Chapter 1

INTRODUCTION

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Consumer Behaviour

Consumer behaviour refers to the decision processes and acts involved in purchasing
using a product. In order that firms could understand the consumer behaviour, there is the
requirement to create the marketing mix which will give optimum utility to customers,
therefore analyzing the what, where, when and how consumers buy (Parcon 2013). The
types of consumer behaviour are determined by level of involvement in purchase decision
and buyers’ level of involvement based on motivation. The first determinant focuses on
the importance and intensity of interest in a product on a given situation while the second
determinant deals with the information about a certain product and brand. There are
personal, social and economic risks and that the higher the risks, the higher the
involvement for a consumer (Schiffman et al, 2014).

Even so, consumer behaviour could be categorized as routine response or programmed

behaviour, limited decision-making, extensive decision-making and impulse buying.
Programmed behaviours are inclined for low involvement frequently to purchase low cost
items. These automatic consumptions need no researching and rigorous decision-making.
The second behaviour is the occasional purchasing of product which requires information
about unfamiliar brand hence a significant amount of time in gathering information. In
the third behaviour, high degree of economic, performance and psychological risks
assessments is considered while for the last behaviour, it necessitates no conscious
planning at all.

The Indian consumer seems to be undergoing a shift in terms of personality, buying

motives, interests, attitudes, beliefs and values when he or she is making a shift from
„kirana‟ stores towards shopping malls. In India, there is huge potentiality for the future
development of the retail industry as the market is growing, government policies are
becoming liberal and the technological developments in the country are favourable for
operations in India

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Shekar et al., (2016) studied the overall customer satisfaction, response of customers with
regard to the availability and quality of products and services offered at shopping malls
and the comfort level of the respondents towards shopping in the shopping malls. Sharma
(2012) research carried in Mumbai also assessed the overall customer satisfaction. The
researcher analyzed the response of customers with regard to the availability and quality
of products and services offered at shopping malls and the comfort level of the
respondents towards shopping in the shopping malls. On the other hand, research study
carried out by Yaaminidevi (2013) in Madurai city, Tamilnadu with a sample of 100
respondents focused on Facility Management like ambience, infrastructure and traffic
were analyzed particularly. She suggested that malls not only cater to the product needs
of the customers, but also a source of entertainment, recreation. Khare (2010) on a
different note researched the mall shopping behaviour of Indian small town consumers.
She focused on how these malls bring functional and experiential benefits and affect the
shopping behaviour among small town people, though they are unfamiliar with the
concept of malls. The findings show that men and women differ in their perception
towards malls on the issue of social interaction and the role of cultural restriction is
clearly visible here.

Ravindranet al. (2009) investigated decision-making styles like price consciousness,

quality consciousness etc., of Indian shoppers in shopping malls and the variations in
these styles across different demographic variables.

Factors Affecting Consumer Behavior

Purchasing behavior is the result of the complex interaction of all the cultural, social,
personal and psychological characteristics. These characteristics are essential for
marketers to identify interested purchasers and to satisfy their needs better. In this
context, to develop marketing strategies, marketers are supposed to understand many of
those factors to understand consumers with unique cultural backgrounds, and needs of
consumers in various markets. (Kolter. et al., 2015)

Most buyers pass through a series of stages to reach a purchasing decision. According to
Kolter, typically five steps are involved in consumption decision process: need

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recognition, information search, and evaluation of alternatives, purchase decision and
post purchase behavior. This model implies that marketers should pay attention to the
whole purchasing process rather than just purchase decision. Moreover as some purchase
decisions are less significant, some of these steps might be skipped by a consumer.
Information search is seen as the most significant part of the high-involvement decision-
making process. Thurs marketers are suggested to utilize a great deal of media sources
and various communicating manners to serve potential consumers

CONSUMER BUYING DECISION PROCESS

The decisions a consumer makes to purchase products and services are based on a
process of learning. This is an almost axiomatic statement to consumer educators and
those involved with consumer interest studies in general. Even though one assumes that
consumers' learning and decision making are related phenomena, this relationship has not
been systematically explored in consumer research. Relationships exist between an
individual's general style of learning and his or her specific style of consumer decision
making. These relationships have important implications for the development of effective
consumer education and informational programs. They are particularly relevant in
understanding how differences in individual approaches to learning lead to widely
different consumer decision-making styles.

Decision making is more complex and even more important for consumers today than in
the past. Consumers are besieged by advertising, news articles, and direct mailings that
provide an abundance of information, much of it with mixed messages. In addition,
increases in the number and variety of goods, stores, and shopping malls, and the
availability of multi component products and electronic purchasing capabilities have
broadened the sphere for consumer choice and have complicated decision making. An
individual with an analytical decision-making style would prefer to weigh all relevant
information before coming to a decision. An individual with an intuitive decision-making
style would prefer to make decisions based on instinct. Lastly, an individual with a
regret-based style would commonly feel regretful about his or her decisions, and would

4
be highly motivated to avoid that regret. Because these decision-making styles could
have parallels to maximizing and satisfying.

However, one area of concern that needs further attention is the behavior of consumers in
different cultures and economies at different levels of development. A free market
economy, assumes informed, educated consumers with the power to influence the market
through their rational decisions when confronted with choices in the market. Consumer
decision - making, thus, is of great interest for consumer educators and marketers
interested in serving the consumer. Several researchers in the field of consumer
economics have concluded that consumers follow different styles or rules in making
decisions when confronted with choices in the market.

The rapid transition of India to a market economy has increased the choices of products
and services available to consumers, thus increasing their confusion and need for
consumer education. At the same time, businesses in a global economy need to know

5
more about consumer behavior in different societies in order to effectively market their
products and services. This is very evident in India, the second most populated country in
the world and the number one contributor to world population growth of potential
consumers. A better understanding of Indian consumers for educational and marketing
purposes would contribute to meeting the needs of Indian consumers.

