MARKETING MANAGEMENT

CIA-1

TOPIC:

RESEARCH BASED ASSIGNMENT

A PROJECT REPORT

SUBMITTED BY :

MEERA JOSHY (1927436)

L UTHRA (1927434)

SOUMYA SUDESHNA (1927448)

ATHARVA DANGE (1927404)

JEF T JOY (1927458)

MANASH PRASAD DAS (1927452)

SUBMITTED ON:14 JULY 2019

INSTITUTE OF MANAGEMENT,

KENGERI CAMPUS, KUMBALGODU

BANGALORE-560060
Hotel industry

The hotel industry is a broad category of fields within the service industry that includes lodging, food
and drink service, event planning, theme parks, transportation, cruise line, traveling and additional
fields within the tourism industry.

The hotel industry is an industry that depends on the availability of leisure time and disposable income.
The primary purpose of hotels is to provide travelers with shelter, food, refreshment, and similar
services and goods, offering on a commercial basis things that are customarily furnished within
households but unavailable to people on a journey away from home. Historically hotels have also taken
on many other functions, serving as business exchanges, centers of sociability, places of public
assembly and deliberation, decorative showcases, political headquarters, vacation spots, and
permanent residences. The hotel as an institution, and hotels as an industry, transformed travel in
America, hastened the settlement of the continent, and extended the influence of urban culture.

Taj hotels (strong hotel)

Taj Hotels is a chain of luxury hotels and a subsidiary of the Indian Hotels Company Limited;
headquartered at Express Towers, Nariman Point in Mumbai. Incorporated by the founder of the Tata
Group, Jamsetji Tata, in 1903, the company is a part of the Tata Group, one of India's largest business
conglomerates. The company employed over 13,000 people in the year 2010.As of 2018, the company
operates a total of 100 hotels and hotel-resorts, with 84 across India and 16 in other countries, including
Bhutan, Malaysia, Maldives, Nepal, South Africa, Sri Lanka, UAE, UK, USA and Zambia.

The first Taj Hotel, the flagship of the Group was born in 1903 and stood alone for almost half a
century. Initially it was smooth sailing, even though the original hotel was conceived and built when
the hotel business was not even considered an industry.Notably, there was hardly any advertising
directly to the consumer. In fact, this element of the marketing mix was not visible until the late
nineties! Advertising was not considered necessary. Secondly the company was conservative and
media shy for many years.

The reason the hotel towered above the rest was because of the amazing attention to detail that was
paid by it’s founder Jamshetji Tata. As far back as 1900, he made sure that the Taj would have it’s
own laundry, an aerated water bottling plant, electroplating for it’s silverware, a Mora sliver burnishing
machine, a crockery washing plant and elevators. The hotel was built completely at a cost of 500,000
pounds in 1903

Financial highlights :
THE TAJ HOTELS Balance Sheet Analysis

The company's current liabilities during FY19 stood at Rs 21 billion as compared to Rs 14 billion in
FY18, thereby witnessing an increase of 49.9%.Long-term debt down at Rs 17 billion as compared to
Rs 23 billion during FY18, a fall of 27.5%.Current assets fell 5% and stood at Rs 12 billion, while
fixed assets rose 3% and stood at Rs 65 billion in FY19.Overall, the total assets and liabilities for FY19
stood at Rs 96 billion as against Rs 94 billion during FY18, thereby witnessing a growth of 2%.

THE TAJ HOTELS Cash Flow Statement Analysis

THE INDIAN HOTELS's cash flow from operating activities (CFO) during FY19 stood at Rs 7 billion,
an improvement of 44.6% on a YoY basis.Cash flow from investing activities (CFI) during FY19 stood
at Rs -4 billion on a YoY basis.Cash flow from financial activities (CFF) during FY19 stood at Rs -3
billion on a YoY basis.Overall, net cash flows for the company during FY19 stood at Rs -186 million
from the Rs 665 million net cash flows seen during FY18.

Current Valuations for THE TAJ HOTELS

The trailing twelve-month earnings per share (EPS) of the company stands at Rs 2.5, an improvement
from the EPS of Rs 0.9 recorded last year.The price to earnings (P/E) ratio, at the current price of Rs
152.6, stands at 50.4 times its trailing twelve months earnings.The price to book value (P/BV) ratio at
current price levels stands at 3.6 times, while the price to sales ratio stands at 3.5 times.The company's
price to cash flow (P/CF) ratio stood at 21.5 times its end-of-year operating cash flow earnings.

