MARKETING MANAGEMENT II PROJECT

Topic: P&G

Submitted to
Miss Shino Abraham
Saintgits Institute of Management

Submitted by
Alex V John
Ardra Mani
Devica S Nair
Emil Mathew Joseph
Sweety Elizabeth
MBA Batch B
2018-20
Saintgits Institute of Management

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 (i) Introduction
The hotel Industry in India has a tremendous market potential. Globalization, economic
liberalization, easy access to funds, information technology has shaped the present Indian
Hotel Industry. The paper has traced the humble beginning of Indian Hotel Industry and
discussed the market factors that led to growth and boom as is been witnessed today. The
paper discusses the innovation that has taken place in Indian Hotel business especially in the
development of budget segment hotels, growth opportunities that are available in different
market segments and also how technology is shaping the means to approach the target
market.

The hotel Industry in India is booming like never before. There are projections of severe
shortage of hotel rooms in India and there is a scope for lot of growth. Many foreign hotel
chains are operating in India and continue to enter Indian market using different entry modes.
The hotels are operating in unique Indian marketing environment which has its own
opportunities to provide to the Industry owing to huge gap in different hotel segments. This
opportunity is tapped by the foreign hotel chains which see India as a favourable destination
for growth and survival. Indian market has evolved over the decades from the socialistic
system of pre nineties era when the production and distribution system was under strict
Government control. In post socialistic era of free market capitalism, Indian services and
manufacture sectors are reaping benefits of the enormous market potential. The Hotel
Industry in India too is witnessing tremendous growth because of the huge market potential.
Both local and foreign hotel chains are competing with each other in terms of location,
pricing and promotion. Most of the Hotel chains are using traditional cum technological
marketing methods to reach the customers.

The historical perspective of professional hotel service in India dates back to colonial times
when hotels were setup by British in cities like Calcutta, Mumbai, and Delhi and also in the
hill resorts of Shimla and Mussourie. The first five star hotel of India was built in 1908 by
philanthropist turned hotelier of India, Jamsetji Tata the founder of Tata Empire in Mumbai

The continued “Incredible India” campaign launched by Government of India has had a strong
impact on the tourist arrivals in India. The size of the Hotel Industry is USD 17 Billion, expected
growth rate from 2008 to 2009 is 12%, current supply of hotel rooms is about 110,000 hotels rooms
and current demand is about 150,000 hotels rooms.

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 (ii) Taj Hotels

Taj 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.

Jamsetji Nusserwanji Tata, founder of the Tata Group, opened the Taj Mahal Palace, a
hotel in Mumbai (formerly called Bombay) overlooking the Arabian Sea, on 16 December
1903. It was the first Taj property and the first Taj hotel. There are several anecdotal stories
about why Tata opened the Taj hotel. According to a story, he decided to open the hotel after
an incident involving racial discrimination at the Watson's Hotel in Mumbai, where he was
refused entry as the hotel permitted only Europeans. Hotels that accepted only European
guests were very common across British India then. According to another story he opened the
hotel when one of his friends expressed disgust over the hotels that were present in Bombay
then. But a more plausible reason was advanced by Lovat Fraser, a close friend of the Tata
and one of the early directors of the IHCL group, that the idea had long been in his mind and
that he had made a study on the subject. He did not have any desire to own a hotel but he
wanted to attract people to India and to improve Bombay. It is said that Jamsetji Tata had
travelled to places like London, Paris, Berlin and Düsseldorf to arrange for materials and
pieces of art, furniture and interior artefacts for his hotel. The Taj group has since then
developed and flourished, under the Tata Group.

In 1974, the group opened India's first international five star deluxe beach resort, the Fort
Aguada Beach Resort in Goa. In 1970s, the Taj Group also began its business in
metropolitan hotels, opening the five-star deluxe hotel, Taj Coromandel in Chennai, in 1974,
acquiring an equity interest and operating contract for the Taj President (now Vivanta by Taj
- President), a business hotel in Mumbai, in 1977, and also opening the Taj Mahal Hotel in
Delhi in 1978.

The group has been converting royal palaces in India into luxury hotels since the 1970s. The
first palace to be converted into a Taj luxury hotel was the Lake Palace in Udaipur, in 1971.
Other examples include the Rambagh Palace in Jaipur, Umaid Bhawan
Palace in Jodhpur, Falaknuma Palace in Hyderabad and Nadesar Palace in Varanasi.

