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02/01/2012

Research Proposal On Differentiation And Branding In The UK Hotel Industry


Differentiation and Branding in the UK Hotel Industry

 

Introduction

This thesis relates with the manner in which hotel companies operating in the U.K are using branding within their marketing strategies, therefore why and how they are doing so. The topic is considered to merit attention because a stage had been reached in the development of the U.K hotel industry where branding is claimed by many writers and practitioners to be critical to the competitiveness of hotel chains.

The primary research, which represents the culmination of the thesis, is intended to have some practical value to the industry. There are three objectives of the primary research, they are

(a)    to assess the extent of differentiation perceived to exist by the business traveler between hotel chains operating in the U.K

(b)    to assess the extent to which the 3 product features of price, range of facilities, and quality are utilized by the business traveler in differentiation between hotel brands (if differentiation is perceived), and

(c)     to measure the extent of brand awareness amongst business travelers (regarding selected U.K chains). 

Initial investigation into the topic would comprise mainly of a review of mainstream branding literature, and that of hotel branding. This highlighted several points in which the key ones are: (a) branding is a topic of considerable breadth, involving, for example consumer behavior, advertising and corporate identity. It is thus not a discrete part of marketing (b) Branding is a tool used in implementing marketing strategy and is not in itself, a strategy. Within the literature on hotel branding, it is, however, occasionally implied that ‘branding’ carries the same meaning as one particular strategy, that of ‘differentiated marketing’. Branding being a tool used in execution of marketing strategy, the manner in which it is used is dependent upon the nature of a company’s strategy. Consequently, the increased use of branding within the hotel industry is due largely to changes in marketing strategies, which in turn are reactions to the prevailing environment. A full understanding of branding thus requires an understanding of the context of strategy. Branding can be said to be a strategic issue (c) The majority of the literature on branding pertains either explicitly or implicitly, and quite understandably to consumer goods. It is in this sector that the concept of a brand, as it is understood today, was developed a century ago. Now it is proposed that brands may be classified as other things not only consumer products, such as people(e.g celebrities), places, ships, companies, industrial products, service products etc. Because it is only relatively recently that the last of the entities, service products, have been considered as ‘brandable’, little in-depth writing exists on how a consumer goods concept  transfers to services.

In response to these points the following topics would be researched into greater depth: (a) specific topics within marketing which are of relevance to branding: consumer behavior (cognitive processes; brand loyalty); advertising; corporate image (b) marketing strategy: strategy implementation; influences on strategy; strategic typologies (c) services marketing: characteristics of services; marketing strategy and branding in service industries other than hotels.

 

Those subject areas being considered being of relevance to branding within the U.K hotel industry forms the thesis structure shown in Appendix 1. It can be seen from this that attention is progressively focused onto the hotel industry. First, the general theory of target marketing (Kotler, 1991), and the role of branding in that process would be discussed. Second, target marketing and branding within the service sector would be considered. Third, the applications of target marketing and branding within the specific service industry of concern, which is the hotel industry. The weight of the evidence suggests the key purpose of branding is to achieve product differentiation. The main objective of chapter 6 and 7, is therefore to test the extent of differentiation perceived by the chosen sample (business samplers).The thesis proposal is structured in this manner because it was considered an understanding of developments in the hotel industry required prior comprehension of marketing strategy and branding theory.

 

The content of the following chapters would include: (a) Chapter 2 and 3 would be concerned with target marketing as a concept and the process, which dominates modern marketing thoughts. Chapter 2 would talk about the rationale behind target marketing, and also the alternative generic marketing strategies which might arise from market segmentation and market targeting. Chapter 3 would deal with the third stage of target marketing, namely product positioning, it is in this chapter that the tool of branding is used, and it would also contain discussions on branding terminology. Indeed, it is argued that branding is synonymous with product positioning.

Purpose of study           

There are three objectives of the primary research, they are

(1)               to assess the extent of differentiation perceived to exist by the business traveler between hotel chains operating in the U.K

(2)       to assess the extent to which the 3 product features of price, range of facilities, and quality are utilized by the business traveler in differentiation between hotel brands (if differentiation is perceived), and

(3)     to measure the extent of brand awareness amongst business travelers (regarding     selected U.K chains).

The relationships between the primary research objectives and the preceding theories are discussed below.

Objective 1

Since the role of branding in the hotel industry is the creation of a clear brand image and a differentiation of the firm in order to position itself in the market, this results in targeting the customers who perceive a certain hotel brand and its products to possess some unique features and attributes. These attributes and features firstly differentiate these specific product offerings within the overall market with the existing competition created by other already known products and secondly reduce the increased importance of price when the customer decides to purchase it. In a market, which consists of a large number of products, differentiation is of great importance. In such cases, a lack of positive differentiation can sometimes result in price discounts, which is disastrous to the profits of the hotels. I would like to show in this thesis that the desired outcome of  the process of target marketing is the creation of a differentiated market position, as shown in Appendix 2 (page 119 of paper). This figure is a copy of Appendix 1, but the key points to the chapters of which I would write about are also in there. The U.K hotel industry as we would see in the thesis has evolved to a mature state; hence the main research objective of assessing perceived differentiation.  This objective was chosen to assess the differentiation perceived by one segment of hotel users, rather than to attempt an inter-group comparison. The business traveler group was selected for this study because of its importance to the hotel industry.