Marketing strategies of TAJ Hotels:

 Positioning: The Taj marked out three separate entities for the Taj Group: Business, Leisure
and Luxury.Though the concept of these sub-brands had come into existence earlier, in the mid
nineties, it was in 1999-2000, that the hotels became operationally different. Which meant that
though the heads of these three divisions sat at head office, their ‘territory’ is scattered
geographically, according to which type of hotel they look after.
 Strategy: A higher emphasis was placed on the business segment as the profits are higher (this
market being less price-sensitive as compared to the luxury segment). There was a proliferation
of the Taj Presidency hotels not only in new cities, but also smaller towns.
 Advertising:It was only when the product was ready, was a major advertising campaign
developed. The new campaign developed a specific brand identity for the hotel.Though the Taj
had high unaided recall, it launched a corporate campaign to reinforce this new identity. The
ad (made by Rediffusion) shows the enigmatic woman who stands for both hospitality and
efficiency. The identity was developed after extensive research on the consumer’s attitudes
towards the Taj. Over 60 in-depth interviews were conducted by client and agency. The
parameters? Not quantity, but quality. The things done right. The quality of check-in, the smile,
the greeting or the welcome drink. The insights gathered were analysed and a clear slot, which
the Taj could occupy when global competition arrived, emerged.

MARKETING MIX: THE TAJ BRAND

The brand “Taj Hotels Resorts and Palaces” comprises 58 hotels across India and 17 hotels globally.
The hotels are grouped into 3 categories - Luxury, Leisure and Business.

The Taj Luxury Hotels offer lavish accommodation, gourmet specialty restaurants and bars, fitness
centres and spas and well-equipped business and banquet facilities. Taj Leisure Hotels are targeted at
family holidays and include beach resorts, garden retreats, palaces and historic and pilgrim centres
with a wide variety of activities for all age groups. Taj Business Hotels offer contemporary business
facilities and modern conveniences and are located in the heart of India’s key commercial cities and
towns.The marketing mix of Taj hotels is explaine as below:-

1. Product
 The brand “Taj Hotels Resorts and Palaces "comprises 58 hotels across India and 17 hotels in
international locations. The hotels are grouped into 3 categories - Luxury, Leisure and
Business. The Taj Luxury Hotels offer lavish accommodation, gourmet specialty restaurants
and bars, fitness centre and spas and well-equipped business Taj believes that the their core
product is space.
 Broadband wireless Internet access at select Taj hotels: Multiple 'hot spots' located across the
hotels lets you get onto the Internet from almost any place in the hotel – quickly.
 Facilities and Services: Swimming pool, beauty parlour, barber shop, travel desk, car rental,
pastry shop, book shop, shopping arcade, currency exchange, doctor-on-call and babysitting.
Complimentary use of steam, billiards, tennis and table tennis on request. 24-hour room service
and laundry service .
2. Place and Time
 As far as place is concerned, all the Taj services and facilities are provided at one point. To
ensure timely delivery of their services, they have set processes in place and in case of failure
or delay of service, they have built in contingencies and trained their staff to communicate the
delay to the customer in the right manner.
 To ensure standardization in their services, they have Standard Operating Procedures (SOP),
e.g. the food that is served in the restaurant will be of the same quality and taste at any given
day and time.
 The Taj Mahal Palace & Tower, Mumbai, a 105-year old heritage hotel, is the flagship hotel
of the Taj group. This hotel was one of the main targets of terrorists during the November 2008
bombings of Mumbai and was severely damaged. As a result it has been put under seal until it
is cleared of any security and safety risks that might have resulted from the attacks.
3. Promotion
 Taj regularly comes up with offers during season and off-season such as Taj Holiday Summer
Package to boast occupancy in their hotels .
 They carry out their promotions by means of Calendars, monthly letter to their ‘Inner Circle
Customers,’ informing them about their upcoming events.
 Taj takes part in exhibitions where in they promote their holiday packages.
4. Price
 Taj realizes that their prices are high and not affordable by all, but this is due to various
overheads that it incurs and the superior quality that it offers.But at The Taj, they serve the best
quality and also incur overhead expenses.
  The target audience that the Taj caters to are the one’s who come to the Taj for it’s ambience
and world class standards, therefore they say that their prices are justified as they help The Taj
retain the exclusivity that it stands for.
5. Physical Evidence

Taj is fully satisfying its customers on account of physical evidence as the hotel is counted in
5 stars it has maintained its environment that is liked by all.