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A part of the Umaid Bhawan Palacein Jodhpur is a Taj luxury hotel and it is a member of
the Leading Hotels of the World

In 1980, the Taj group opened its first hotel outside India, the Taj Sheba Hotel in Sana'a,
in Yemenand in the late 1980s, acquired interests in the St. James' Court Hotel (now
comprising Taj 51 Buckingham Gate Suites and Residences and St. James' Court, A Taj
Hotel) in London. In 1984, the Taj group acquired, under a license agreement, each of
the Taj West End in Bangalore, Taj Connemara (now Vivanta by Taj - Connemara) in
Chennai and Savoy Hotel in Ooty. With the opening of the Taj West End in Bangalore, the
Taj Group made its foray into Bangalore. The five star deluxe hotel, Taj Bengal in Kolkata,
was opened in the year 1989, and with this the Taj group became the only hotel chain in India
with a presence in the six major metropolitan cities of India, namely Mumbai, Delhi, Kolkata,
Bangalore, Hyderabad and Chennai.

Concurrently with the expansion of its luxury hotel chain in the major metropolitan cities, the
Taj Group also expanded its business hotels division in the major metropolitan and large
secondary cities in India. During the 1990s, the Taj Group continued to expand its geographic
and market coverage in India. It developed specialized operations (such as wildlife lodges)
and consolidated its position in established markets through the upgrading of existing
properties and development of new properties. Taj also set up the Taj Kerala Hotels and
Resorts Limited in the early 1990s along with the Kerala Tourism Development Corporation.

Ten hotels of the Taj group are members of the Leading Hotels of the World

Two hotels of the Taj group, namely Rambagh Palacein Jaipur and the Taj Mahal Palace &
Tower in Mumbai, were ranked in 2013 by Condé Nast Traveleramong its "Top 100 Hotels
and Resorts in the World”. In late 2013, the Indian Traveller magazine ranked Taj Lake
Palace in Udaipur and Taj Exotica Resort & Spa in Maldives as numbers 34 and 98,
respectively, on its list of "100 Best Hotels & Resorts".Condé Nast Traveler also ranked the
Taj Mahal Palace in Mumbai as number 13 on its list of "Gold Standard Hotels" in 2014.

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 (iii) MARKET ENVIRONMENT IN INDIA
The rapid transformation of the Indian marketing has been the result of the successive factors
like globalization, Information technology. Only those companies succeed that are best
matched to the marketing environment, the companies that deliver what people want and
delight customers. The winner is one who provides value for money to the customers and
hire executives who are aware of local marketing environment and have made for India
strategy. The Indian marketing environment fluctuates between the concept of “Two Indian
and many India’s premise”. While as the “Two India’s” has been interpreted as the nation
that is modern and medieval, a nation with two faces, rural and urban and a nation within two
nations “India and Bharat.” The economy of India has been slow because its leaders had
adopted Socialism – the concept which had a negative consequence on its growth and
prosperity. The negative impact of socialism started getting diluted only after the
economic reforms of 1990’s. This had a positive impact of the growth and prosperity in the
Industrial and service sectors. The growth in India is distinct from growth in the
other service sectors. While in other countries, it has been mainly manufacturing led growth,
in India it has been service led growth. India’s service sector contributes to as much as 56%
of GDP. The Indian consumer environment according to FICCI long backing 2003-2004 was
around $383. This has been mainly due to rise of Indian “market.” In simple terms “market
“means number of “buyers” or “people”. In the service sector, Tourism and Hospitality holds
an important place in India. It is emerging as the biggest sector for providing
jobs in India. The Travel and Tourism competitiveness report 2009 revealed that
tourism accounts for 2.3% of its GDP, forecasted the annual growth of 6.7%.

This marketing environment is made up of the Macro and Micro environments. Marketers
should consider both internal and external environment for understand the whole market
which they want to sale their products or services (Masterson and Pickton, 2004).

Normally, in the time of recession, customer would not spend too much money for overseas
holidays, vacation and travelling , because they see holidays is as a luxury, therefore,
probably customer prefer to change their consumption to short city break or domestic holiday
travel, moreover businessman may chose the lowest price to get an accommodation for their
business travel.

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Moreover, consumer spending power has diminished as well as consumers have had to
constrict their purse strings, although, levels of personal disposable income have been
maintained to a degree, as a result of interest rates’ historic low. According to Mintel (2010)
estimates that Personal disposable income stagnated in 2004 to 2009, the hotel industry has
been notably crashed by the recession.

However, the environment analysis, such as PRESTCOM, Porter’s five Forces, SWOT
analysis and Segmentation could be used to examine the effect in the recession. In order to
have a full positive reception of the environments of the hotel industry, this is the reason why
the models will be used in this report.

