Free Custom «Hospitality Industry» Essay Paper

INTRODUCTION

Hospitality industry is a fast growing industry. Kempinski is the oldest hotel company in the world. The company’s root is in Germany it was established in 1987.Kempinski Hotels are well known hotels and resorts which currently run business  in 30 countries, 60 cities with 62 properties . The company is planning to add 10 more this year. The company is not targeting the U.S. Market. The company’s aim is to create value and add value in everything that the company does. According to the company the final customers should be ready to pay 40% more to Kempinski hotels than the other luxury hotels. The company is nowadays in a re-branding process in order to create the unique Kempinski brand for a top of mind signature and sustained growth. In this sense the re-branding and the growth of the company should be revisionary in every area in order to prevent brand dilution. One of the important areas which need to be revised in re-branding actions is the sales department. Most of hotel clients nowadays are linked to the hotel trough internet booking cites travel agencies or big organizations which create profit for the hotel companies. The sales people of the hotel chain are mostly interacted with them and their reflection can be considered as a very important issue for the essential sales and future success of the chain. In this sense it is important to measure the efficiency of sales people in order to develop the sales. This paper aims to determine the perceptions of the Kempinski clients about the sales people.

 

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 LITERATURE

Previous literature determines that the customer service is directly linked to the bottom line of the businesses. In this sense customer service is important for business survival in the changing business environment. Quality customer service and support creates contribution to customer satisfaction. This action contributes also customer loyalty (Schoenbachler,  et al., 2004). According to Dickson and Huyton (2007:2) “it is generally less expensive to retain existing customers than it is to gain new customers”. Accordingly it can be said that investigation of the sales persons’ can be beneficiary for Kempinski hotels and Resorts in order to retain the customers and create better relations with them. On the other hand the companies should consider how those services develop and how sales people can be more efficient.  Especially in hospitality industry departments training is very important industry managers give importance to training In order to keep the customers in hand. According to Kline S. and Harris K. (2008:1) managers shouldn’t expect accountability from employee trainings. Trainings should not be considered as an investment for the consideration of ROI (Return on investment). With the development of internet the pricing and distribution of hotels’ products has changed In middle 1990’s online travel agencies /online intermediaries made partnership agreements with hotels and airlines to negotiate the customers to airways for tickets and hotels for rooms (Gazzolli et al., 2008). The online intermediaries have reached successful results in a short period by using efficient strategies for sales. Easiness of comparing products and prices through such intermediaries brought success in a short period (ibid.). According to Gazzolli et al. (2008:2) “ One of the main reasons for these e- intermediaries’ success was their ability to provide cheaper room rates than the ones offered by the hotel brands websites or their reservation offices”.  These cheap room rates affected customers purchasing decisions and behavior directly and raised the online purchasing rates (ibid.).  Accordingly hotels decided to set consistent rates in order to not to lose trust of customers which can be caused by confusion of experiencing different prices in different websites (ibid.).  As Law R. and Bai B. (2008:3) refers to the prediction of McGann(2004) “The amount of US online travel booking revenues in 2009 would reach US$91 billion and this represents 33 percent of booking revenues, up from US$46 billion and 20 percent in 2003”. Also referring to Kerner (2005) the authors state that “online accommodation sales increased 52 percent in 2005”. Within consideration of these statements it is important to understand that the sales structures of hotels changed in the last decade and adding value to conventional sales become more complex than before. The competitiveness rose with; globalization, global economic factors and political factors (Verdugo,  et al., 2009). According to Verdugo,  et al. (2009:1) “In highly competitive sectors, quality relationships are considered a key element of business differentiation through which firms pursue customer commitment through satisfaction, loyalty or positive word-of-mouth (WoM)”. The authors also refer  to (berry, 1983;Grönroos,1991;Gummensson, 1987) by mentioning that the relationship marketing is a hard  marketing style if it provides tangibility. Hotel industry can be considered as a high competitive industry the costs in the industry are in a rise and it is hard for the hotel companies to create differentiation and development in services. On the other hand this rise in costs can reflect positively the profitability if the margins are considered ( Verdugo,  et al., 2009). According to Verdugo,  et al. (2009:2) “Customer retention is founded on the quality of the relationship established with them, which in turn, is based on the customers’ evaluations and perceptions about their personal communication with the employees and how the latter behave”. Also the authors mention that sustainable competitive advantage is possible with relationship marketing strategies because of having less imitation risk by competitors (ibid.) Therefore it can be said that the quality of service is one of the facts that can increase competitiveness as long as the service given satisfies the ideal preferences of the customer (ibid.).  According to Verdugo, et al. (2009:2) “Relationship marketing in hotel industry consists of a set of marketing activities designed to attract, maintain and improve relationships with customers for mutual benefit. Customer retention plays an important role in this strategy”. By achieving the customer retention it is important to consider trust and create trust between the customer and service provider. The image of the brand can be affected by the behavior of the service provider. It is important to understand that high interaction businesses such as hospitality industry it is important to build good relations with customers (ibid.). Accordingly it can be said that it is important to build good relations and get feedback from customers as much as possible to improve the relations and create loyalty. Also it can be said that it is a kind of maintenance which has a favorable impact on the customers mind for creating a high quality image (ibid.).  In other words it is important to consider customers psychology. Especially for sales, psychological influences must be taken under research as marketing and sales are strongly related to consumer behavior. Measuring the customer satisfaction and accordingly implement changes in the negative reflection is also important to develop good relations. The coordination of marketing and sales from the supplier’s side can manage customer relationships (Borders, 2006). For managing accountable customer relationships the sales department collects; customer information, company information and competitor information. It is important for development of sales to collect exclusive information (ibid.). According to Borders (2006:1) “More and more routine orders come in to suppliers’ organizations from the internet, which provokes the need for crucial coordination of the marketing and sales efforts.” In today’s business environment customers demand; high quality products, short lead times, increased flexibility in delivery, satisfactory technical advice, efficient innovation, and high collaboration (ibid.).  