Description
In most developed countries, about 80% of the workforce is employed in the service sector. Service sector industries include education, retailing, tourism and hospitality, medical and hospital services, as well as communications and construction services.
Competitive marketing strategies of selected
hotels: an exploratory study
D.J. Petzer, T..J. !teyn "
P.#. $ostert
%&!T'%CT
(rganisations continually seek ne) )ays to ac*uire, retain and
increase +usiness, since the cost of losing customers is rising. !ervice
organisations such as hotels need to put in place competitive marketing
strategies to improve their competitiveness and thus retain customers.
(nce demand is created, a hotel needs to manage this demand as )ell
as its capacity to deliver.
This study investigates the importance that hotels attach to executing
competitive marketing strategies, as )ell as managing supply and
demand. The study also determines )hether or not hotels of different size
and o)nership type differ in their vie) of the importance of carrying out
these functions.
%n intervie)er,administered in,office survey )as used to collect data
from hotel managers in #auteng.
-otel managers across the +oard consider all competitive marketing
strategies as important. !ignificant correlations exist, ho)ever, +et)een
the importance attached to certain competitive marketing strategies and
the size of hotel , as )ell as the hotel o)nership type.
.ey )ords: competitive marketing strategy, hotel, services marketing, competitive
advantage, sustaina+le competitive advantage, positioning, service life
cycle, supply, demand, capacity
Prof. Petzer and Prof. $ostert are %ssociate Professors in the !chool of &usiness $anagement at the /orth,0est
1niversity, Potchefstroom. Prof. !teyn is %ssociate Professor in the Department of $anagement, !chool of &usiness
at Cameron 1niversity, 2a)ton, (klahoma, 1!%. 3,mail: daniel.petzer4+useco.monash.edu.
!outhern %frican &usiness 'evie) 5olume 67 /um+er 7 7889 6
D.J. Petzer, T..J. !teyn " P.#. $ostert
:/T'(D1CT
/
In most developed countries, about 80% of the workforce is employed in the service
sector. Service sector industries include education, retailing, tourism and hospitality,
medical and hospital services, as well as communications and construction services
(c!oll, !allaghan " #almer $%%8& '(). *y the early +000s, it was estimated that
services already accounted for ,+% of the gross domestic product (-.#) of developed
economies, and /+% of the -.# of developing economies (0ill +00,& +'/). 1he
hospitality industry was e2pected to grow by 3.+% and the tourism industry by '.$%
in +00, (Economist Intelligence 4nit +00/& $0,5$$0). 1he hospitality industry
has grown phenomenally since +00$ and has been driven by both leisure and
business demand (6loppers +00/& +8). 1ourism in South 7frica contributes
about /% to the -.# (.ikeni +00$& /$%) and can thus help to raise the national
income, the level of employment, the balance of payments and foreign e2change
rates. 0otels differ in style and si8e, some having up to 800 bedrooms. 1here are
full5service establishments and medium5si8ed business5class hotels, while others do
business in the budget sector. 9inally, there are the small country inns (canus
+000& $($). 0otels accounted for (,% of total accommodation sales in South
7frica in +00'
uromonitor International +00/).
;rganisations continually seek new ways to ac<uire, retain and increase business,
because the cost of losing customers is rising. Service is an important factor in
retaining clients. 1he role of service is more important than ever, and is e2pected to
become even more critical with time (!hoi " !hu +00$& +8%). 0otels that have the
ability to attract, satisfy and thus retain customers are more likely to survive than
hotels that do not do so.
Successful customer retention allows the hotel to build relationships with its
customers (=eichheld " Sasser $%%0& $0/5$08> 0offman, 6elley " !hung +00(&
((').
6urt8 and !low ($%%8& (805(8$ " '0() are of the opinion that, irrespective of
the efforts of service organisations to introduce competitive strategies to attract
customers and efficiently manage the supply of services they offer, customers do not
always purchase from the same organisation 5 nor do they always remain loyal.
1he ob?ective of this study is to establish the views of hotel management about
the importance of competitive strategies and managing supply and demand.
.ifferences in these views between the management of differently owned hotels,
and of different si8es of hotel, will be determined.
7
Competitive marketing strategies of selected hotels: an exploratory study
T-3('3T:C%2 &%Ck#'(1/D
1he theoretical background to this study focuses on the competitive marketing
strategies that hotels could utilise in order to attract customers. It also looks at the
strategies that hotels could implement to manage the supply of, and demand for,
services.
Competitive marketing strategies
It is said that organisations in the tourism industry have been slow in adopting the
principles of marketing, even though these would enable them to improve their
performance and customer retention (7ppiah57du, 9yal " Singh +000& %3 " $0%).
