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Bangalore is one of the fastest growing cities in India. It is characterized by high inflow of investments, both foreign and domestic.

The presence of a large number of multinational companies and other corporates in Bangalore gives a wide consumer base for the hotel industry.

Bangalore, being one of the major tourist attractions in South India, attracts a large number of tourists, both foreign as well as domestic. A major reason for the demand for hotel rooms in Bangalore can be attributed to the fact that a large number of information technology and information technology enabled services companies are located here. Bangalore does not suffer from the seasonality for room demand. It gets business throughout the year, except December, when international companies go on long Christmas vacation. There is a high demand for five star and five star deluxe segment hotel rooms in Bangalore. The demand is of the order of approximately 1400-1500 rooms.

MAJOR HOTELS IN BANGALORE 1. Windsor Manor Sheraton and Towers It is a Welcome Group Hotel, which is known for its elegance and is perceived as a premier hotel in Bangalore. The hotel is located on Sankey Road, just 12 km away from Airport and 4 km from Railway Station. Windsor Manor has collaboration with the Sheraton Group of Hotels, which makes it easily accessible throughout the world. This elegant hotel is the architecture that dates back to the British Regency Period. The Windsor Manor Sheraton & Towers is the place for lordly living. Windsor Manor has the largest number of rooms amongst the different players. Another of the hotel is the presence of both five star and five star deluxe types of rooms in the same complex. This helps them in fighting the competitors by price slashing, i.e. providing the five star deluxe rooms for the price of five star rooms. 2. The Oberoi Oberoi Hotels is synonymous the world over with providing the right blend of luxury, warm service and quiet efficiency. Internationally recognized for all-round excellence and unparalleled levels of service, the business travellers acknowledge Oberoi Hotels as amongst the finest.

The Oberoi Bangalore is located on MG Road, in the heart of the business and shopping districts of Bangalore. The luxury hotel has an abundance of greenery that is characteristic of the Garden City and is also the globally renowned centre of

Indias software industry. At The Oberoi, Bangalore, all the tastefully appointed rooms overlook landscaped gardens and guests can enjoy cuisine from around the world. The hotel offers impeccable service, understated luxury, fine cuisine and most modern facilities for discerning business travelers. This five star deluxe hotel boasts itself of providing the most sophisticated facilities in the hospitality industry.

3. The Leela Palace Kempinski

It is located on the Airport Road and is one of the favourite hotels for both leisure as well as the business travellers. Spread over 9 acres of landscaped gardens, lawns and fountains the Hotel Leela Palace sports a traditional Indian architecture and offers luxurious stay in its elegant interiors.

The Leela Palace Kempinski, Bangalore is built in art deco style recreating the grandeur of The Mysore Maharajas Palace. It is a palace with the heart of a modern hotel. Its 254 rooms are opulently furnished and are befitting royalty.

4. Ashok It is an ITDC run hotel in the five star deluxe category. Though the hotel is situated in a prominent location, it is still not a major competitor due to its Government kind of attitude and bureaucratic dealings. 5. Le Meridien Known as Holiday Inn till 1997, it was part of Holiday Inn chain of hotels. It is an active player in the market. 6. Taj West End It is a premier hotel of Indian Hotels Group, popularly known as the Taj Group of Hotels. Situated on the Race Course Road, the hotel is presently the market leader in the five star deluxe category in Bangalore. Its mission statement reads as follows: 1.Ensure best financial results for our shareholders with constant innovation in products and services. 2.Be responsible to a social cause and evolve a green label.

3.Commit to employee growth in a harmonius work culture. 4.Ensure guest retention by being systematic, trained, ethical and courteous, thus we will be leaders having the highest brand loyalty. 5.Achieve guest satisfaction by being the most unique luxury business hotel. This clearly covers all aspects of the hotel business and is close to the core of the business.

COMPETITIVE STRATEGY Taj West Ends competitive strategy is enumerated below: (1) Target Customer: The hotel is targeting luxury business travellers, including domestic and foreign businessmen, the senior management personnel, and the elite strata of society.