The implementation of the India Consumer Protection Act of 1986 is an example of the
increased awareness of consumers as an important force in the Indian economy.
However, recognizes that there is insufficient research about consumer behavior that can
be used for the development of consumer education curricula and for consumer
counseling. With the proliferation of goods and services in the past decade, decision-
making is more important than ever for consumers in India.

The general tendency has been to develop classifications and analytical partitioning of a
product's target consumer group, either according to their socio-demo types or according
to psychological typing; for instance, the pleasure seekers, the value seekers, the novelty
seekers, the bargain hunters or whatever. Essentially, this method is one of division and
hinges mainly on finding the most appropriate basis for dividing up the mass of
customers and sorting them into more manageable groups. Of course, to think of
marketing as the task of finding them and doing something to them is the height of
managerially attitude and corporate arrogance, and yet another mental trap. It is by no
means enough to impinge upon the perceptions of the consumer through powerful
persuasion and hi-tech communication. Participating with them in a co-evolution of the
product to use the more current thinking on the subject there is a need to bridge the
current chasm or disconnect that exists between management understanding or mental
models and consequent actions.

Indian consumers analyzed to determine the decision-making styles and the objective is:

 To determine the decision-making styles of young Indian consumers in the

market.

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  To compare the decision-making styles identified in this study with the results of
similar studies in other countries.

The brand manager can thus understand the likely relative importance of the various
elements of the mix under his influence (pricing, packaging display, in-store production,
celebrity endorsements, personality promotions, price-offs or whatever) in driving the
consumer to the category per se and to choose his brand in particular. The copywriter,
media and account planners in the agency too would be able to sharpen their tools of
persuasion to clearly extract maximum value by focusing on the right appeal, tone of
voice and so on.

The designer and R&D person can translate the actual experience back into the elements
of product or service design that create the best experience for the consumer. Such a
model could perhaps be captured best in narratives and anecdotes and verbatim
transcripts of actual conversations with users and buyers. It is not a statistical model. It
might in many cases be amenable to the boxes-and-arrows format of a relationship
diagram.

Purchase
decision

Attitudes Unanticipated
of others situational factor

Purchase
intention

Evaluation of
alternatives

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In the case of consumables, there is a need to introduce variants after careful research or
introduce a feature which could be an outcome of technology. Internal costs and
profitability aspects are required to be studied in depth before a brand plans the variants,
especially in a crowded market. Creating a brand image with relevant brand associations
is vital for a brand which attempts to diffuse a new concept. If this aspect of consumer
behaviour is not employed, the brand would just end up conveying the concept and the
follower brands may capitalize on the category awareness created by the pioneering
brand.

Delhi and Gurgaon saw some of the initial mall developers become parking lot operators
as well by charging exorbitant parking fees from all visitors. Rentals, rather than going
down with more malls coming up, started moving up even as the quality of services
within the malls started deteriorating. In this context, therefore, it is somewhat surprising
that questions are already being asked, albeit in whispers, whether shopping-malls can
survive and operate profitably in India.

Many tenants lament about the low percentage of conversions from those who walk
through the portals of these malls, and casual observers routinely find shopping-bags
missing in the hands of the supposed shoppers visiting these malls as an indicator that the
initial euphoria about shopping in the malls is already on the wane and that consumers
are reverting to their traditional shopping-destinations. There are some myths and some
realities about these observations. It is, indeed, true that many Indian retailer tenants in
the shopping-malls have now become familiar with terms such as footfalls, conversions,
average transaction value, and repeat customers.

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 CHAPTER 2

COMPANY PROFILE

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 OYO

OYO Life is a branded network of hotels in India. Oyo life currently operates in more
than 120 Indian cities including Delhi, Gurgaon, Jaipur, Mumbai, Bangalore, Hyderabad,
Goa, Chennai, Kolkata and others. OYO is present in major metros, regional hubs, leisure
destinations and pilgrimage towns. Oyo life provides standardized hotel rooms with
features such as an air-conditioned room, complimentary breakfast and Wi-Fi with 24x7
customer service support. Guests can use the Oyo life App for booking rooms on the go.
They can also order beverages and request room service through the app. Hotel owners
who partner with OYO Rooms are connected via world’s first tablet based property
management App and become part of the OYO brand. According to a research carried
out by CB Insights for The New York Times, OYO Rooms is among the companies that
may be the next start-up unicorns. The company is backed by investors like the Softbank
Group, Green oaks Capital, Sequoia Capital and Light speed India.

Vision and Values

Vision:
To change the way people stay away from home.
Standardized
Oyo life promises to provide the same amenities and the same awesome experience
across all its rooms.
Affordable
OYO offers rooms at prices that no other player in the budget segment offers today.
Technology Driven
OYO uses technology to link all its functions and provide the customer a seamless
awesome experience.

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ABOUT OYO LIFE

Oyo life is India’s fastest growing branded network of budget hotels founded by young
entrepreneur Mr. Ritesh Agarwal on 2013. Within a short span of time, OYO Rooms
currently operating in more than 100 Indian cities including Delhi, Gurgaon, Mumbai,
Bangalore, Hyderabad, Goa, Chennai, Kolkata are few to name. Similarly, OYO has been
trying to be present in major Metros, Regional hubs, leisure destinations and pilgrimage
towns. OYO Rooms provides standardized hotel rooms with features such as an air-
conditioned room, complimentary breakfast and Wi-Fi with 24x7 customer service
support. Guests can use the OYO Rooms App for booking rooms on the go. They can
also order beverages and request room service through the app. Hotel owners who partner
with OYO Rooms are connected via world’s first tablet based property management App
and become part of the OYO brand.OYO Rooms, commonly known as OYO, is an
Indian hotel brand that owns and operates as well as aggregates standardized hotel rooms.
It currently operates in more than 200 Indian cities and in Malaysia.