1) POLITICAL

The hotel industry had evolved very rapidly since the opening policy in 1978, after that the
economy has gradually transformed to a market-oriented one. The reform has created a much
better business environment for the hotel industry development.

According to Kotler (1996), The political environment is strongly affect hospitality industry,
political environment is made up of laws, government agencies and pressure groups influence
and limit the activities of various organisations and

Therefore, this proposal actually could stimulate consumer and offer them more opportunity
to holidays. Perhaps this might be good news to the hotel industry to fight in the recession.

2) REGULATORY

Regulation environment is protects companies from each other. While most businesses praise
competition, they try to counteract it when it affects them. Another way is try to restrict
companies dealing any unfair and guilty transactions. Furthermore, regulation also aims at
protecting consumer from unfair business practices. If unregulated, firms might make unsafe
or low quality product and services, be untruthful in their advertising, or deceive through
packaging and pricing.

Moreover, hotel taxes and restaurant taxes have become popular source of revenue for local
government. In many case, hotel taxes are supposed to be used to support tourism, however
the spending of this money has been subject to liberal interpretation.

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Therefore, hotel manager should make sure that those taxes designated to promote tourism
are used effectively.

3) ECONOMIC FACTORS

One factor that complicates the situation somewhat is the rupee weak status against the
Dollar. In July 2008, one dollar would still buy 50 rupees of commodities, However 1$ has
reach 70 rupees now, economic environment could be included by following elements:

Wage inflation – in the recession, the wage of labour might not be increased, it is depend on
the decisions are decided to cut the wage or increase the wage by manager. Therefore, hotel
manager should pay more attention to income distribution as well as average income.

Price inflation – because the recession, if economic decline, the commodity price will rise. It
will influence the decision customer make to travel or not.

Gross domestic product per capita – the most important economical element are the customer
purchasing power and spending patterns, GDP can Indicate these elements, because total
purchasing power depend on current income, price, savings, and credit, hotel manager must
be aware of major economic trends in income and changing consumer spending patterns.

Even in the recession, customers still prefer to take short break to reward them. According to
Mintel’s annual survey of spending priorities in 2009 showed that holidays remained the
leading concern for consumers, despite in the recession.

Furthermore, the leading priorities showed little change from pre-recessionary times.

4) SOCIAL FACTORS

However, even in the recession, a few people have not be affected, they still consume in the
luxury hotel. They did not care the money, just because their lifestyle is luxury. Although
those people did not change their consumption, most of customers still be affected by the
recession, therefore they might prefer to choose the budget hotel not the mid-range hotel if
they are travelling.

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5) TECHNOLOGICAL FACTORS

Nowadays, technology has significant affected the hotel industry in many ways, for example,
Travelodge launched a free iPhone application that allows users to locate their five nearest
Travelodge’s by GPS, and they can see availability and prices, and book rooms. Moreover,
customers can book their accommodation or check-in by Internet, or get the information
which are required by customers on new Platform, such as Facebook or Twitter, these and
other technological advances will help companies to be more effective in the marketplace,
however Internet penetration levels and the demographic breakdown might be make
operators’ use of this distribution channel ever more viable. If firms that adopt useful
technological advance, they will gain a competitive advantage.

6) COMPETITION FACTORS

Since hotel is also a service industry, human resource has become an indispensable element
to the market. If the turnover ratio of employees is lower, the centripetal of employees will be
strong. As a result, company will have the advantage of competition.

After that, the main substitutes of the Indian hotel market are the hotels which from other
countries. Customers may choose their visit destination from abroad, such as Singapore and
Malaysia. However, Country house hotels or Bed & Breakfast are also could be the threat of
substitutes of the Indian domestic hotel industry.

In fact, hotels find themselves with a different problem for their competitors, which is a high
barrier of exit and entry costs with the investment. Thus, the large capital investment required
to build a hotel sunk cost. Hotel may not meet all the debt payments, taxes, and other fixed
costs, but they can produce enough profit to cover their fixed cost. They perhaps operating at
a loss rather than close their door completely. However, when hotel oversupplying, but the
room supply remains the same numbers, as a result will be a price war for the whole industry.

7) ORGANISATIONAL FACTORS

A Hotel manager should decide how to engage the process of internal business, capability
and skills. Moreover, adjustment or development to adapt to customer needs and preferences,
for example, if hotel could provide high quality of service or doing some promotes activities
customer return ratio will be increased. When the people go to a hotel first time what they

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primary concern is the appearance of the hotel, then will be the service quality of the hotel.
But the problem which the hotel industry is facing now is finding qualified employees to
provide services that could meet the standards of the customer. Majority service employees
have lack of understanding of international service standards. This might because the hotel
industry was closed to the West for so long.