6. Process
Major service encounter that extremely delighted or disappointed are:
Check – in. Bell person carrying luggage to the room. Food. Wake up call
Check out.
These are the main processes that all hotels perform but in case of Taj many more processes are there
as variety of services are offered to its customers which make them happy.
7. People
Taj has various professional people to handle its customers and to give a high service to its customers
like:
• Skilled person
• Professional person
• Personal Agents
• Technological person
• Travel agents
As Taj has employed professionals for serving its customers so there are less chances in its service
lags and it can deliver its best

Oberoi hotels (rival hotel):

Oberoi hotels is the second largest premium hotels in India. The Oberoi Group, founded in 1934,
operates 35 hotels and three cruisers in five countries under the luxury Oberoi and five-star Trident
brandsThe Oberoi Group of Hotels is India¶s second largest hotel company.The Group is also engaged
in flight catering, airport restaurants,travel and tour services, car rentals, project management and
corporate air charters A distinctive feature -highly motivated and well trained staff that provides the
kind of attentive, personalized and warm service that is today.

ABOUT OBEROI
The Group employs environmental and ecological practices in technology, equipment and operational
processes.The Group also supports philanthropic activities like education for the mentally and
physically challenged.The Group is also a keen contributor to the conservation of nature and of cultural
heritage.The Group employs more than 12,000 people worldwide and operates 27 hotels and three
cruisers in five countries
PERFORMANCE OF OBEROI HOTELS
Oberoi’s commitment to excellence, attention to detail and personalised service has been appreciated
and recognised by their guests. In 2017 and 2018 Oberoi Hotels & Resorts was voted the Best Hotel
Group by the readers of The Telegraph, UK. In 2016, Oberoi Hotels & Resorts was recognised as the
World’s Leading Luxury Hotel Brand at the World Travel Awards, for the fifth consecutive year. Also
in 2016, at the World’s Best Awards, readers of Travel + Leisure, USA voted Oberoi Hotels & Resorts
the World’s Best Hotel Brand for the second consecutive year. In 2018 it was recognized as one of the
Top 20 Hotel Brands in the World.

Oberoi’s Gross revenue and Profit for the years

STRATEGIES OF OBEROI HOTELS

Marketing of Oberoi Hotels analyses the brand/company which covers 4Ps (Product, Price, Place,
Promotion)

Product:
The product strategy and mix in Oberoi Hotels marketing strategy can be explained as follows:
Oberoi hotels is one of the most premium hotel chain based out of India. The company has several
service offerings in its marketing mix product strategy. This made them enter from the five-star deluxe
segments to Trident hotel chains which targeted business and leisure seeking for high high-quality
service at more affordable prices.The Oberoi Hotels provide serene surroundings, relaxed atmosphere,
luxurious rooms and legendary service. A stay at Oberoi Hotels promises all of these benefits and
more. Be it Infrastructure, services, cuisine or facilities are at par with international standards. The
Oberoi hotels provide exotic vacations offer which includes accommodation, breakfast, airport
transfers and taxes.

Price:
Oberoi Hotels have as its potential customers. Being placed in the premium section targeting high end
segment of the society, the Oberoi Hotels attracts targeted big multinational companies, high income
section of the society and urban travelers high purchasing power. The band follows premium pricing
strategy where the customers are ready to pay to get the quality services as per their needs. The hotel
provides luxurious and first class to its esteemed customers. The hotel provides several types of
accommodations with different facilities and services which are priced accordingly. The USP of the
Oberoi Hotel is the rich and luxurious experience that it offers the best experience ever.

Place:

Though Oberoi Hotels started their operations from India but gradually they have made their
international presence by spreading to several countries. The headquarter is based in New Delhi in
India. The Oberoi’s have a future plan of introducing a new hotel in Marrakech in Morocco. The
places opted by the Oberoi Hotels are of great significance like heritage sites and places with some
historic monuments to attract more number of tourists.