Products and Services offered by OYO:

HOTEL BOOKING
A traveler can book a room online at Oyorooms.com and can choose to opt for online
payment or pay at the hotel.

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Evolution and Funding

The journey of Oyo life was started when Ritesh Agarwal dropped a college and
launched his first start‐up Oravel Stays Pvt. Ltd. in the year 2012. Oravel was designed as
a platform to enable listing and booking of budget accommodation. Being an enthusiastic
entrepreneur, he soon realized that the budget hospitality sector lacked predictability.
Therefore, he converted Oravel to OYO Rooms in 2013 with an aim of offering
affordable and standardized accommodation.

The company has raised multiples rounds of funding, the last one being an impressive
USD 25 Million funding from Light speed Ventures, Sequoia Capital, Greenoaks Capital
and DSG Consumer Partners in March 2015 and provides the same amenities and the
same experience across all its rooms at prices that no other player offers across so many
locations.

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 Table-1: Funding of OYO Rooms
Year Amount Funding Source
2012-December $ 5 Million Venture Nursery

2013 $0.1 Million Thiel Fellowship

2014-Febreury NA Light speed Ventures
2015-March $ 25 Million Light speed, Sequoia and others

2015- July $100 Softbank

2016-August $90 Million Softbank And Others

2017-April $250 Million Softbank and others

Growth

OYO Rooms started with one city and one hotel (Oyo life Huda City Centre) in
Gurgaon in May 2013 and has seen a tremendous growth. With whopping budget hotels
under its branded network across the India, Oyo life ‘growth has been nothing short of
phenomenal, and the rapid expansion has meant that the funded start-up now owns
India’s largest branded network of hotels

Strong customers’ feedback and loyalty encourages the company to redouble its growth
efforts to bring the OYO experience to as many Indian travelers in as many different
cities as possible and at the earliest.

As a leader, Oyo life has created a new paradigm in the hospitality sector through an
asset-light managed marketplace model. This innovation coupled with sound execution
has been recognized by several national and international accolades including TIE Lumis
Business Excellence Awards, India International Travel Mart Award and Lufthansa ET
Now Runway to Success Award. Now the company has more than 1000 employees
including 10-20 people from IIMs, more than 200 people from IITs, HBS and Ivy.

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Table-2: Detail of Oyo life’ Properties
Year Number of Property (Hotels)
2013 January 1 Property
2013 June 3 Properties
2014 July 13 Properties
2015 August 2000+ Properties
2016 June 5500 Properties
2017August 7000 Properties

Revenue Model
Oyo life books a part of the hotels inventory by paying monthly rent in advance at
discounts (Expenses)

These hotels are put to match the standardized quality like free Wi-Fi, clean toilets etc.
(expenses)

These rooms are offers to the customers at OYO room’s website, application and various
OTA platforms

Users buy these from at a predetermined price (revenue)

The expenses also includes the heavy expenses on promotional activities to increase the
brand quality among the users as well as the remuneration of the employees. It provides
heavy discounts to the customers. These discounts often results in prices which are lesser
than the cost price of these hotels and results in losses.

Precisely Oyo life is running in loss. Despite heavy losses Oyo life is able to expand in
the market as it is backed by several investors like light speed India, Sequoia Capital,
Green oaks Capital and Softbank Group. The price sensitivity in this case is high due to
high competition and customers are also awarded about different services and can easily

14
compare the quality and price with its substitutes. Oyo Rooms refer clients to hotels and
get a percentage as cut for this transaction. They also have deals for minimum guaranteed
customers and can offer its clients beneficial deals and discounted rates. All its
transactions are swift-cash variety and it works in favor of the company as they are able
to realize their revenues at a faster pace. They provide different services at different but
definite prices. Budget hotel room prices varies from rupees 999 to rupees 4,000 but a
floor price is kept and the competitor’s price according to their quality is also kept in
mind. Leisure rooms are priced 15-20% higher than business rooms, and 20-30% lower
than the nearest three-star hotels. It tries to meet the budget of an individual and set up his
accommodation accordingly. Price of the rooms are also set according to their
geographical locations, categories and inclusions. Rooms at tourism spots are generally
high priced compared to a room in a general city.

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Organization Structure:

Figure: Organization structure

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2.7BUSINESS MODEL of OYO Rooms:

OYO Rooms is an aggregator that provides a market place for online hotel booking
similar to Uber, which provides a marketplace for online cab booking. Started in the year
2013, OYO is turning into India’s largest chain of hotels. It has a very simple business
model where it adopts hotels, get them to follow certain basic standards of services,
features, staff, pricing and security and then list them on its web portal and sells them
under its brand, earning a part of the profit from the deal. Currently the company is
following invest and expand mode. Till now it has received funding from the big firms
like Sequoia and is estimated to be worth $400 million after its latest round of funding in
August this year, where it received $100 million.

OYO’s asset free business model has now challenged the capital heavy hotel industry.
The company does not own any of the properties listed on its site. It only invests in
marketing and quality improvements for the hotels under its banner. The model provides
a win-win situation for both the small budget hotels and owners of spare properties, who
do not have enough capacity, network and knowledge of smart marketing. OYO has
helped them increase their bookings by more than 100% thereby improving their yields.

2.8 Unique Selling Proposition of Oyo life:

Finding hotels in India is not a big problem, the major issue is the trust factor and
predictability of services. OYO founder, Ritesh Aggarwal, capitalized on this basic need
by providing standardized hotel rooms across the country. The complete model of hotel
industry is based on consumer experience, and with the beautiful amalgamation of
technology and quality control mechanisms has improved customer experience even at
economical rates. The complete model is designed keeping in view the consumer
experience, right from booking to finding hotel to standardized services to high
technology room service option. To further enhance the customer experience, company
has Ked with Airtel to provide its customers a world class in-room internet and TV
viewing experience at no additional cost.