8) MARKET FACTORS

In the market sector, the most important thing is customer, firms should affirm the main
customers they want to strive and the market they segments.

The number of business travellers who choosing the budget hotel for their commercial trip is
increasing. Moreover, this trend starts at this time is match for the recession in 2008. Because
many enterprises have reduced their budget for commercial travel, therefore, the commercial
travellers used the budget hotel to in place of the mid-market hotels which they usually used
before the economic downturn.

Another consideration is the rising concern with being ‘green’ and the impact of frequent air
travel on the environment Consumers who want to reduce their carbon footprint and impact
upon the environment are increasingly opting to stay within the India. However, is that the
new concern for green issues is not completely beneficial? Tourists from overseas will be
equally concerned to cut their travel abroad, so this could also reduce inbound tourism into
the India.

Research is conflicting with some showing that interest in saving the environment is fairly
low priority for the majority of consumers and other studies confirming the idea that green
issues will become increasingly important (Key Note, 2009). Budget hotels have made
important investments in order to get closer the gap with the mid-market brands. However,
there are three top most improved brands for advertising awareness are namely, incredible
india.in, makemytrip.com, travelguru.com etc.

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 (iv) Major Government policies in the field

The expanding activities of the hotel industry have turned it into a multimillion-dollar
industry. Hotel industry consists of restaurants, lodging places, theme parks, event planning,
etc. and includes activities such as facility maintenance and direct operations including
servers, porters, housekeepers, bartenders, kitchen keepers, etc. Such services that are
provided by the hotels constitute to be the subject matter of laws that regulate the hotel
industry.

Until recently, there were not many stringent requirements of compliance attached to these
laws. Due to rise in the number of cases of food poisoning, rising concerns and public
conscience, these laws now demand a stringent compliance. Apart from regulating the areas
mentioned above, hotels are also obliged to protect their customers from harms that are
criminal in nature such as thefts, bodily harms, and even potential harms from terrorist groups

To open a hotel, there are various licenses that are required to be obtained. Such licenses
include

 Police License / Registration.

 A license under Shops & Establishments Act.
 A license under Prevention of Food Adulteration Act.
 Registration under the Luxury Tax Act.
 Registration under the Sales Tax Act.
 Registration under the Contract Labour Act.
 Registration under the Pollution Control Act.
 Registration under the Apprentices Act.
 Registration under the Provident Fund Act.
 Registration under the ESI Act.
 Entertainment License on Festival Occasions.
 License for Chimney under the Smoke Nuisance Act.
 Registration under the Weights & Measures Act.
 Factory License for Laundry.
 Central Excise License for Bakery Products.
 Registration & Permits under the Motor Vehicle Act for Tourist Coaches / Taxies.

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  Eating House License.
 Municipal Beer Bar License.
 License for storage of Diesel Oil.
 License for storage of Kerosene & Compressed Gas (LPG).
 Sign Board Directions, Neon Signs.
 License to deal in Foreign Exchange under FEMA.
 Cold Storage License, (if over 25 cubic ft.).
 License for Boiler & Generators and Mixers and Grinders.
 Bar License (Foreign Liquor).
 Dance License
 Mild Liquor License.
 Temporary License for Awnings & covering of Terrace during monsoon.
 Building Completion Certificate.
 Copy Right License for Playing of Music.
 Lodging House License
 Approval from the Department of Tourism, Government of India.
 Registration from GTDC for new projects under the Package Scheme of
Incentives.

Laws governing Hotel Industry

1) Establishment and Commissioning of Hotels

The first head of laws that govern the hotel industry include the laws regarding
commissioning and construction of hotels, restaurants, guest houses and other establishments
of such kind. These laws also include laws such as Foreign Exchange Management Act,
Industrial Licensing Policies, and land laws, etc. Hotel insurance policies, especially the
customized ones can fulfil the growing needs of the hotel industry. It can cover all its
establishments ranging from spa to guest houses and apartments, bed and breakfasts, etc.
Other insurance policies such as the standard insurance policy would cover risks and
damages arising from accidents, fire, natural calamity, etc.
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 2) The operation, management, and maintenance of Hotel Industry

The second head of laws that govern the working of hotel industry is related to matters such
as management, maintenance and the operational activities of hotels. Such laws include
insurance laws, laws regarding safety and security of workers, food and hygiene standards,
obtaining licenses, Food and Drug Administration Act, Shops and Establishment Act, etc. For
example, Acts such as the Food Adulteration Act would prohibit the sale of substandard food
items thereby protecting the customers from the potential harm caused by poisonous food and
protecting their interest by eliminating the fraudulent practices. The Food Safety and
Standards Act would set up criteria for manufacture, storage, distribution and sale and trade
of food substances so that they remain fit for human consumption for a considerable period.
The Legal Metrology Act would regulate the use of standards of weights and measures.

