The literature review section of dissertation supports in concentrating on varied question of study by analyzing the knowledge gap and it gives value on evaluating the previously published articles and literatures on the particular topic. The section aids in getting information from several sources and carry out a critical analysis of research area. The researcher will collect literature on SPG program of Sheraton Heathrow hotel and in this regards the company’s financial and annual reports along with online material will be accessed. These literatures will be reviewed to identify changes in the hotels through SPG program, such as benefits attained by management, increase in customer base and loyalty as well as revenue generated by organization. The evaluation of these articles or literatures will help in undertaking primary research in the further chapter of dissertation.
A shift has been noticed in the hospitality industry of entire world and it has changed towards more customers centric from the traditional approach to value provider services through new suggestions and ways to engross the consumers (Cahill, 2006). According to Saverio Scheri, hospitality organizations and gaming sectors recognize that they required developing focus of their customers. Casinos and hotels need to attract guests to their places and then make the complete experience exceptional. Developing a customer centric corporation means creating critical linkage among data acquisition, delivery and linkage.
At present many firms are focuses on consumer satisfaction as a pointer on their performance of delivered goods and services. Serving people is the main activity of hotel and being proficiently served is the reasonable hope of clients. The success level of hospitality business is determined by the extent to which customer satisfaction is created by its management. But satisfaction of customer is not only about service. When the other constituents, which round out the experience of guests are properly addressed then buyer’s satisfaction should be more.
In current business environment increasing the level of sales through various promotional campaigns and enhancing business process is a key factor in retaining consumers is a key driving force for many firms, measuring satisfaction of customers with increased amount of purchase provides a direction where the organization is actually proceeding (Butscher, 2002). This term is mostly considered as the satisfaction that a buyer feels when compares his or her expectations with the actual quality product or service acquired. To acquire a general image of consumer perception, a firm needs to measure the level of satisfaction of its target customers.
The Sheraton Heathrow hotel is a renowned hotel and is located near the London airport. The hotel offers easy accessibility into different locations of London and provides a 24-hour room service. The hotel is a large 3-storied building and is rated as one of the best hotels. It offers world class services to its guests and also grants lucrative facilities that are of high value in nature and provide to its customers in different range of packages (Starwood Preferred GuestÂ® Announces Redeem & Reward Promotion, 2012). The hotel provides premium deluxe rooms with fine dining restaurants, meeting and conference rooms, bars, fitness-centre and spa and banquet halls.
Starwood Preferred Guest Program:
The SPG program is held in esteem by most point’s collectors and avid miles and for very best purpose. The program has several useful options with its points as well as contains only few minor drawbacks. There are many hotel brands are being included under the SPG scheme, such as Four Points by Sheraton, Le Meridian St. Regis, Westin, W Hotels, The Luxury Collection, Sheraton, Element and Aloft. SPG incorporates over 1100 hotels from worldwide with and majority of them are located in Asia Pacific and North America.
The Starwood Resorts & Hotels, Inc and its award winning program, i.e. SPG has announced a new promotion where members can save 40%, 30% or 50% of their Starpoints on Awards of Free Night at 21 of the SPG program in most luxurious resorts in Canada and United States. According to senior Vice President of SPG, Chris Holdren that reward and redeem is a type of promotion in kind, which is provided by Starwood to their members an opportunity to stay in its hotels with the chance to save significantly on redemption. Redeem and Reward facilitates members to get Starpoint savings at some most coveted resorts including, W South Beach Resort, The St. Regis Aspen Resort and The St. Regis Bal Harbour Resort.
The SPG card provides different types of benefits to different members. For instance, gold members of SPG are able to select from following facility when checking into a resort:
Overall, it can be said that a huge new positive for a program is a long overdue for some “refreshing”. After seeing so much reduction in the space of airline, the guests find nice to see enhancements without any actual give back in advantages. Moreover, through this program since five years massive changes in number of customers of hotel has been observed and more and more people wants to get aligned with this program (Stephen, 2012). After using this program a feedback is taken from consumers that enable the hotel to incorporate and modify the service offerings according to the needs of its guests. This creates loyalty of hotels in marketplace and brings competitive edge to the organization. Further, with the help of loyalty schemes, like SPG, Starwood Hotels has able to gain good customer base among others. Sheraton Heathrow is one of them, which is able to fulfill satisfaction of customers adequately by following this program in their lodge (The Importance of Customer Satisfaction and Customer Engagement in Business Outcomes, 2010).