(2) Positioning: Taj West End positions its service offer as an office away from office to serve the business customer and also keeps the general positioning of the hotel industry, i.e. home away from home.

(3) Differentiation: The hotel has differentiated its service offer through physical ambience. It maintains a natural green environment so as to provide a relaxed atmosphere to the tension bound business travelers and this feature has been well perceived by the target customers. (4) Marketing Mix: The marketing mix of Taj West End is explained below: (i) Product: The service offer has tangible products in it Rooms: The rooms are of six types, namely, club rooms, normal rooms, superior cottages, suites, deluxe rooms and the old British Raj ambience rooms.

Restaurants: Paradise is Thai food restaurant. Island Caf is an Italian food restaurant with possible poolside barbecue. It has banquet halls with capacities ranging from 10 to 1000. The hotel has a business centre with latest facilities like internet. It also has an interview centre where companies can conduct interviews or discussions. Fitness centre, laundry, etc. are added facilities.

(ii) Pricing: Taj West End resorts to differential pricing, i.e. different prices for different types of rooms. The price range varies from approximately Rs. 5000/- to Rs. 20,000/per day with service charge extra. Its prices are comparable with those of Oberoi, but higher than Windsor Manors. All these hotels have come out with an unofficial cartel for deciding the prices. (iii) Place: The hotel is situated on Race Course Road, which is away from the city life and has less pollution and traffic congestion. It has 23 acres of beautiful landscape, which is the unique selling proposition for the hotel.

(iv) Promotion: Taj West End does not resort to heavy promotional activities by its own as such, but the Taj Group as a whole is advertised. The advertisement is usually done through magazines and hoardings. But the main emphasis is on direct marketing.

(v) Physical Ambience: It boasts itself of maintaining its natural environment and provides the latest state-of-the-art facilities. (vi) People: The Taj West End realizes the importance of people in any service organization. For that, the first step is to market their service offer to their own employees so that they understand the need for maintaining high quality and standards.

CAPACITY DEMAND BALANCING

The hospitality industry in Bangalore is characterized by higher demand than supply. An important characteristic of this demand is the fluctuations. The fluctuations may be as described below:

Seasonal Variation: The Indian hotel business focuses on domestic and foreign tourists to a large extent. The peak season for the hotels is usually from September to December followed by a steep fall till May. The period from June to September gains momentum once the monsoons are over.

Weekly Variation: The demand varies during the weekend and the beginning of the week as many of the business travellers tend to go back on weekends, thereby

reducing the demand. On the other hand, many customers come at the beginning of the week (Monday or Tuesday) for business.

To meet the higher demand and smoothening the demand fluctuations, Taj West End is resorting to following measures: Tie-ups: These are with corporate clients for regular inflow of clientele. Taj West End also provides certain types of discounts to these clients depending on the frequency and number of customers. Some of their clients are Motorola, Nokia, etc. Regular sales calls are made by the sales executives to existing and potential clients. Intra Group tie-up: Taj West End has tie-ups with other Taj Group hotels in Bangalore and other cities for channelizing the customers to their hotels. Foreign tie-up: The hotel has recently entered in tie-ups with some foreign hotels like Shangrila in Middle East and a few hotels in Southeast Asia to channelize foreign customers to Taj West End.

ACTIVITY

(1) What kind of marketing strategies Taj should develop in order to achieve worldclass status despite competition? (2) Can demand and supply be balanced better? Suggest solutions.

CASE ANALYSIS BRIEF OF THE CASE Taj West End is a five star deluxe category hotel located in Bangalore. It is owned by the Taj Group. A major player in the hospitality segment, it caters to the needs of both leisure as well as business travellers. Although it is facing stiff competition from other big players like Windsor Manor, The Leela Palace, etc. but it is still sustaining its

growth momentum over the years. The case study discusses about different strategies adopted by the Taj hotel, including 4 Ps and how these can be developed further in order to make it a world-class hotel.

