence on the level of patronage in the
hospitality establishments.
H02: Applied
marketing strategies have no significant influence on profit margin of
hospitality establishments
H03: Applied
marketing strategies have no significant influence on the sustainability of
hospitality establishments in study area.
1.6 Significance of the study
The findings of this study will
be significant to the following group of people; hotels management, customers,
marketers and researchers.
The goal of every business
is to make profit and this can be achieved through the application of marketing
strategies. The study will help hotel industries and other business entities to
understand the need to adopt and implement effective marketing strategies for
increase in the performance of hotels in Nigeria. In other words, the findings
of this study will help hotels to know the proper marketing strategies to be
adopted in order to increase their customer base.
The findings of this study will be
significant to customers. Attracting customers and retaining existing customers
as well as sustainability is the major tool for business growth. In other
words, every business including hotels should work towards increasing their
customer base. The study will enable customers to know those strategies that
can induce them to patronize a product or service.
The outcome of this study will help marketers
to identify the various marketing strategies that increase sales volume,
profitability and customer patronage. The findings of this study will also help
marketers to identify the challenges affecting the application of various marketing
strategies in the hotels.
This study will also help to build
on the body of the existing literature and knowledge. This will help to provide
references for future researchers by enabling them carry out research with ease
since this study will provide secondary data to the up-coming researchers in
this area.
1.7. Scope of the study
1. Geographical Scope: The
study concentrated on hotels located in the South-East Nigeria, namely; Imo,
Abia, Enugu, Ebonyi and Anambra States.
2. Content scope: The study
was directed at the application of the marketing strategies being applied in
the hotels under reference.
3. Unit Scope: The top management,
senior management, middle management and intermediate level management as well
as staff of the hotels were sampled to elicit their perspective on the
application of marketing strategies in their hotels. What strategies? Mode of
application? Outcome of application.
Login To Comment