3) Taxation, Employment, and Contracts in Hotel Industry

The third set of laws that govern the working of a hotel are related to the contracts that it
enters into with other enterprises or employment contracts, for example, the Apprentice Act,
Employees State Insurance Act, etc. These laws also include the manner in which such
entities are taxed. Taxes may include income tax, service tax, expenditure tax, excise duty,
luxury tax, and entertainment tax, value added tax, etc. Legislations such as the Shops and
Establishment Act or the Employees State Insurance Act would aim at regulating the
relationship between employers and employees in the hotel. The former would lay certain
statutory obligations on the employers in matters related to wages, work hours, holidays, paid
leaves, provision for payment for overtime work, etc. The latter is a social security scheme
that would mandate the employers to protect the interest of the workers in times of
contingencies such as sickness, maternity leaves, physical impairment or injuries occurring
from the workplace, subsequent medical care. The Provident Fund Act mandates the creation
of provident fund schemes for the employees. The Apprentices Act shall govern the working
of apprentices in the Hotel Industry.

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 4) Other laws governing Hotel Industry

Other laws that may govern the working of hotels may include local law norms or other local
land norms or guidelines issued by the tourism industry such as approval of hotels at project
stage and classification & reclassification of hotels, guidelines for classification of heritage
hotels, Time Share Resorts (TSR), Stand Alone Restaurants, guidelines for apartment hotels,
guidelines for approval of guest houses, Hospitality Development and Promotion Board,
implementing a transparent system for the effective monitoring of hotel projects, ensuring
timely accrual of approvals / clearances / NOCs by the multiple agencies and facilitating the
implementation of hotel projects, expeditious clearances, etc. will enable completion of hotel
projects in time leading to enhancement of room availability for the tourists.

Hotel & Restaurant Approval & Classification Committee

The Hotel and Restaurant Approval & Classification Committee inspects and assesses the
hotels based on the kind of facilities that they provide. The two categories of hotels that they
inspect are first, hotel projects that are approved at the implementation stage and secondly,
the operational hotels which are classified into various categories. About the former, the
Ministry of Tourism after certain documentation provides project approvals that shall remain
valid for five years. Once the hotel reaches its operative stage, the approval ceases to exist
within three months. The respective hotel must apply for the classification during these three
months. Once the classification is obtained, it becomes valid for 5 years.

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 (v) Consumer buying behaviour models

To achieve success in the modern marketing, the marketing manager has to study
consumer behaviour because he can create, maintain and increase the demand for
his companies’ products only when he understand the feelings, desires, and
buying motives of his consumers. Thus, the buyer behaviour models are broadly
classified into the following categories:
 Economic model
 Learning model
 Psychoanalytic model
 Sociological model

1) Economic model
According to the economic model of buying behaviour, the buyer is a rational
animal and his buying decisions are totally depended on the concept of utility. In
other words, it explains an economic perspective of the customer. Here, consumer
analyses the pros & cons of purchasing a product. He considers the price, utility,
quality, durability, reliability, service etc., of the product and then takes a
decision. He purchases only those goods and services which are useful to him and
available at reasonable prices. Thus, this type of model is also known as rational
product buying motive.
2) Learning model
Learning is an act of perception, reasoning, thinking and information processing
about a particular product. It refers to the changes in consumer behaviour and also
the central topic in the study of human behaviour. All theories of buyer behavior
have been basically based on learning model namely, Stimulation- Response (or
more popularly known as SR model). The SR theory is very useful to modern
marketing and marketers. According to the SR theory, learning depends on drive,
cue (stimulus), response and reinforcement. People have needs and wants. They
are driven toward products and services (stimuli and cues), which they purchase
(response); they expect a satisfying experience (rewards and reinforcements) and
repeat behavior would depend on reinforcement received. The model is also
called as psychological model or Pavlovian learning model.