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Oyo life has also started two new sub-divisions to increase its hold on the market:

OYO Premium – Moving from the budget room segment, company has also started
premium roomservice in metro cities to increase its customer base. OYO premium
rooms will cater those business travelers or families who are looking for premium
services and are ready to shell out few extra bucks for higher comfort.

OYO SMART: Introducing this concept which includes fully ownership of reservations
by OYO whether it is by normal walk-in, any OTA like MMT, GOIBIBO,
CLEARTRIP, and YATRA.COM.

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INTRODUCTION

The hotel industry involves high degree of interaction between employees & guests and
so provides many opportunities for service failures to occur. Service quality issues have
been of concern to researchers for close to twenty years & no. of projects focused on
hospitality industry. For example, McColl-Kennedy & White (1997), Pizam& Ellis
(1999) considered consumer satisfaction in hotels & mismatch between expectations &
perceptions of Service Quality. In terms of measurement O’ Neill (1996), used
SERVQUAL (Parasuraman et al., 1988) in hotels in no0rthern Ireland used it in hotels in
Korea. Alternative measurement tools for the hospitality industry were developed by
Wong et al. (1999) for hotels in Australia (HOLSERV) & by Knutson et al. (1991)
(LODGSERV).

3.2 SERVICE FAILURE:

Integral to the consideration of the provision of quality service is service failure &
recovery. Service failures are inevitable and occur in both the process and the outcome of
service delivery. They include situations when service fail to live up to the customers’
expectations (Michel, 2001). Service failures have been categorized by Bitner et al.
(1990) according to the Employee behaviors when failures occurs, relating to: the core
services; request for customized service; and unexpected employee actions.

There are various consequences of service failures, namely:

 Dissatisfaction (Kelley et al., 1993);

 A decline in customer confidence (Boshoff, 1997);
 Negative word-of-mouth Behavior (Bailey, 1994);
 Loss of revenue & increased costs (Armistead et al., 1995); and
 A decrease in Employee morale & performance (Bitner et al., 1994)

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SERVICE RECOVERY:

If service failures does occur, then what can service providers do to recover? “Service
recovery involves those actions designed to resolve problems, alter negative attitudes of
dissatisfied customers and to ultimately retain this customers.” (Miller et al., 2000, p.38),
and “It includes situations in which a service failures occur but no complaint id lodged by
customers.” (Smith et al., 1999, p.359).

Successful service recovery has significant benefits. It can:

 Enhance Customers’ perception of the quality of the service & the organization;
 Lead to the positive word –of-mouth communication;
 Enhance customers’ satisfaction; and
 Build customer relationships, loyalty & impact on profit.

Service recovery can also be poor and ineffective with the consequence that the customer
is let down for the second time: This may lead to loss of confidence in the organization
and possible defection, together with the spread of negative word-of-mouth
communication.

SERVICE RECOVERY STRATEGIES:

Actions that service providers take, in response to defects or failures, comprise a

combination of psychological recoveries and tangible efforts, and have been researched
by no. of academics. The strategies they identify may be classified as:

 Apology
 Correction
 Compensation
 Follow-up
 Acknowledgement
 Explanation
 Exceptional treatment; and
 Managerial intervention

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From the research evidence, it can be concluded that the type & magnitude of service
failures depend on the industry and service (i.e. outcome or process-based).

3.5 Loyality:

Loyality of a firm’s customer has been recognized as the dominant factor in the business
organization’s success. This study helps us in extending our understanding of the
relationship between customer loyalty, customer satisfaction, and image. This is of
considerable interest to both practitioners and academics in the field of hospitality
management. One of the greatest challenges facing hotel organization today is ever-
growing volume and pace of competition. Competition has a major implications for the
customer, providing:

 Increased choice;
 Greater value for money; and
 Augmented levels of service.

There are two strategies most commonly used by hotel managers in order to gain a
competitive advantage; they are:

1. Low-cost leadership through price discounting , and

2. Developing customer loyalty by providing unique benefits to customers

Loyal customer is a customer who repurchases from same service provider whenever
possible and who continues to recommend or maintain a positive attitude towards the
service-provider.

LOYALTY DIMENSIONS:

There are two dimensions to customer loyalty: Behavioral & Attitudinal

The behavioral dimensions refers to the customers’ behavior on repeat purchases,

indicating a preference for a brand or a service overtime. Attitudinal dimensions, on the
other hand, refer to a customer intention to repurchase and recommend, which are good
indicators of loyal customers.

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RELATIONSHIP BETWEEN CUSTOMER SATISFACTION AND LOYALTY:

Customer satisfaction considers to be one of the most important outcomes of all

marketing activities in a market-oriented firm. The obvious for satisfying the firm’s
customer is to expand the business, to gain a higher market-share, and to acquire a repeat
and referral business, all of which lead to improved profitability (Barsky, 1992).Studies
conducted by Cronin & Taylor (1992) in service sectors such as hotels found that
customer satisfaction has a significant effect on purchase intention. Hence, it can be
concluded that there is a positive relationship between customer satisfaction & customer
loyalty.

.3 RELATIONSHIP BETWEEN IMAGE AND LOYALTY:

An Organization’s Image is an important variable that positively or negatively influences

marketing activities. Image is considered to have the ability to influence the customers’
perception of the goods and services offered (Zeithaml and Bitner, 1996). Thus, Image
will have an impact on customers’ buying behavior. Image is considered to influence
customers’ minds through the combined effect of advertising, public relations, physical
image, word-of-mouth and their actual experiences with the goods and the services
(Norman, 1991).

CUSTOMER SATISFACTION

CUSTOMER
LOYALTY

HOTEL IMAGE Above areas of Standards consists of sub-

standards which is to be checked every

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week at audit of Property so that standards are being met and guests are not feeling any
kind of trouble.