Objective 2

If differentiation is perceived, it would appear pertinent to enquire along which dimensions brands are considered to differ. This objective partly addresses this issue by seeking to assess the salience of pre-selected product features in differentiating between brands. These features are price, range of services/facilities and quality. In choosing these, it is hypothesized that they are salient differentiators; the former two in particular would appear to mark basic distinctions between the market levels formed in structuring of  the U.K hotel industry. Prices and range of facilities are often likely to be important initial considerations in the choice of a hotel., and hence consumers should be more aware of these basic product attributes than features which are of less importance. It is also hypothesized that price and range of facilities, will be perceived to be highly correlated as these are really related in reality (the more expensive the hotel, the more extensive its facilities). Theoretically, quality is independent of price and range of facilities . It is also hypothesized that product quality will be related to these other 2 product attributes. In a study primarily concerned with identifying dimensions of differentiation , product features would not ideally  be pre-selected; rather they would emerge from the research. However, this study’s main objective is the identification of differentiation per se, not its facets. The hypothesis that the 3 selected product features are salient dimensions of differentiation may be refuted. A further study- outwit the scope of this thesis- would then be required to assess which criteria are used to distinguish between the brands (or, indeed, which supplement price, range of facilities and/or quality).

Objective 3

Brand awareness is a subject’s familiarity with a brand name. Positive brand awareness does not necessarily indicate that a brand is favorably perceived or likely to be purchased in preference to a brand which has an unfamiliar name (Engel, Blackwell and Miniard, 1990). Should an intermediary be used, the purchaser and the user of the hotel product may not, infact, be the decision maker. However, if a hotel chain brand wishes to clearly position itself in the mind of the end-user, then awareness of the brand name must be an initial step. Associations can then be built onto the brand name.

The objectives just mentioned would relate to chapters of the thesis which would deal with the issues of product differentiation and market positioning.

 

Methodology

Type of investigation

The type of research to be conducted in this thesis is through exploratory and qualitative research design. The qualitative research study is the best choice in this case in order to answer the specific research questions posed and also to suitably expand more on the three objectives stated, that are associated to the rationale of the study.

Sampling Design

There are different methods of sample collection such as quota sampling, simple random sampling, stratified sampling, cluster sampling and convenience sampling. The alternative methods are probability and nonprobability sampling. Most likey questionnaires would be given to guests who spend more than one night in the hotel, because most business clients have no time, if they are just staying one night.  The sample plan in this thesis is influenced by several practicalities: time, resources, and the need to minimize inconvenience to the respondent. In this case a non-probability sample will be used. The information required to carry out the research regarding the decisions to be made will be attained through  the purposive sampling, which is a form of non-probability sampling. This would also be due to the fact that the information will be gathered from a convenient population sample, which would be accessible and close to hand, the guests do not also have a predetermined or known chance of selection. The target group of this research would be about 5-6 branded hotels, situated in different parts of London. They would be chosen due to the how diverse their product ranges are. Judgement sampling will also be used, in the circumstances where the choice of subjects are in the best position to provide essential information.

Data collection method

There will be 2 types of data collection methods involved in this thesis; primary and secondary data collection methods. Primary data, as the name implies, is the data collected for the sole purpose of the research topic, by the researcher. While secondary data is data which has been collected by someone else for some other study, which is related in some way  to the topic at hand e.g books, journals, hospitality press, web site, local and national press etc. Secondary data can lead sometimes to wrong conclusions if interpreted wrongly. In this case the methods of collecting the primary data would be to have face to face interviews, telephone calls and also through self-designed questionnaires. In the face to face interviews, I intend to take notes when there is a response by the interviewee. Also to be used during the interview process, would be a voice recorder in order to remember and to facilitate the note taking and also to improve the flow and communication of the interview process. Regular hotel visits and phone calls would be made to the hotels I wish to do my research on. In the hotels I choose to target, the questionnaires would be distributed to the business travelers by the hotel staff, and those completed would be returned to the reception. This method is chosen in order to have minimum disruption to both staff and guests (the questionnaires could be completed at a time most convenient to the guest during his or her stay). A pilot study would first be conducted prior to the main study in order to test the questionnaire design.

Data Analysis

The type of testing to be used in this case would be nonparametric testing. All the data gathered from the interview and questionnaires will be tabulated and coded so that nonparametric testing would be executed. Parametric tests are more powerful than nonparametric tests given the sample size, and assume the variable(s) being measured is/are normally distributed among the population. Criteria other than sample size must, of course, be met before parametric tests can be used.

There could also be low responses from business travelers, which could be due to (a) their lack of time during their stay in the hotel, (b) their lack of interest in the questionnaire , which also might be a supplementary to the comment card owned by the hotel, (c) lack of commitment on the hotel’s part, concerning the collection of the questionnaires and the administration.

Evaluation of Questionnaires

 

 

 

 

 

 

 

 

 

 

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