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 3) Psychoanalytic model
This model draws from Freudian psychology. It states that the individual
consumer has some deep motives that drive him to make certain buying decisions.
The buyer has some hidden fears, hidden desires and subjective longings
(personal wishes). His buying action can be affected by appealing to these desires.
The psychoanalytical theory is credited to the work of noted psychologist
Sigmund Freud. Freud introduced personality as a motivating factor in human
behavior. According to this theory, the mental framework of a human being
consists of three elements, namely: ID, super ego and ego.
The id (or the instinctive or pleasure seeking element): It is the group of inborn
desires that a man is born with. It includes the aggressive, destructive and sexual
drives of man.
The superego (or the internal filter): It presents to the individual the behavioral
expectations of society.
The ego (or the control device): It maintains a balance between the id and the
superego. The theory believes that a person is not able to satisfy all his needs
within the boundaries of the society. These unsatisfied needs create tensions in
an individual which have to be taken care of.
4) Sociological model
According to the sociological model, the individual buyer behavior is influenced
by society, close groups, social classes, population, income, castes, communities,
family life cycle and other cultural aspects. The buying decisions of individuals
are not totally based on utility; he has a desire to follow the environment. Thus,
as a part of sociological model the two important models are Nicosia model and
Howard Sheth. The Nicosia Model and the Howard Sheth Model belong to the
category of systems model, where a human being is analyzed as a system with
stimuli as the input to thesystem and behavior as the output of the system. The
Nicosia model of buyer behavior was presented in 1966 by motivation and
behavior expert Mr. Francesco Nicosia. The Howard Seth Model was presented
in 1969 by John Howard and Jagdish Seth.

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Application of consumer behaviour in Hospitality industry.

1 Problem Recognition

The buying process starts when a buyer recognizes a problem of making a choice
among the various options available which can satisfy his needs and desires.

2 Information Search

The major information sources are personal like friends and family, commercial like
advertising, websites, display etc., public like mass media, consumer organizations etc and
experiential like handling and using the product.

3 Evaluation of Alternatives
The choice of the hotel which the consumer will consider is dependent on various factors
such as location, price, cleanliness, atmosphere, approachability etc. The consumer will
finally short list the hotel which will satisfy all his preferable needs and desires.

4 Purchase Decision
The purchase decision of the customer is just on only dependent on his choice but all on the
attitude of others and unanticipated situational factors like the price of the product is not
worth, the location is beyond approach etc.

5– Post Purchase Behaviour

Post Purchase Satisfaction is very important factor in customer buying process, if the product
falls short of customer expectations the consumer will be disappointed and will lead to
dissatisfaction which will not only affect consumer retention but also affects the image of the
hotel.

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SWOT analysis of Taj Hotels

Taj Group of Hotels is international chain of luxury hotels owned by the Tata Group. The
hotel chain has around 100 properties across India as well as operations in countries like
Bhutan, Malaysia, Maldives, Nepal, South Africa, Sri Lanka, UAE, UK, USA, and Zambia.

Strengths in the SWOT analysis of Taj Hotels

Strengths are defined as what each business does best in its gamut of operations which can give
it an upper hand over its competitors. The following are the strengths of Taj Hotels & Resorts

 Catering to multiple segments: The Taj Group of Hotels has something that caters to
all segment. While the TajVivanta caters to the upper upscale segment, Taj the luxury
segment, Gateway the upscale and Ginger the economy segment. This ensures that
irrespective of income status all customers choose a Taj Hotel for their stay.
 Business Philosophy: The business philosophy of the Taj has primarily based on the
premise that not everyone is the same. Thus through clearly segmenting the market the
hotel has been able to clearly differentiate their offering not just to cater to different
income segments but also to different cultures.
 Amenities: The Taj Group of Hotels has a host of facilities in all their hotels. Their hotels
have a host of facilities for guests like rooms, spas, jacuzzi, multi-cuisine restaurants,
swimming pools, pubs, resto cafes, fitness centers and banquet hall. Some of the their
hotels also have mega convention centers with facilities to host conferences for a huge
gathering.
 Customer Loyalty programs: Quite unlike other hotel chains who look at loyalty
programs in the Taj Group the customer is given a chance to earn points from all stays
in all properties of the group. The key feature of their loyalty program is the automatic
upgrade to a higher class hotel within the group. For example, a customer who has been
frequently staying in a Ginger Hotel may get an upgrade to the TajVivanta or Taj if they
have sufficient loyalty points.
 Service Differentiation: The Taj research team has identified around 155 touch points
in customer service from the moment a customer enters into their property till the time

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 they leave from there where there is a face to face interaction. The hotel chain has
ensured that in each of these points there is a clear service difference.
 Focus on the business class: The hotel chain realized the scope for growth in business
class travel and thus opened Taj Residency a business class hotel. The hotel chain also
moved out to smaller towns and cities and this expansion has helped to increase
the customer base of the business.