Also as firms get into the global market they start to operate in a global context, as much as firms adapt working globally serving   all over the world to the demanding markets is needed to be done strategically.  Regarding this issue for sales and marketing activities should be customer oriented.  It is important to give importance to customer relationship management. Using Customer relationship management allows companies to develop strategies and programs to optimize and personalize the relationship between customers and suppliers (ibid.).  The quality of the product or service which is delivered to the customer can be determined by the customer satisfaction (Pizama and Ellis, 1999). Customer satisfaction is necessary for the survival of the company. Satisfaction level also affects the future business with the customers. Accordingly dissatisfied customers will search for subsidiary brands to satisfy their needs (Pizama and Ellis,1999). In other words satisfaction can be described as a costless promotion (ibid.). According to Pizama (1999:1) “ There are several ways to assess the quality of services and customer satisfaction through subjective, or soft, measures of quality, which focus on perceptions and attitudes  of the customer rather than more concrete objective criteria”. The author describes the soft measures as questionnaires and surveys which are relevant for determining customer behaviors and perceptions of the quality delivered to them.  For the company’s success it is important to measure the satisfaction level. For the measurement the “Customer Measurement Program” should be implemented to the company’s corporate culture (ibid.). Customer value differs according to the business size and profitability (Borders, 2006). In the light of this information some “customer oriented” corporations segment their target customers and focus on the valuable targets needs and wants in order to deliver a better service or product (Pizama and Ellis,1999). A “consumer oriented” corporate firm makes constantly feedback actions by using customer satisfaction measurements Instead of waiting for the customer criticisms for a wrong delivery or unsatisfactory good or service (ibid.). First of all It is important for firms to set goals correctly by being aware of the organizations customer satisfaction level in order to improve it. Secondly in order to achieve the goal the organizations should do the necessary reflections and actions to optimize the satisfaction level by giving importance to the obtained data (ibid.) Also the authors give another perspective by giving a contrast mentioning that the customer satisfaction is not directly linked to the organizational performance and economic success. Before the purchasing of the goods and there is usually an expectation about the product or service in the consumers mind. If the delivery of the product and service is less than the customers expectation rejection occurs.  Satisfaction is the confirmation of the delivered good or service in customers mind (ibid.).  Pizama and Ellis (1999:3) describe the satisfaction dimensions as; Reliability, Responsiveness, Assurance, Empathy and tangibles. Measuring the level of customer satisfaction can be used for different aims in different organizations.  The authors mention five objectives of measuring (1999:8); first one is to learn the important facts for the customers’ decision making and evaluate performance. Second one is measuring the development  and evaluation continuously, third one is acting according to customers’ needs for innovation, fourth is measuring the Strengths and weaknesses in order to set competitive choices, and the fifth and final objective is to link the measured customer satisfaction into the business. Some Companies do not measure customer satisfaction the reason of that can be described as the problem of communication with customers, difficulty of data collection and especially in some cases it gives the customer to think twice and criticize the company which can be a reason for creating an unsatisfied environment (Piercy, 1996). Regarding this issue the trust created between the customer and the company must be considered and the data collection should be well organized to avert misunderstandings. In this sense for measuring the satisfaction in a good way companies can also use psychological contracts in buyer-supplier relationships to get feedback ( Pecotich and Kingshott, 2007). For analyzing the feedback retrieved from customers the sample size matters. If the sample size is considered to be small the company can benefit of the qualitative data. If quantitative assessments are used in a combination with the qualitative perspective it is considered as a more beneficiary outcome for analyzing the customer and enabling the “customer-focused benchmarking” (Salzberger and Koller, 2009:2). Customer feedback has always a positive outcome for innovations in the service industry (ibid.). The intangibility and characteristics of the service products have a reasonable impact on the purchasing behavior of the customer (ibid.). Tourism sector is a importantly grooving sector and contributes the national economy (ibid.). In this sense benchmarking and development is a important fact. As the hotels major customers are sales agencies it is important to measure their satisfaction level in order to develop sales relations and activities and to get positive feedback from clients. Sales people within the organization should be involved with strict criteria’s.Regarding this issue talent management needs to be implemented successfully in employee recruitment,  retention, engagement of the organizations (Hughes and Rog 2008). Organizations can gain competitive advantage by using successful HRM strategies and implementing talent management successfully in order to optimize; employee engagement, employee retention rates and operational financial performance (Hughes and Rog 2008). Talent management can be described as the process of sourcing, optimizing and supporting employee talent. Hughes and Rog (2008:2) argue that supporting talented employees which can create difference with their efficiency can increase the firm’s profitability and performance. It is also important for companies to optimize the existing employees by training them (ibid.). The concept of employee empowerment constantly gains importance. Based on management literature employee empowerment is defined as giving the authority of decision making in a decentralized way in order to simultaneously motivate employees and rise performance (Klidas,2007). Also the author (2007:2) suggests that “Empowerment has been widely seen as the missing piece in the puzzle formed by growing global competition, organizational restructuring, and the increasing importance of service quality and customer satisfaction” . To implement the employee empowerment facts as “training, reward practices, organizational culture and management style” are important to consider (ibid.). Finally considering that profitability has an effect on all fields of the company it is very important to investigate sales activities and sales people’s performance by considering the customer perspective and satisfaction. With the collected feedback companies can optimize their training systems and develop their sales activities by being customer centric for important customers.