Below are the few samples of OYO toiletries provided by the OYO to guests to increase
their level of hygiene, so that their guests don’t suffer with any kind of infection after
experiencing OYO?

Figure Toiletry Kit

Product Retainbility:Here we are primarily concerned about the retainbility of

customers or Guests in order to increase the Customer Experience (CeX) along with
increasing the delight of guests. Better the CeX of guests, more the retainbility and
repetitive of Guests. Hence, this step play a pivotal role in operations department.In an
Operations Department of Oyo life, CeX is quite important .Higher the CeX, more the
Un-happy Guests and lesser the retainablity of guests.

Parameters of CeX& Un-Happy% Guests are decided by feedbacks that guests give at the
time of Check-out at the hotel. Feedbacks are in the form of Ratings of 1 – 5:

1 star: very Bad Experience

2 star: Fair Experience
3 star: Average Experience
4 star: Good Experience
5 star: Excellent Experience

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1 star and 2 star are considered as negative feedbacks in Oyo operations. Un-Happy % is
calculated as total number of negative feedbacks (1 star & 2 star) divided by Total
number of feedbacks.

Methodology for Retainbility:

 Sharing Real Time Information: So on the daily basis we used to interact with
each and every guest personally ensuring there is no such problem and if the
problem arises try to solve the problem engaging with property manager to ensure
guests remains satisfied.
Some of the concerns of the guests were:

I. Room is not the same as shown in the OYO APP.

II. Complimentary breakfast is not good or sufficient to the number of
persons.
III. Rude staff behavior.
IV. Delay in the order.
V. OYO kits not available.
VI. Some of the Concerns of the Properties Manager were
VII. More number of guests entering on few guest booking.
VIII. Early check-in was not possible because it is subject to availability.
IX. Guests checking out late from the mentioned time.

These were the some concerns that used to arise on day to day basis and by engaging
with both customers and with property managers and sharing real time information with
our cluster manager and property manager to find out what is convenient to both guest as
well as property manager, guest remains satisfied &happy and the manager also don’t
faces losses.
 Feedback Call: Regular Feedback call from Centre team are made on daily basis
to guests at the time of Check-Out in order to ask their respective feedback
regarding the services at the OYO. Based on these attention, guests feels good
that he is being cared.

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  Public Relations: It Includes meeting the guests personally at specific timing and
interacting with guests so that guests should feel the sense of caring. Secondly,
Building Good Relationships with the Stake-Holders and Property Managers so
that if in any case Guests need help, PMs are ready to provide them solutions.

 Property Manager Incentive (PMI) Scheme: Since, OYO executives are not
always present at full time near guests but person who is every time near to guests
are Property Managers (PMs). So, Keeping in consideration of increasing the
delight of guests , PMI scheme was launched .Under this Scheme , for every 5
STAR rating in feedback call of guests, PMs are to be Rewarded by INR 100.
This Cash was to be given at instant to PMs so that they could better work on
experience of guests arriving at their property.

“Get a 5 star and take away Rs 100”

Below this Picture of (OYO 034) Hotel Satya Shree who in total got INR 2600 in cash
from OYO as they scored twenty six 5 star rating and hence increased the delight
percentage.

Figure: PMI Scheme

Limitations of PMI Scheme:

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 I. This Scheme was only for Short Term i.e. only for 9 Days.
II. Property Managers were giving services only for the sake of money only
otherwise they don’t care.

III. After this scheme ends, situations will be same as earlier.

Analyticallyit can be described as:

Nature
Public Relations
Antecedents PMI Scheme Outcomes
Dis-satisfaction Satisfaction
Timings of
Un-Happy Guests Interaction Delighted Guests
Happy guests
Sharing Real time
Information

INPUT PROCESS OUTPUT

Business Development:

OYO in Katra came up with a new concept called “SMART”. Earlier there used to be
Dynamic contracts along with that OYO also introduced a new contract called Smart
Contracts.
What is Dynamic Contract?

26
 a) In dynamic contracts Property owner has an option to give limited number of
inventories to the OYO or how much they want to give, with the freedom to block
the OYO inventories anytime so that they can rent their room from any other
platform and could generate more revenue.
b) In dynamic contracts, OYO generally don’t make any investment
c) There is mutually consent with the property owner that how much percentage of
share OYO is going to take from each booking. This revenue sharing percentage
is decided between the Demand manager and the property owner.
d) Most of the bookings in dynamic properties are not confirmed so there are more
chances that the owner is going to suffer loss as their room might remain vacant
otherwise they could have rented their room from any other platform.

What is SMART Contract?

a) In Smart contracts OYO captures and take away all the inventories of the property
with a contract of ensuring that it will provide the whole booking and whole
demand to their property through their platform.
b) OYO takes all the responsibility of the bookings and ensure property owner
regarding the demand.
c) Property Managers are provided by the OYO at company’s salary.
d) OYO in smart properties also make investments for building up standards for their
room as well as for the overall development of the property starting right from the
entrance.
e) In Smart, all the booking are confirmed bookings and there are less chances that
the guest will not come and this also saves property owner from running into
losses.

“SMART” Property instead of Dynamic or Basic Concept. This Smart Property concept
has many advantages and it is a newly launched concept in katra. Till 30th June 2017,
there are 6 Smart Properties.

Name of the SMART properties in Katra

27
 1. Hotel Satya Shree.
2. Hotel Royal Krishna.
3. Hotel The Etilier
4. Hotel JMK.
5. Hotel New Shradaa.
6. Hotel Kanta International

All these are working excellent and above 3 properties are giving a fruitful result to the
OYO in terms of Delight Percentage and overall Profit i.e. GMV (Gross Market Value).