Weaknesses in the SWOT analysis of Taj Hotels

Some of the key weaknesses of Taj Group of Hotels are:

 Customer Relationships: Hotels today need to be on their toes in terms of customer

relationship management. The key to success today is a compilation of information of
customers which enables them to understand them better and give personalized services.
This is proving to be extremely costly for Taj.
 Unequal growth across segments: While the economy and upper upscale segment were
registering good growth, the luxury segment was still lagging. However, the maintenance
and upkeep costs of the luxury hotels are relatively higher and the returns low. The hotel
has been pumping money from their medium segments for the upkeep of their luxury
hotels.
 The high cost of maintenance: The maintenance costs of hotels are growing and with
a network of almost 100 hotels across India and other properties in countries like Bhutan,
Malaysia, Maldives, Nepal, South Africa, Sri Lanka, UAE, UK, USA, and Zambia the
cost of maintenance is becoming unaffordable.

Opportunities in the SWOT analysis of Taj Hotels

Some of the opportunities include:

 Growth in smaller towns: The Taj Group of Hotels is an established player in the Indian
market and the hotel chain is expanding into smaller towns and cities a task which is
impossible for the multinational hoteliers.

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Threats in the SWOT analysis of Taj Hotels
Some of the threats include:

 Competition: The main competitors of Taj Group of Hotels are Oberoi, Sheraton,
Radisson, Hilton, Wyndham Worldwide, and Intercontinental Hotels.

Marketing Potential of Taj Hotels – Taj Hotels Marketing Mix

Taj Hotels Resorts and Palaces are the trading and brand name of Indian Hotels Company
Limited or simply IHCL. It is a publicly traded company of Indian origin. Taj Hotels is
associated with hospitality and tourism industry via its dealings in resorts and hotels. It was
founded in the year 1881 by its founder Jamshedji Tata and is a part of its owner company Tata
Group. Taj Hotels cater to a distinctive group of people with help of unmatched excellence and
leisure facilities. It faces competition from the following

 Hyatt
 Oberoi Hotels and Resorts
 Leela Group of Hotels

Product in the Marketing Mix Of Taj Hotels :

Taj Hotels is a chain of resorts and hotels for leisure, events and business and operates under
three brand names Vivanta, Gateway and Taj. It includes Beach hotels, Hill resorts, City
Hotels, Residential Hotel, Palaces and Wilderness Retreats.

Taj is a well-known brand name and offers impeccable services and quality products to attract
its customer base. All its rooms are spacious and richly decorated to provide elegant and
soothing ambience. Rooms are air-conditioned and have facilities like television, fridge,
wardrobe, laundry options, telephone and attached bathroom with hot and cold water. Other
important amenities include travel desk, swimming pool, speciality restaurants, spa, salon, golf
course in some hotels, free Wi-Fi, fitness centre, child care options, all-day dining facility and
conference hall equipped with latest facilities.

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Place in the Marketing Mix Of Taj Hotels :
Taj Hotels started its operations through The Taj Mahal Palace from Mumbai in India in the
year 1903 and with time extended its presence to one hundred and one hotels in sixty-four
destinations. Its resorts and hotels are located in cities like Bengaluru, Chennai, Kolkata,
Mumbai, Agra, Hyderabad, New Delhi, Srinagar, Udaipur and Surat with its headquarters base
at Mumbai in Maharashtra.

Taj Hotels has spread its international presence in the overseas market to include hotels in
places like Sri Lanka, Bhutan, Malaysia, Maldives, United States, United Kingdom, Zambia,
UAE, South Africa and Nepal. In the year 2006, Taj Hotels launched a new offering titled Taj
Safaris at Mahua Kothi in Bandhavgarh. It catered to individual needs by offering sumptuous
luxury and unmatchable services amidst primitive settings of the national park. Second wildlife
lodgings were established at Baghvan in Pench. Taj Hotels launched international Taj Safaris
with first overseas safari lodge at Meghauli Serai in Nepal.

Price in the Marketing Mix Of Taj Hotels :

Taj Hotels is one of the leading hospitality chains and has targeted business and leisure
travellers from an upper-class section of society. Its hotels are established at prime locations to
depict luxury living and extravagant facilities to its esteemed clients. Taj Hotels is a premium
chain that offers a perfect blend of immaculate services, high-end products and efficient
handlings. The brand has adopted premium pricing strategy for its five-star hotels because it is
aware of its brand power and realises that its loyal customers are willing to shed premium
amount for additional benefits and established a brand name.

