The hospitality simulation established the issues that management must address regarding product differentiation and positioning, which are essential components of the 4 P’s of marketing. Product positioning is critical to success in hospitality as the level and quality of service in hospitality is the defining aspect of whether the business is successful against peers. The various market conditions covered in the simulation are only a snapshot of the management of variable and fixed components of business management. Profitability in hospitality is often a seasonal variation which reflects unusual activity either in the summer months or the winter months.
The simulation runs through various management scenarios that require management input. In the simulation, the marketing and financial management portion of the business is pronounced as the most critical aspect to yield success in hospitality. The product differentiation is often in services provided and amenities offered by the hotel. In the particular, introducing new services against the benchmarking of services provided by competitors will create differentiation between businesses and strategically place the positioning of the product. The PR Campaigns, marketing, services, and room rates, each are critical to maximize profitability.
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Location of the hospitality facility is the most important decider as to how to best market the experience. Waterfront hospitality is often reserved as either a Romantic Getaway or a Family Resort. Romantic Getaways usually include two guests that have more disposable income than their family counterparts. The greater amount of disposable income along with less expense associated with not having children enables the romantic getaway as the superior choice. Most hospitality organizations choose to Insource Marketing due the ability to control the marketing materials and to discount prices immediately without having to consult a third party marketer.
The services offered by any hospitality organization must be stellar and of such quality that guests will remember their experience for years to come. The importance of a high quality experience is that high prices are validated when the experience is of quality. However, prices do not have to be exorbitantly priced for high quality services. Labor costs in the hospitality industry have come down to provide a high quality base with a staffing cost that allows for healthy margin. The choices for services should reflect the reinvestment of marginal revenue for such amenities as Televised Beach Concerts, Concierge Services, Romantic Evening Luxury Yacht Tours, and Holiday Packages.
Room rates are also critical with regard to the type of guest that the hospitality organization seeks to service. Many places require exorbitant prices simply to dissuade low brow individuals from deciding to stay there. Low prices will attract individuals that are seeking bargains for low cost lodging. The hospitality industry must always function between these two extremes to maximize room occupancy while maintaining the lowest level of cost to services as possible. Lower cost hospitality offerings will likely be subject to resident damages and therefore require such collateral up front including down payments or a security deposit.
Repositioning the product in the simulation was interesting given the choices for repositioning and the result after achieving the reposition. The result is not what I had expected it to be given the type of resort used in the simulation and the type of offerings provided as product for purposes of differentiation. I do not feel the simulation gave a proper and thorough analysis with regard to the various selections for product repositioning and the number of variables that must be taken into account when pricing and promotion decisions are made in the hospitality industry.
The influence of the product life cycle on marketing is crucial to how the marketing budget is allocated across the life cycle to be spent. The product life cycle is also crucial to the pricing schedule of the product throughout the life cycle, with prices at its highest early on in the life cycle followed by lower pricing as the product life cycle increase over time and the product ages against new products that seek to replace. Marketing efforts are concentrated early on in the product life cycle, as prices are highest when the product is initially offered to the public. The product life cycle dictates the marketing of the product to include the pricing.
The product life cycle was the reason for the product differentiation need in the simulation. There was a sentiment that change was needed and therefore a transition from the current product and promotion to a new product and promotion to attract more guests, increase occupancy rates and to raise revenue was the underlying goal. The product life cycle often is at blame for the mishaps and lackluster performance of management and staff. In hospitality, the failure is much easier to place onto the product than onto the management and staff. In hospitality however, the product is often mismanaged throughout the life cycle and is often the reason for failure. A resort setting usually attracts guests seeking high quality standards but at costs that remain relatively reasonable. The product life cycle is therefore a function of its management throughout the cycle rather than the product itself.
In the simulation, the product life cycle was responsible for the need to seek product differentiation. Perhaps if the product life cycle were better managed to serve the guests, the need to differentiate would not be necessary. The product life cycle of concierge services, for example, do not necessarily ebb and wane. There is only a crest and trough effect if the level of services experienced by the guest/customer is reflective of services that peak (crest) and trough.
- Issues in Human Resources Management Simulation.StudyMode.com. (2010) Retrieved 09, 2010, from http://www.studymode.com