Although it’s a win-win situation for the property but there are many challenges for BD
Team to make ensure that Owners are convinced with that as Katra Market is UN-
Predictable such as Off Season , Peak season , Super Peak Season and on that seasons
Both PM’s and owners don’t bother.

There are some Questions that are asked by Owners to BD Team.

 How much Rooms will get sold out in a day or in a month?
 How will a SMART benefit me (owner)?
Features of SMART Property:
 After Property being live & Active, Hotel will be shown in web-portal as well as
APP on top as a priority.
 On Every Booking, the Amount will be shared which will be decided mutually
such as (80 – 20) %, (85 – 15) %.

 80 % - ORR (Owners Rack Rate)

 20 % - OYO Share
 If in any case, Bookings are made by other OTA, then
MIGRATIONS are done by OYO.
 Owns only Reservations Department nor food nor any other.
 It could be cancelled within 1 Year at any time. T&C Apply.

28
  OYO provides “minimum revenue guarantee” to the property
owner that OYO will generate a minimum revenue of the said
amount from your property.
 Also proper branding as well as OYO dollops was put up in each
Smart property with OYO logo present in front of each property.
 PM’S are given by OYO.

Figure SMART Property

Figure KTR034

29
SALES / DEMAND:

Increasing the Inventory of Rooms requires Demand of rooms also. We sat for ten days at
Katra Railway station and realized thatapproximately 30% of its business was from
online bookings and remaining 70 % business was coming from direct bookings in Katra.

OYO being an online aggregator working on B2B business model in Katra was focusing
on its betterment of Online Platform as well as on how to gain advantage over its existing
online Competitors and other online portals.
But OYO soon realized Inspite of its direct competition from other platforms like
Goibibo, yatra.com, make my trip.com etc. there was also an indirect competition which
OYO was facing in Katra.
This indirect competition was from local agents called Touts, and touts was indirectly
eating the business of OYO in accommodations.
OYO soon realized this was the untapped opportunity where OYO couldn’t be able to
reach till now, OYO soon has to capture this because OYO was letting others to eat this
major proportion of business revenue in Katra.
OYO was getting direct bookings but the major business of that direct bookings was
taken up by the Touts whom OYO named “PROMOTERS”.
OYO needs to come up with some strategy in order to capture this untapped opportunity
and business of Promoters from where OYO was facing major indirect loss in Katra.

Capturing this indirect business Opportunity

OYO in order to take up this business opportunity came up with a strategy that in order to
take up Promoters market we need to tie up with Promoters itself.
So OYO in Katra came up with a new scheme called “OYO BUDDY”.

OYO BUDDY
OYO created awareness through its OYO BUDDY campaign among the Promoters be a
part of OYO and become an OYO buddy.OYO let Promoters to work under our company
and enjoy various incentives and instant 30% of the commission of the booking amount

30
will be immediately transferred to their bank accounts.This was the tactics that the OYO
played in order to take up promoters because promoters earlier used to get commission
after a week or even after a month from the property owner for giving them bookings and
also the commission proportion was not that much what OYO was offering.

With this Campaign OYO motivated Promoters and gave them various reasons to be a
part of OYO because they were not only getting the Commission out of the bookings but
also various incentive schemes such a

 Instant 30% of commission directly to Bank accounts.

 An amount of Rs 5000 after making the first 5 bookings.
 If the booking amount reaches 5000 an incentive of Rs 500
 If the booking amount reaches 15000 an incentive of Rs 2000
 If the booking amount reaches 30000 an incentive of Rs 4000
 If the booking amount reaches 50000 a Cooler
 If the booking amount reaches 100000 a TV.
 If the booking amount reaches 5, 00,000 a Bike.

Now for capturing the promoter’s network and to make it effective a planning needs to be
formed that how the promoters are going to work for us. For this purpose only OYO
organized an event in Katra on 12th July 2017, called “OYO BUDDY” the purpose of
organizing this event was to make up proper count of promoters who are going to work
for OYO as well their induction and training will be done on the same side.Also it was
also mentioned that first 100 people getting registered under OYO buddy will get a cash
amount of Rs 500 plus and induction kit which included instructions as well as OYO T-
shirt plus a refreshment. People registering after a count of 100 will get cash amount of
Rs 200 and other mentioned refreshments.

31
Figure Event venue

Figure Advertisement OYO Buddy

32
Below are the samples of how the awareness was created amongst the promoters
regarding an event, a detailed information regarding event benefit, requirements of the
event, venue as well as date of the event was available on these pamphlet’s as well as on
holdings in their regional languages so that they could understand easily plus phone
numbers was provided in order to make them more clear regarding the concept.

33
 CHAPTER 3
RESEARCH METHODOLOGY

34
Objectives

 To study seeks to identify the determining factors of customer’s decision making

in OYO Life.
 To main objective of the study is to measure and assess the factors influencing
decision making in OYO Life.
 To study will identify the relationship between customer’s satisfaction level and
frequency of usage in OYO Life

Scope

To know about the Operations of OYO Life

To know what kind of activities are done in hotels sector.

To know about the customer response and behavior towards the Oyo life.

To expand network of contacts with various stakeholders, owners and vendors.

To apply business concepts and theories to real-world decision-making.

RESEARCH PROCESS:
Before embarking on the details of research methodology and techniques,
it seems appropriate to present a brief overview of the research process.
Research process consists of series of actions or steps necessary to
effectively carry out research and the desired sequencing of these steps.
1. Formulating the research problem
2. Extensive literature survey
3. Development of working hypothesis
4. Preparing the research design
5. Determining the research design

35
Data Collection
By observation through personal interview
1. By questionnaires
2. Execution of the project
3. Analysis of data
4. Hypothesis-testing
5. Generalization and interpretation
6 .Preparation of the report

RESEARCH PROCESS:-
The research was carried out as per steps of consumer research process.
The figure below depicts a model of consumer research process.