9or a service organisation such as a hotel to ac<uire customers, it is important that
marketing strategies be deployed to improve its own ability to compete with other
hotels, gain a competitive advantage and thus retain a greater number of customers
(7nderson " @inc8e +000& ,3> !haharbaghi " Aynch $%%%& '%> 0ill " Bones +00+&
$+(> 0itt, Ireland " 0oskisson +00$& /> 6urt8 " !low $%%8& (08> a $%%%& +/% "
+3$> #assemard " 6leiner +000& $+).
Competitive advantage and sustainable competitive advantage
!ompetitive advantage can be viewed as the value an organisation is able to create to
differentiate itself from its competitors (.ubC " =enaghan $%%%& +85((). 1he value
that is created by an organisation is measured by the price customers are willing to
pay for its particular service (#assemard " 6leiner +000& $$+). If customers perceive
the service as producing the re<uired benefits, they will purchase that service, and,
more importantly, will continue to do so over time (Dood +00'& /%).
0itt et al. (+00$& /) view competitive advantage, and sustainable competitive
advantage, as more or less synonymous. 1he authors define it as EsomethingE that
occurs when an organisation puts a value5creating strategy in place. 1his should be a
strategy whose benefits cannot be copied, or which would simply be too e2pensive to
copy.
7nderson and @inc8e (+000& ,3) define sustainable competitive advantage as the
ability to be successful over time. Success is based on the organisationEs ability to rely on
the skills and assets it owns. 7ccording to !haharbaghi and Aynch ($%%%& '%),
sustainable competitive advantage meets current competitive needs without harming
the ability of the organisation to meet its future needs. Sustainable competitive
advantage has three different EorientationsE. 1he first is a conservation5orientation,
which is rooted in the idea that no organisation has unlimited resources. 1he
;
D
.J. Petzer, T..J. !teyn " P.#. $ostert
second orientation is needs5based since the economic activity of the organisation is
concerned with the needs of its customers. 9inally, it is future5oriented, or focused
on the long5term enhancement of resources to gain advantage.
7aker (+00$& $(') considers that four factors are needed to create a sustainable
competitive advantage& firstly, the product strategy, the positioning strategy and
the production strategy with which the organisation competes> secondly, the assets
and capabilities of the organisation that form the basis for competition> thirdly, the
markets where the organisation competes> and, lastly, the competition with which
the organisation has to contend.
6im and ;h (+00'& 33) are of the opinion that the competitive advantage of
an organisation is the result of the resources that the organisation has developed
internally. 7s with all organisations, hotels differ in terms of the resources that they
possess or have access to. 1he competitive advantage that a hotel possesses depends,
thus, on how the hotel develops and employs its resources. 7 chain of hotels might,
for e2ample, gain competitive advantage through a flawless reservations system
developed for the chain. -iven the current business landscape, it is necessary for
organisations to keep ahead of competitors by utilising strategies of differentiation.
.ifferentiation is accomplished through gaining 5 and sustaining 5 competitive
advantage (!olgate $%%8& 80). *randing seems to be the only sustainable
differentiating strategy that hotels might use. 7 sustainable differentiating strategy
re<uires the hotel to bond emotionally with customers and focus on building long5
term relationships with them. 0otels might accomplish sustainable differentiation
by continually providing consistent brand messages (!ai " 0obson +00'& +035
+0,).
c.onald (+00+& '30) states that even though an organisation is able to gain a
competitive advantage, it is easy for a competitor to match that organisation
and draw alongside it. a88arol and Soutar ($%%%& +%0 " +%+) propose that the
organisation can sustain its competitive advantage only if barriers to imitation are
put in place. 1hese barriers prohibit competitors from copying the organisation. If
competitors are unable to copy an organisation, its competitive advantage may well
become sustainable in the long run.
Positioning
#ositioning is an important strategy that an organisation might utilise to create, and
sustain, competitive advantage (7nderson " @inc8e +000& +0%> *elch " *elch +00'&
/$> !ravens, Aamb " !rittenden +00+& 8> Aovelock +00$& +00> #almer +00$& $,,).
;nce a service organisation has identified its target market, the ne2t step is to clearly
position its service offering. 1he organisation should first of all identify the basis on
<
Competitive marketing strategies of selected hotels: an exploratory study
which it wants to compete, and then position its services in a clear and uni<ue way
(eek, eek " :nsor +00$& $3%).
It is important to establish the different positioning criteria along which service
offerings can be positioned. 1hese criteria include (7aker " Shansby $%8+, cited in
*elch " *elch +00'& /+5/'> 1rout $%%/, cited in 6otler, *rown, 7dam " 7rmstrong
+00'& (3/> !low " *aack +00$& $(0> Dind $%8+, cited in #almer +00$& $,%5$80)&
F Specifc product or service attributes. 7 hotel promotes to
business travellers the
fact, for e2ample, that it is located in the heart of a financial centre.