Sales and its activities are mostly short term and are designed to stimulate swift or higher purchasing of a particular brand, goods or service by customers or the traders. Increased level of sales has more of impact at a stage of maturity of a product and the mangers need to stimulate the sales by modifying one or more mix of marketing elements. In this context the SPG program offers numerous benefits to the organization and achieves an increased rate of sales for the company. The American Marketing Association (AMA) explained sales promotion as marketing activities other than advertising, personal selling, publicity that increases customers purchases effectiveness such as demonstrations and various selling efforts in a process.
In other words consumer gets dissatisfied when their expectations are greater than the performance of product (Anderson and Jr., 2013). An assessment of the gap between expectations of consumer and performance of organization is a basis to monitor the entire performance of company (Vavra, 2002). Organizations in order to increase the level of sales it is always needed an understanding regarding the operations of a firm; consumer satisfaction is formed by the correlation between a buyer’s expectations and their experience’s (AGBOR, 2011).
The increasing requirements of customers and travelers has made many of the SPG program and the data acquired in reflects in a increase in booking with the help of mobile and it helps in to move ahead in business. Through this program the members can avail distinguished benefits like directions, in room dining selections, incorporated social media, store all the relevant information about their SPG profile such as upcoming and previous stays, star point remaining balance as well as other details through text or email (Starwood Preferred Guest Program Launches App for Android, 2012).
According to Brandi, (2001) “Customer satisfaction is a judgment that any goods or services provides, it is considered as a pleasurable level of consumption that is related to fulfillment which includes levels of over or under fulfillment”. In other words a buyer always matches their experience with expectations they have with the organization. The development of sales promotional strategies needs that an organization must determine the best potential market and then chose the means by which it can try to sell to its target customers. According to Ertell, (2011) – It posits that sales promotional are a direct instrument that presents an additional value or incentive for the goods to the sales force or to the ultimate consumers with the main objective of creating an immediate sales effect. Acquiring high level of customer contentment is significant in a business because pleased buyers are most likely to be loyal and faithful and do make repetitive purchase using a wide range of services offered by a firm.
According to Blythe (2006) – Sales related activity, such as discounts, loyalty programs, local gifts, etc. is intended to generate a temporary increase in sales. It involves several communications activities to pursue additional value to customers, retailers, wholesalers and organizational stakeholders to stimulate immediate sales. Such efforts are usually geared towards stimulating goods interest, purchase or trail. It is precisely made to rise or boost swift sales and ultimately creates loyalty for business.
Acquisition of customer satisfaction is the actual feeling of contentment, which is being acquired by giving a balance between perceived products so that expectations of buyers can be fulfilled. As services are intangible and if requirements of customers are not met then the chance of negative word of mouth will probably increase and if the anticipations of consumers are not met then customer’s gets dissatisfied and business can lose the consumers (Management and Business Studies Portal, 2005). Other than this if performance of product matches the expectations consumers gets pleased and if it exceeds the anticipation buyer is highly contented or delighted. According to Ramirez, (2012) - The fact of buying modifies the dynamics of relationship. The customer views the sale as a favor i.e. conferred on the seller and in response debits in the account of seller. When the customers are not adequately satisfied with the services of hotel, they make complaints, which can be work in a positive sense as company can improve their operations as per the requirements of customers. In fact, business consultants of today’s contemporary environment urge businesses to view complaints of their customers as a gift.
According to Armstrong and Kotler (2002) – Customer promotion is a segment of sales promotion including free sample, wining contests, diverse price packs and sweep stakes. It is projected to enhance the sales of final ultimate buyers of the goods (Armstrong and Gary, 2004).
Keeping people pleased in business is considered as the best competitive advantage against competitors because loyal buyers are sometimes prepared to pay more and are excellent external marketers as well. The tactics of selling are very significant but equally important strategy in sales (Schreiner, 2012). The advantages are also compelling to ignore. Hence, satisfaction of customers is a standard manifestation that can be greatly applied in evaluating the consumption activities of consumers. It is considered as these services are made for people so that they can attain higher value against the price paid by them.
According to Zairi (2010) – “Customers are the ultimate reasons behind what an organization do and are very much depended on them”. In order to achieve a high sales growth rate it is important to acquire the loyalty of consumers which is determined with the help of different factors namely friendly attitude of employee with consumers, quality of service, value added service, appropriate service in billing, transparency and exactness in services and reasonable price. According to Philip Kotler (2004) – “Consumer satisfaction is an individual’s joyfulness or disappointment that is formed up by matching up the expectations of a consumer from the performance of product or service”. To attain loyalty of consumers it is must that firms meets out the needs and expectations of buyers up to a satisfactory level. Efficient quality of service will certainly induce the different demands of people and will aid in decision making process of buyers. If the actual services presented to customers are higher than their expectations then the buyer will be satisfied and will also go for a positive word of mouth.