STEP1: DEFINE THE O

Define the Objectives of the Research

BJECTIVES OF
G AND EVAL Collecting and evaluating secondary data

Designing a primary research study

Collection of Primary data

Processing and Interpretation of Data

36
 Therefore to achieve the objectives of my research I have used
quantitative method for research.

Research Design

The research follows an Exploratory Research approach since the subject is relatively
new in India. To analyze the propositions, an empirical Survey of adopters of digital
wallet services was conducted among consumers of Oyo life.

Research Instrument-A structured questionnaire for the study. Items selected for the
constructs were primarily adapted from previous studies to ensure content validity.
Modifications weremade to the scale to fit the purpose of the study.

Mode of Data Collection-

The questionnaire was administered by personal and telephonic interview and in some
cases questions were mailed to respondents. A purposive sampling method was used to
consciously select customers who meet the criteria of having used OYO services in the
last one year. The respondents were selected from educational institutions, shops, offices
and households.

Sample and sampling methodology

- Most of the sample respondents belong to Delhi NCR region, the urban populations
residing in the metro cities of India show uniformity in their attitudes and temperaments,
hence the choiceof Delhi NCR can be taken as an appropriate representation of the Indian
urban population. In total 55 questionnaires were distributed, of which 50 valid
questionnaires could be retained for analysis purpose.

37
LIMITATIONS

The limitations are as follows:-

1. Some customers refuse to co-operate and do not disclose their
Genuine opinion.
2. Customer information is highly confidential, so organization
doesn’t disclose it properly.
3. Respondent’s answers might have influence or bias.
4. Information is collected from the customers and dealers only.
5. Meeting to the Guests is tough job, because they are very busy.

38
CHAPTER 4
ANALYSIS

39
 ANALYSIS

1. Where did you hear about The Oyo Life?

Travel Agent 20
Internet 22
Newspaper/Magazines 5
Others 3

25

20

15

10

0
Travel Agent Internet Newspaper/Magazines Others

Interpretation
The above diagram explains the various sources in which each and every customer gets
information about The Oyo Life concerned. Here, 20 respondents gained information
from the travel agents. 22 respondents get informed through Internet. Newspaper and
magazines helped five respondents for the same. While the remaining three respondents
are concerned with some other media which are not explained in the above table.
Customer expectations are prominently influenced by controllable as well as
uncontrollable factors, from the point of view of the service firm. The controllable
variables are advertising and contact personnel whereas the uncontrollable variables are
past experiences of the customer and word of mouth communication. Perceptions are not
driven merely by service quality. Advertising past experience and contract personnel’s
performance also influence the perception of customers.

40
2. Are you a regular guest here?

Yes 41
No 9

No
18%

Yes
82%

Interpretation
Yes says 41 respondents in response to the question of the regularity of their visits to the

Hotel. While nine of them are not the regular visits of this Hotel and agreed upon this

fact.

41
3. You are currently on any package. Are you aware of the benefits of the package?

Yes 38
No 12

No
18%

Yes
82%

Interpretation
There are 38 respondents who are ready and sets for a new package like promotion

package, distribution package etc, and 12 respondents are not ready for the same and not

even think about it.

42
4. Please indicate your views about The Oyo Life:
1 2 3 4 5

Greeting on arrival 17 20 8 3 2
Personal Attention 5 9 25 7 4
Quality of rooms 7 8 20 10 6
High Standard Cleanliness 20 20 10 0 0
Safety 14 28 8 0 0
Menu selection and food quality 9 19 17 2 3
Atmosphere and ambience 20 10 10 0 0
modern equipment 8 8 10 10 14
Excellent Décor 10 26 14 0 0
Good value for money 20 20 6 1 3
The Oyo Life offer is a bundle of features. Each part of the product has its own role in

contributing to the perceptions of customers. A customer who reserved a Hotel

accommodation for five days may have hundreds of interactions – right from the greeting

arrival, to facilitating services performance, supporting services performance and their

consistency, co-customers, events and so on. Every activity should reflect quality

performance. Therefore rather than in bits and prices budget Hotels should develop a total

view of the service products to perform quality. Service firms often feel that the pricing

of services is a complex decision making area. The basic reason for this complexity is

that the price perceptions and price sensitivity of consumers is not the same for goods and

for services. The factors influencing the consumer decision process in relations to price

vary significantly. Budget Hotel management should consider the differences in selecting

pricing methods and strategies to various consumer segments.

43
5. Do you feel The Oyo Life is cost effective?

Yes 40
No 10

No
20%

Yes
80%

Interpretation
Majority of the respondents thinks that their Hotels are more cost effective than any other

Hotels near by. While 10 of them don’t think so and not feels that their Hotels are of cost

effective.

44
6. Do you think the Oyo Life always deliver the right services at the right time in the

right manner?

Yes 42
No 8

No
16%

Yes
84%

Interpretation
THE OYO LIFE always deliver the right services. In this survey, 42 respondents support

this fact and they agree that they deliver the right service at the right time in the right

manner. While eight of them dissatisfied with matter and doesn’t think that it is at its

best.

45
7. Why do you The Oyo Life?

Service differentiation 18
Price differentiation 22
Product differentiation 7
Homely Atmosphere 3

25

20

15

10

0
Travel Agent Internet Newspaper/Magazines Others

Interpretation
The reasons for The Oyo Life is different and varied with each and every respondent. 18

of the respondents think that service differentiation is possible through the Hotels. 22

respondents think it will do the price differentiation. 7 respondents found out that there is

chance of product differentiation through these Hotels. 3 of the respondents likes its

homely atmosphere and consider it an important feature of these Hotels.

46
8. Employees of Oyo Life are customer-friendly?

