The Marketing Mix in the Service Apartment Industry in Mumbai

The marketing mix is the combination of marketing activities that an organization engages in so as to best meet the needs of its targeted market. Traditionally, the marketing mix consisted of four main elements: product, price, place, and promotion. All the marketing mix elements are significant in their roles for predicting the marketing strategies of the Service Apartment industry.

In this study, the researcher focuses on ten important factors that possibly influence business traveller’s decision on serviced apartment selection based on Service Apartment marketing mix as illustrates below

The Service Apartment Marketing Mix

a)      Product

b)      Price

c)      Place

d)     Promotion

1 Product

Products in service industry refer to products and services that a Service Apartment can offer to customers. Products in Service Apartment can be either physical, tangible goods or a service that might satisfy a want or a need of a customer. It also consists of the customer’s experience which is believed to be one of the major influences on customer purchase behaviour.

In addition, branding is regarded as a product because the brand represents the image of an organization in the mind of a customer. In this research, Service Apartment products covered tangible elements of ‘facilities’, and intangible elements of ‘service’, ‘past experience’, and ‘branding’.

A product is a package, or bundle, of goods and services that comprise the total offering. For example, the purchase of a Service Apartment room includes the guest room, fitness centre, pool, restaurants, valet service, concierge, housekeeping service, etc.

A restaurant meal consists of the actual food, host/hostess, and waiters, etc. Finally, a travel experience consists of a chain of products and services starting at the time of purchase and ending upon returning from the trip. Everything in between, such as Service Apartment service, restaurants, and transportation (including taxis and buses), affect the overall experience

Variety of Facilities

A Service Apartment usually offers various facilities to serve the needs of business Travellers. Travellers considered ‘fitness facilities’ as an important factor in their choice of Service Apartment for male business Travellers. However, for female business Travellers, Service Apartment  room amenities such as ‘hair dryer’, ‘makeup mirrors’, and ‘skirt hangers’ were significant for them.

In addition, it was found that ‘safety and security facilities’ was among other factors ranking highest in the importance for the female business Travellers while selecting Service Apartment  choice because females tended to be concerned about security issues more than males. Lastly, ‘WIFI facility was another facility that Service Apartment usually provide in the rooms for their customers because seventy percent of business Travellers preferred to stay in Service Apartment locations with internet connectivity available

Service Apartment  business industry, a variety of facilities are essential and should not be underestimated because it might be a major influence on customers’ purchasing decision while selecting accommodations, especially the facility that suits the needs of business Travellers.

Service Quality

Service quality is a comparison of expectations with performance. A business with high service quality will meet customer needs whilst remaining economically competitive. The quality of service in Service Apartment industry is an important factor of successful business.

The existing trend of complete quality management in Service Apartment industry ensures the achievement of competitive advantage of Service Apartment companies and is therefore the subject of contemporary research into service quality in Service Apartment industry. The concept and the conceptual model of service quality are indispensable if we wish to understand the genesis of service quality and potential gaps in quality.

The delivery of hospitality service always involves the interactions of people, in particular the interactions between customers and front line staff. Since service quality has become a great differentiator among service providers, business survival and success of service providers are dependent on the delivery of superior service quality. In hospitality services, ‘staff service’ was believed to be one of the most important factors in determining Travellers’ overall satisfaction levels and their tendency of returning to the same Service Apartment s or accommodations

Experience

Past experience is something which will pull you towards giving a good word of mouth about the service provider as well as taking the service from that particular service provider again and again. Past experience has a lot of major influence on consumer purchase behaviour. If consumers are turned off the first time they walk up to the front desk in Service Apartment s, they are unlikely to return. Parasuraman in SERVQUAL model pointed out that ‘past experiences’ was important in determining the choice of Service Apartment s.

 This is to say that customers encountering good experiences were likely to return to use the same service again because of the impression they received before. Another related study focusing on the relationship between past experience and customer’s satisfaction stating that Travellers who were satisfied with the Service Apartment products and services were more likely to revisit the same Service Apartment again, while those who were unsatisfied would never come back again.

Brand

Brand is defined as the institutionalized preferences of a consumer for a product or service based solely on a brand name or logo. 78% of business and leisure Travellers in all demographic groups professed that they usually did not have time to investigate the quality of different Service Apartment. They usually stayed at the same Service Apartment brands they did last time and 56% stated that it was risky to stay at Service Apartment brands that they were not familiar with. Another study by indicated that 85% of business Travellers and 76% of leisure Travellers preferred branded Service Apartment s and accommodations over independent properties. Furthermore, the brand loyalty was important to both business and leisure Travellers in their revisit intention that they tended to consume the products or services of that brand repeatedly

2 Place

Location is a very important aspect in the Service Apartment marketing mix. Ideal Service Apartment locations have long been at the centre of travel networks and near destinations. The fastest-growing location type for Service Apartments is downtown, serving the growing number of business-oriented destinations such as office parks and company headquarters.