A sales promotion is a marketing technique that is specifically designed to attract a consumer to take a precise action such as make a purchase decision or request for information. Sales promotion usually occurs for a limited time period to help in to create a sense of urgency. It offers a number of benefits to the owner of a small business organization. It could be done by offering a reduced price on any popular product, through this buyer away from competitors may ultimately help turn them into regular shoppers. In hotels sales promotion can be done in three ways:
Until some decades earlier, goods and services offered by firms were considered as the outcome of innovative minds of designing up engineers other than to comply with needs and wants of buyers. Later on due to increased competitiveness in market, disintegrated business borders, globalization in economy and ultimately increase in the level of expectations of customers the needs, attention and significance also increased (The Importance Of Measuring And Analyzing Customer Satisfaction, 2012).
The one only method for today’s company is to supply goods and services with increased qualities and value as it needs creativity and development in the area of services and investigation of needs and demands of customers. Assessment and providing buyers what they want can lead a firm towards enhanced brand loyalty; a factor which is important key for today’s organizations. The existence of different economic situations and problems, lack of adequate focus to buyer’s orientation culture, non-examination of efficient factors in consumer contentment, low rating quality of products and presence of competitive foreign goods could lower down a firm’s value.
In this context one of the customer satisfaction model i.e. provided by Kano will be reviewed below. The model known as Kano’s model for customer satisfaction offers extensive amount of information in this area. This model basically classifies attributes of products that are based on how they are viewed by buyers and their influence on customer satisfaction. This categorization is useful for directing in design decisions in that they specify when products are good enough. Kano’s model is divided into three main categories threshold, performance and excitement. A competitive product meets out the basic features, enhances the performance factors and includes as many enthusiasms as much possible at a cost which the market can tolerate. The diagram for the model is as mentioned below; it is basically divided into three main categories.
Threshold Attributes – These are the basic expected features and must be available in the product or service. By increasing the performance of these factors it results into decreasing outcomes in terms of satisfaction of consumers, but absence of these attributes may result into extreme dissatisfaction of buyers. In context with hotel, availability of bed and bath is considered as the basic requirements (Kano Model Analysis, 2007). However, if any of the basic requirements are missing it will ultimately result into negative word of mouth of customers.
Performance Attributes – It includes attributes for which more is considered as better and could enhance the contentment of customers. On the other hand a feeble attribute of performance lowers down the consumer satisfaction. These attributes will assist in designing the weighted needs against which product concepts will be analyzed. The amount which buyer is ready to pay for any goods or services is closely associated to performance attributes. By developing these features greater amount of improved customer satisfaction is being achieved. An absence of it reduces the level of performance as well as lower downs the customer’s expectations. In context with hotel industry the cleanliness of rooms, swiftness in room service and helpful nature of staff would be taken as performance attributes (Workforce Management Software for the Hospitality Industry, 2012).
Excitement Attributes – These are generally undeclared and unanticipated by consumers but could result into increased level in satisfaction of buyers, however its unavailability does not lead to dissatisfaction. These factors mostly satisfy the hidden needs about which people are unknown and in a competitive market where producers offer adjacent performance that focuses on unknown requirements could offer a range of competitive benefits. As these attributes are not expected by consumer’s lack of it does not bring in any issue in business. Excitement attributes are added to more and more competing goods and services and over the time becomes mainstream performance factor (Kano Model Analysis, 2007). In due course of time some of performance attributes becomes threshold factors as the promotion of products and services endeavor to reach ahead in competition.
The information acquired from this model specifically explains about the excitement, performance and threshold attributes, that aids in acquiring valuable information for development of an effective process in service offerings. Customer satisfaction is considered as the positive element emotional state i.e. reached by a consumer after purchasing a product or service. A customer is intended when they feel they have attained at least as much as purchasing experience as the effort they put in and when they reach up to the conclusion level that they are purchasing was as good as they perceived, then go for repetitive purchase decision making. By asking consumers about their level of contentment translates into increased sales, profitability and loyalty. On the other hand customers who are dissatisfied are less likely to purchase again and more likely to occupy the time and resources of management and pass on the negative feelings towards other customers.
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