Promotion:
The Oberoi Hotels have adopted several promotional policies to create the brand awareness. Their
primary focus for promoting the brand has always been the use of mass communication mediums.
They have launched various print campaigns via magazines, newspaper etc. for the same. Also, social
media platforms like official Facebook account , Twitter and Instagram handles, YouTube channels
and official website has been very active in promoting the brand by sharing customer experiences.
Their publicity largely depends upon the mouth of word promotion as the customers by themselves
share their experience on various portals like travel and tourism portals and recommending the
experience to other potential customers.

People:
Being in the hospitality sector, service is the most important thing. The Oberoi Hotels has an efficient
and multi-talented workforce which offers the world class service to its customers. The Oberoi Hotels
have their own Centre for Learning and Development (OCLD) which is based in Delhi. All the regional
experience provided by the Hotel is done with the help of the particular sector specialists.

Process:
The Oberoi Hotels provide one of the best services and management practices among the world class
hotel chains. They provide consistent and well managed services to their customers to maintain the
customer loyalty. Booking of the hotels for various occasions be it vocational trip, corporate trip or
any life events like marriage, parties etc. can be done via online mode. This service is being provided
by various hotel booking portals as well as the Oberoi Hotel’s official website.

Physical Evidence:
The Oberoi group has a vast range of hotels and resorts in different parts of India as well as abroad.
Along with great services, the Hotel’s also provide various daily use products like toiletries, notepads
and pens etc. which are customized with the Oberoi Hotel’s logo on them.

Direction of hotel industry in the future:

 In the long term, the demand-supply gap in India is very real and that there is need for more
hotels. The shortage is especially true within the budget hotels and the mid-market hotels
segment.Various domestic and international brands have made significant inroads into this
space and more are expected to follow as the potential for this segment of hotels becomes more
obvious.
 The past year saw the start of an uptrend in the hospitality sector but was also marked by
multiple challenges like curbs on liquor sale and the GST rollout. With these issues behind
them, hotel operators expect business growth to pick up momentum in 2018. The growth is
expected to come from the rise in online bookings.
 With a rise in online competition, popular models have come up with online travel agents
(OTAs) offering a single marketplace for all travel-related needs. There are also seen meta
search engines like TripAdvisor and MakeMyTrip, that operate like travel discovery platforms.
Further, online accommodation reservation services like Oyo Rooms have gained popularity.
Apart from this, branded hotels are seen operating direct bookings through their websites.
 Apart from the above, the Indian government has realised the country's potential in the tourism
industry and has taken several steps to make India a global tourism hub. The "Clean India"
 campaign and development of inland waterways for transport and tourism are projects that have
gained momentum over the previous year. Additionally, programmes such as "Make in India"
and the "Smart Cities" initiative have highlighted the Government's support to skill
development and investments in Hospitality and Tourism.
 It should be noted that that the base for tourism in India is still very low. The spurt in demand
for hotel accommodation over the last few years has inflated hotel rooms in the country.
However, a number of international brands across all hotel segments are planning to or have
recently entered the Indian market.
 India, after China, is considered as one of the most lucrative hotel markets in the world and has
the second largest construction pipeline in Asia. Growing affluence, potential for economic
growth, increases in disposable incomes and the burgeoning middle class are expected to drive
both leisure and business travel in the coming years.
 The long-term outlook for the Indian hospitality business continues to be positive, both for the
business and leisure segments. The sector has potential for growth on the back of increases in
disposable incomes, increase in foreign tourist arrivals, momentum from government-led
initiatives, and the burgeoning middle-class population.

CRISIL Reports:
As per the CRISIL talks budget 2019 the impact of budget in the hotel industry is neutral.
Indian hotel industry revenue skewed towards the premium segment:
PESTLE analysis of Hotel Industry:

Analysis for hotel industry is the best and modern way to find factors which affect it. Social and
environmental part play a significant role equally in strategic management. However, economic factors
are divided into legal factors. The political factor refers to Government policy which helps in the
economy of hotel industry. So read the PESTEL analysis now.

 Political Factors
The political factors play a major role especially in the economy of the country. The main target of
hotel industry is to attract international tourism which will host a variety of different properties.
Remember that hotel industry has a backbone of Government and it is the government support helps
to sustain in a competitive world. The government charges great amount of tax on the luxury and star
category of hotels. Political changes have a direct impact because of Government, especially on hotel
industry.Take an example of Taj and Oberoi hotel Terror attack; it has substantially dropped the
tourism rate.