For a business, being in a place where the customers are is critical to the business’s success especially the Service Apartment industry. Location was among the most important factors desired by both business and leisure Travellers. This could be possibly because the vast majority of business Travellers chose the Service Apartment location in relation to their purpose of visits. Therefore, serviced apartments normally located in the prime locations which had easy access to business areas, shopping centres and embassies in order to serve the needs of business Travellers. In general, location of the service providers and their accessibility are very important selling point in hospitality industry (Kotler)

3 Price

Price is one of important marketing tools to attract customers to purchase their products (Kotler). Marketers normally adopt different pricing strategies to achieve their desired sales objectives. In the fierce competitive market, price reduction strategy is also commonly employed by marketers as a result of keen competition. However reducing price strategy to attract customers may not be effective. On the other hand, Service Apartment may need to focus on other areas they can improve in order to attract and retain their customers in the long run.

 In this study, ‘price’ was not included because the room rate of each of the serviced apartment was set based on brands (e.g. The Lalco Residency) with different pricing strategies to serve the distinct needs and lifestyles of the serviced apartment residents. The researcher intended to study other important factors, which were considered by the business Travellers while making purchase decision on serviced apartment selection.

4 Promotion

The promotion element of the marketing mix includes all of the communications associated with marketing a product or service. Promotion keeps the product in the minds of the customer and helps stimulating demand for the product.  The promotion mix consists of four elements: advertising, personal selling, publicity, and sales promotion. Advertising and publicity are forms of mass communication using a variety of mediums such as television, radio, newspaper, magazines, direct mail, and the Internet. Advertising is a paid form of mass communication with an identified sponsor, while publicity is a non-paid form of mass communication without a sponsor (i.e., it is free and objective). Personal selling is a form of interpersonal communication sponsored by the firm. Sales promotion is a short-term inducement to purchase a product or service. Some examples of sales promotions are contests, sweepstakes, premiums, and product bundles. 

Hospitality firms determine their promotion mixes based on their clientele and trading areas. Service Apartments tend to draw customers more from regional, national, and international markets. Therefore, most Service Apartment s advertises in national media such as magazines and television. However, the advent of the Internet has provided the smaller, independent Service Apartment s with a cost-effective medium to reach international audiences. There are also differences based on the market the Service Apartment is targeting. For example, larger Service Apartment s market their meeting and banquet facilities to meeting planners using sales people, direct mail, the Internet, trade shows, and trade magazines. In contrast, it is not cost-effective to use some of these same means for transient customers (e.g., personal selling), and the promotion mix is focused mainly on advertising and some sales promotions.

Advertising

Advertising is a way for companies to convey their messages to customers so that they could make informed purchase decisions as it is a practice used to inform consumers about products and services. A research stated that Asian Travellers placed a higher value on the factor of ‘Service Apartment advertising on TV and travel magazines’ than their Western counterparts. In addition, websites are becoming an important information source for both business Travellers and leisure Travellers in Service Apartment industry.

Incentives

Incentives cover a special program or promotion of marketing campaign that a Service Apartment offers to Service Apartment guests such as the ‘frequent traveller program’ in order to encourage their return visits.

The repeat Travellers are more concerned about the Service Apartment’s incentive programs, such as its frequent traveller program. Examples include ‘the Gold Passport Holder offered by Hyatt’, ‘the Starwood Preferred Guest by Sheraton & Westin’, ‘and the Marriott Honoured Guest Awards by Marriott’.

These programs normally encourage return visits and thereby improve retention rates by offering incentives for Service Apartment guests to purchase more frequently and in large volumes. However business Travellers placed more importance on ‘price’, ‘location’, and ‘amenities’ than ‘loyalty program options’.

Recommendations

Consumers are influenced by other people with whom they interact, and the effect of that influence can be extremely important. When considering hospitality consumption, recommendations from others become significant. This is maybe because in general we consume hospitality as part of a social group. Especially in accommodation industry, company’s recommendations play a vital role because business Travellers are always travelling and staying in accommodations due to company assignments.

However, recommendations from friends are also important as suggested that reference groups influence customer behaviour in several ways by influencing aspiration levels and playing a part in producing satisfaction or frustration.

In this study, the important factors in the Service Apartment marketing mix theories mentioned above are employed as factors in designing the questionnaire to investigate the top three most important factors for the Business Travellers while making purchase decisions on serviced apartments.