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Promotion in the Marketing Mix Of Taj Hotels :

Taj Hotels has adopted several marketing strategies to promote its brand name in the
international and domestic arena. It relies heavily on word-of-mouth publicity as its satisfied
customers recommend it to friends, family and acquaintances. Taj Hotels was chosen as 27
“Great Brands of Tomorrow” by The Credit Research Institute. It launched The Taj at Apollo
Bunder, an epic book depicting the inspiring history of the brand. Taj Hotels is aware of its
corporate responsibility and takes part in numerous CSR activities. It has a two-year program
for hospitality training free of cost for youth belonging to BPL families.

In the year 2014, it provided free Wi-Fi access to each of its hotels across the globe and became
first hotel group from India to do so. As part of its promotional policy, Taj Hotels announced
significant enhancements in its existing Taj Inner Circle program. It has been the recipient of
many awards and accolades in recognition of its excellent services in hospitality industry.
During TripAdvisor Travellers Choice Award Umaid Bhawan Palace at Jodhpur was presented
Best Hotel in the World Award.

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CONCLUSION:

It is clear from the discussion that the Indian Hotel Industry is growing at fast rate. The
competition between the Indian and foreign hotel chains has led to the falling room rates.
While as some hotel chains have earned name and fame in Global markets many others
are being accused of lacking the service quality which does not match their Hotel
classification star category. The best role the Government can play in such a situation
is play a role of facilitator of growth only by encouraging foreign investment,
restructuring the tax schemes to make Hoteliers confident of investing, reduce the luxury
and service taxes so that prices of services offered by the hotels are lowered . The
Government should handover the Hotel classification process to private players like
FHRAI so that more transparency is ensured and only deserving hotels get the higher star
ratings.

Trends in perception of hoteling and spending pattern of individuals are changing constantly
day by day. Many changes are derived as per the financial condition of the individuals. Those
who belong to the higher income family, the spending on luster life gets change. So the hotel
owners and or hospitality industry has to keep their eyes open and look outside the world for
recent trends in the factor of development and subject to the need of the individual customer

The future for the hospitality sector looks very promising. With the growth of the economic
scenario gathering momentum and companies increase spending on travel, demand for the
industry is very likely to improve. With salary increases within the corporate world, leisure
travel and disposable income are likely to be on the rise. Further, the number of foreign
tourists coming to India is expected to reach USD 11.1 m by 2021 . The demand-supply gap
in India is very acute and there is need for more hotels in all major cities. The shortage is
especially palpable within the budget and the mid- market segment. There is an urgent need
for budget and mid- market hotels in the country as travellers look for safe and affordable
accommodation. The Indian hotel industry is expanding at a massive rate, with several
companies envisaging investment plans. Investment in Travel & Tourism is estimated at INR.
2.8 trillion by 2021 (implying a CAGR of 8.7 %), according to World Travel and Tourism
Committee (WTCC) estimates.24 Demand continues to rise in the hospitality sector due to
growing business and commercial activities; escalation of disposable income; the improved
portfolio of the international tourism sector; increased leisure time; improved transport
facilities; and technological advancements facilitating remote tour management from

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overseas. However, due to the cash crunch and high interest rates and the sector being highly
dependent on external factors, the investors and hotel groups are approaching fresh expansion
projects with caution. To solve these issues and to do away with the constraints being faced
by the hotel industry in addition to limited availability of land like procurement of multiple
clearances / approvals which are required from the Central and State Government agencies
for hotel projects which may be as many as 65 or more clearances/approvals are required by
hotel projects which varying from State to State, the Government has approved the setting up
of a 'Hospitality Development and Promotion Board (HDPB)' for hotel projects. Further, the
government has extended its full support to the hospitality industry by introducing friendly
legislation, a liberal policy framework, and support infrastructure and open-sky policies.

Key learnings from the activity

Get to know more about the tourism sector especially the hotels and Hospitality sectors in
India, there is a huge opportunity for the Hospitality Industry as India will become a
superpower in the near future and all the business meetings will be held in this five star
hotels where spending for luxury is necessary for the elite classes.

The company that we are chosen is Taj Hotels which is pioneer in this field and has
concurred market all around the world. Talking about Taj it is a symbol of luxury and
Quality, the target Audience are always Elite classes, Presidents and Prime Ministers of
Various countries. Their expectations and needs are always been satisfied by the Taj Group.

Taj has identified the target area, they classified it into two

 Tourists
 Business class persons,

the needs for both the classes are different, tourist may need a super luxury room with all the
facilities where as the business class persons might be looking for a calm place to dine with
their customers to discuss the business details.

So in both ways Taj has succeeded, so the learning is that satisfying the different customers’
needs are the key factor for success in no matter what the industry it is, Customers are the
kings and serving them way they wanted makes them come back to your place with pride.

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