(1) What kind of marketing strategies Taj should develop in order to achieve worldclass status despite competition? The Indian Hotel Industry is growing at a rate of 9 percent per annum. With the devaluation of the Asian currencies, liberalization of Indian economy and the political and economic stability, both tourists as well as business arrivals are likely to gather momentum in the years to come. Average Room Rate (ARR) and occupancy are the two most critical factors that determine the profitability of a hotel. ARR in turn depends upon location, brand image, star rating, quality of facilities, services offered and the seasonal factor. After considering all these factors, the following measures can be adopted by the Taj West End hotel to achieve a world-class status:

Maximize market share in historically profitable segments This can be done by examining what has previously worked in marketing and improving on those; by marketing more aggressively to those same types of people (psychographically) in the places (demographically) where they have come from in the past. The registration card data base should be a key to this effort. Find and Exploit New or Smaller Profitable Segments This can be done in various ways. Among them will be using research and the data base to find and pursue niches in order to expand them and to convert them into mainstream business.

All Guests who come to Taj West End should be willing to return For this to happen, hotel should plan everything meticulously, be it physical facilities, cleanliness, room-ambience, in-room amenities, etc.

Tie-up with international brands To achieve a sound and strong branding, Taj West End should need to associate with strong brands for strong market presence, especially catering to international clientele. Airlines are one such example where an association with hotels offers mutual benefits.

Develop an Internet Marketing Strategy Internet Marketing has developed remarkably in hospitality over the last few years. According to a survey, approximately 20-25% of all revenues in hospitality are generated from the Internet. Keeping this in mind, it is the need of the time for the hotel to develop an effective internet marketing strategy immediately. The benefits of having an effective internet marketing strategy are manifold such as: Serves both as direct-response vehicle and branding tool Creates personalized interactive relationships with customers Targets and entices recipients with relevant promotions Plants seed in the minds of recipients regarding future travel plans Serves as a tool to move distressed inventory Functions as a sales force - tens of thousands reached in seconds Recruits and retains customers, new and old Least expensive form of active marketing available. Other Measures-People should be involved

1.A hotels strategy development should include, to some degree, representatives from every department so that the staff takes ownership of the strategy. Employees, in more cases than one might imagine, know where guests are coming from, why and what they are doing while in the area. The hotel should capitalize on that knowledge.

2.The management should make sure that all the staff is made aware of the strategy and the relevant details of its execution. For instance, part of a guests perception of value is a friendly, service oriented staff. That means every employee passing a guest must make eye contact and greet the guest, hold doors, and generally be aggressively friendly. (2) Can demand and supply be balanced better? Suggest solutions. The coming years promise to be both challenging and extremely beneficial years for the Indian hospitality industry. The demand for hotel rooms is usually very high during peak seasons, whereas in off seasons the occupancy rate reduces to a great extent. This can be tackled by taking a few concrete steps as follows:

Minimum length of stay: Over the course of the peak season, hoteliers throughout should be encouraged to enforce minimum length of stay of requirement. This will encourage longer booking periods and will have a positive impact on occupancy levels throughout the year.

Optimal pricing strategies: The occupancy levels usually decreases during weekends. So, hotels can take some innovative strategies to counter this problem. This may include offering discounts, reducing room tariffs during weekends, etc. A carefully planned strategy is needed to maximize occupancy levels.

Pre-payment plans: To minimize the impact of costly last-minute cancellations, it is recommended that hotels implement a system of phased pre-payment restrictions. By clearly stating the terms and conditions of no-shows and cancellations, hotels will be able to dramatically minimize any potential negative impact on their overall revenue potential.

Overbooking: Appropriate overbooking levels should be set to counteract the expected rise in cancellations. Implementation of the above recommended strategies combined with careful and detailed observation of the levels of demand will allow hoteliers to achieve the correct balance between demand and supply. By successfully achieving the balance required, hoteliers will be able to maximize their revenue.