 Economic Factors
Economic factors include many factors such as taxation changes, inflation, economic growth, interest
rates and exchange rates. It is best to know that economic change does leave a significant impact on
the behavior of the firm. All the capital states or province of every country, own wide number of
tourists arriving for the purpose of conferences, workshops, business dealing and another sole purpose.
However, hotels worldwide try to capitalize the travelers because they bring great amount of money
with them accompanied with huge expectations from five-star hotels.In last years, many guests also
pay for the extra services they demand. More guests accommodate in hotel, more services they demand
and obviously they pay more which means industry will grow. With the increasing number of guests,
services provided also needs to be luxurious and good.The economy of India has faced minimal drop
because of financial system and controlled status in country. This will enable the hotels to concentrate
on foreign travelers allowing the local market to get relief to Indian Hotel industry.

 Social Factors
Changes in social factors impact the demand for firm services and products. The willingness and
availability of individual to work. Being a business hotel, there needs to be a variety of options which
can be availed.The room for single guests and twin bedroom proves to be perfect for males. However,
individual or single bedrooms are preferred by females. Every hotel welcomes at least 10% different
classes of guests and availability for every kind of room is plus point.

 Technological Factors
The technology used must be beyond standards especially when it comes to hotel management. The
software’s used by Hotels helps to meet all needs of staff members and customers. Many new hotels
have started embedding and using more defined technology. Even guests prefer the hotels which are
embedded with technology. They are considered more safe and secure. Technology helps to reduce
the work effort and enhances the results. It would be a boon to humanity which will help to show
progress of property and advances in hotel industry.There are many hotels which do not provide Wi-
Fi facility or security purposes, but people and apparently guests prefer accommodation in places
which are embedded with Wi-Fi. Many customers and business people utilize technologically
integrated hotels because it is a way of achieving customer satisfaction quickly. So technology is a
great external factor which would affect hotel industry.

 Environmental Factors
Environmental and weather changes have a direct impact on many hotel industries. In serious or severe
weather conditions, taxes are applied to avail more friendly and environment-related products. The
hotel industry does not demand or create any factors which would affect their credibility.Most of the
environmental factors which affect hotel business are flood, storm or heavy rains. These factors play
a vital role, especially in monsoon season. Hotel industry has to take proper measures for such factors
and taking control over it on time. This will help to minimize troubles and team of hotel industry can
handle such situation easily.Natural factors such as an earth quake, or natural factor directly affect the
hotel sales. The hotel management teaches proper measures to their employees who need to be taken
especially during emergency cases.

 Legal factors
The legal environment is essential for the growth of hotel industry. Last year, there have been many
changes made which affected behavior of firm. The factor does include safety and health laws. In every
country, hotel has to follow age law. However, discrimination law has been eliminated. The possible
impacts of legal legislative law do affect hotel industry. Only people get attracted to leisure based
hotels which are legal and provide secure services.The current situations and war conditions do affect
law of hotel industry. It may lead to serious changes in law. The Government also becomes flexible
during this time and allows to think about society. So it might be possible that external factors may
leave a negative impact on hotel industry.

Conclusion:

The outlook for the hotel market in India is optimistic and will continue to remain so, in our opinion.
The economy’s buoyancy, initiatives to improve infrastructure, growth in the aviation and real estate
sectors and easing of restrictions on foreign investment will fuel demand for hotels across star
categories in the majority of markets. India’s hotel industry is increasingly being viewed as investment-
worthy, both within the country and outside, and several international chains are keen to establish or
enhance their presence here.
 REFERENCES

Articles:

 Lasune, S. (2012). Marketing strategies and quality management of five star hotels in order to
improve its revenue with special reference to selected five star hotels in Mumbai. National
Monthly Refereed Journal of Reasearch in Commerce & Management, 1(4), 28-36.
 Litteljohn, D. (2003). Hotels. The international Hospitality Industry, 5-29.
 Deshpande, R., & Sinha, M. R. (2011). Taj Hotels, Resorts and Palaces. Harvard Business
School Marketing Unit Case, (511-039).
 CRISIL Reports 2018

Websites:

 https://www.mbaskool.com
 https://www.eihltd.com/investor_relations/eih-annualreport-2018
 https://www.ibef.org/blogs/the-indian-hotel-industry-sunshine-ahead