Attributes No. of Respondents

Yes 40
No 8
Can’t say 2

Can't Say
4%
No
16%
Yes
80%

Most of the respondents (80%) agreed that the employees of Oyo Life is customer-

friendly. Here, feel that they find Oyo Life more customer-friendly as they feel whenever

they need something in case of urgency, they are ones who are great help to them and

their attitude is good.

47
9. What is the level of understanding of service problems of the customers?

(1 – Very Poor, 5- Excellent)

Excellent 13
Good 20
Average 11
Poor 6
Very Poor 1

25

20

15

10

0
Excellent Good Average Poor Very Poor

Interpretation

The level of understanding of service problems of the customers is excellent according to

13 respondents. 20 respondents think that it is good but 11 nos. of them ranked it as an

average one. 6 respondents completely ranked it as very poor and not even upto a

minimum mark.

48
10. Is there anything in particular you liked or disliked about the Hotel?

Very satisfied 12
Somewhat satisfied 20
Neither satisfied nor dissatisfied 8
Somewhat dissatisfied 10
Very Dissatisfied 0

25

20

15

10

0
Very satisfied Somewhat satisfied Neither satisfied nor Somewhat Very Dissatisfied
dissatisfied dissatisfied

Interpretation

Most of the respondent’s liked and satisfied with facilities provided by the Hotel. Here,

12 respondents are very much satisfied with the concerned Hotel. 20 of them are

somewhat satisfied

49
11. Would you recommend Oyo Life for others?

No
8%

Yes
92%

interpretation

In this survey, 98 respondents agreed that the recommend Oyo Life for their relatives and

friends.

50
CHAPTER 5

FINDINGS

51
 FINDINGS

• 48% customers earned between 20001-35000 rs per month.

• Out of 100 customers, 55% were Males and 45% females

• 68% of customer’s think of OYO Rooms while reservations for hotels.

• 78% of customers are having troubles with finding a budget friendly hotel.

• 85% of them heard of OYO rooms and 15% of them have not heard.

• 18% of them heard of OYO rooms from Digital Advertisement and 82% of them heard from
friends or others.

• The above graph depicts the opinion of the consumers, 51% of them travel to discover new
cultures and 33% of them travel to learn more opportunities.

• From the above graph 69% people would not download an app 31% of them would.

• In the above graph only 20% opt for OYO Premium, while remaining of them would prefer OYO
Budget.Hence majority of people are looking for OYO Budget.

• From the above graph we can say from a sample of 100, 91% of them would consider going
for OYO Elite in future and 9% may not buy

52
 CHAPTER 6
Recommendation

53
RECOMMENDATIONS

It becomes convenient for the guest to avail of the benefits if they are told about them in
advances. The packages has been prepared with lot of hard work and thinking, to make it
a real success the guests should know about the benefits so that they can after they leave
advertise for Oyo, through verbal comments on the packages. Retention of the Oyo in the
minds of the customers in terms of their services, ambiences, and image has to be
constantly reminded to them, and for that, the Oyo have to resort to serious advertisement
and image enhancing campaigns. For the guests it has been suggested that the various
corporate guests should be requested to give their views on the Oyo services, quality etc.
in an unbiased manner and should also be asked to give suggestions on how else to
improve to their services, what facilities they should like to be included etc. This should
be well taken care of an appropriate action should be taken.

OYO should give more focus on Demographic Condition, Market & Geographic
Condition like Demand, Supply, Business, Locations, and Clients as they vary from city
to other city.

Oyo Life should take considerable time before changing the strategies to ensure that the
results are seen before the changes are made.

OYO should go for a short stay.

54
CHAPTER 7

CONCLUSION

55
CONCLUSION
In review this internship has been an excellent and rewarding experience. I have been
able to meet and network with so many people that I am sure will be able to help me with
opportunities in the future. One main thing that I have learned through this internship is
time management skills as well Team work.

When I first started I did not think that I was going to be able to make myself work eight
hours a day, six days a week. Once I realized what I had to do I organized my day and
work so that I was not overlapping or wasting my hours. I learned that I needed to be
organized and have questions ready for when it was the correct time to get feedback.
From this internship and time management I had to learn how to motivate myself through
being in the ground for so many hours.

I came up with various proposals and ideas that the company is still looking into using. I
enjoy this line of work and hope the company reaches Fortune 500 list one day. I will
continue to work hard in my position and hope to continue to learn about the industry and
meet new people. This was an excellent experience and I hope that other interns got as
much out of it as I did.

There is a dearth of research in determination of factors affecting customer‟s satisfaction

in OYO Lifew service. The study develops better understanding of customer‟s decision
making factors in context to OYO rooms stay. The findings ensure that through
maintaining important factors and quality services, OYO service vendors can easily retain
customers. The research showed that the satisfaction level will bring customer‟s
frequency of usage. The demographics are significantly affecting the frequency of using
OYO Life. The research will help OYO Life to have a comprehensive, holistic and
clearer understanding of factors that influence the satisfaction level of Indian consumer

56
 CHAPTER 8

BIBLIOGRAPHY

57
 BIBLIOGRAPHY

 Anand M., Ramanathan S.K. and Viswanath R., The New Laws of Attraction,10
Business World, 22 January 2016

 Etzel M.J., Walker B.J., Stanton W.J. and Pandit A. (2013), Marketing – Concepts
and Cases – 12th edition, McGraw Hill, pp. 246-247.

 Schiffman G. Leon &Kanuk Leslie Lazar (2015), Consumer Behaviour, Pearson

Education

WEBSITES:-

 https://www.oyorooms.com/blog/
 http://crs.oyorooms.com/users/sign_in
 www.isba.org.uk/isba/filegrab/Advertising-and-consumer-
behaviour.pdf?ref=33 –
 www.krepublishers.com
 https://www.oyolife.in/
 www.economywatch.com

58
ANNEXURE

59
60