F Benefts or needs. 7 hotel decides to focus on specific services offered
to the
business segment. 1hese services might include, for e2ample, Internet access
and document delivery.
F Usage occasions. 7 hotel positions itself to conference organisers as ideally
suited
for hosting conferences.
F User categories. 7 hotel positions itself as meeting the needs of business
customers
rather than individual customers.
F Positioning by competitor. 7 hotel positions itself as having better
facilities than
those of all other hotels in a particular area.
F Positioning by product class. 7 hotel positions itself as a EconferenceE
hotel rather
than as a EleisureE hotel.
F Positioning by price and quality. 7 hotel might position its brand at
the high end
of the market as a premium hotel, or at a more competitive price at the lower end
of the market.
F Positioning by cultural or national symbols. 7 hotel could tie
itself to a cultural
symbol, for e2ample, Sun InternationalEs 1able *ay 0otel in !ape 1own
associates itself with 1able ountain and 1able *ay, which are South 7frican
landmarks.
1o sustain competitive advantage and suitably position an offering for the
duration of its e2istence, it is crucial for the organisation to identify the phase of the
service life cycle in which the offering finds itself. 1he placement of the offering in
the service life cycle will determine the marketing strategies that are appropriate to
addressing the challenges of the phase in <uestion.
Service life cycle
1he hotel needs to proactively manage the service mi2 it is offering, by applying a
suitable selection of strategies. 9or e2ample, a hotel finding its service offering in
the growth phase of its service life cycle will focus on getting customers to prefer its
brand to the brands of competitors.
=
D
.J. Petzer, T..J. !teyn " P.#. $ostert
7 hotel that is able to compete successfully in its industry through ($) the creation
of a sustainable competitive advantage for its service offering, and (+) positioning its
service offering successfully in relation to its competitors throughout the life cycle of
that offering, will eventually retain customers. Such a hotel should ensure that it has
the necessary systems and strategies in place to manage the demand for its offering.
In addition to managing demand, the hotel needs to manage its capacity, or ability
to supply the demand made by its customers.
$anaging supply and demand
6lassen and =ohleder (+00+& /+,) view demand management as Gan attempt to shift
demandG, while capacity or supply management is seen as Ga response to demandG.
Since services are perishable, managing demand and capacity (or supply) is critical
in the hospitality industry (6otler, *owen " aken +00(& /%).
.emand and supply do not always match. 1he supply of services by a hotel
may e2ceed the demand from customers in <uiet times> demand from customers
may e2ceed the ability of the hotel to supply the re<uired services during peak
times. Dhen supply e2ceeds demand, a hotel is left with unused resources& rooms,
restaurant seating and conference facilities, among other things. Dhen demand
e2ceeds supply 5 and there are no rooms or restaurant seating available 5 the hotel
may have no other option than to turn potential customers away (6urt8 " !low
$%%8& ('/).
In a properly designed and managed service organisation, the capacity of the
facility, the supporting e<uipment and the service personnel should all be in balance
with one another 5 and with demand for the services offered. ;perations should
be designed in such a way as to limit the chances that a bottleneck might occur in
the system. 1his is not always attainable& demand levels fluctuate unpredictably in
the hotel industry. It is also difficult to minimise bottlenecks, since the time and
effort it takes to personally serve individual customers varies greatly (7denso5.Ha8,
!on8Ile851orre " -arcHa +00+& +83> 6lassen " =ohleder +00+& /+,> Aovelock +00$&
'0$).
Management of customer demand
1he fact that a service organisation such as a hotel cannot store its services is not
problematic 5 but only when demand is steady and foreseeable. In reality, service
organisations such as hotels e2perience demand that varies significantly. 1his
variation can take a number of forms (6andampully +000& $+> #almer +00$& (8%)&
>
Competitive marketing strategies of selected hotels: an exploratory study
F Daily variation. 1he demand levels vary according to time of day& a
hotel
restaurant is busier during meal times than during the rest of the day.
F Weekly variation. 7 hotel located in a scenic area away from a city is busier
over
weekends than during the week.
F Seasonal variation. 7 resort hotelEs occupancy is higher during holidays
than
during out5of5season periods.
F Cyclical variation. 1he demand for hotel accommodation varies
according to the
economic conditions in the country or region where the hotel is located.
F Unpredictable variation. .emand for hotel accommodation can
decrease sharply
when a terrorist attack or natural disaster occurs in pro2imity to the hotel.
In a situation of under5demand, or oversupply, the organisation could seek
greater diffusion into the market by proactively contacting customers 5 or it could
reposition service offerings. It might offer different and alternative services, including
complimentary and convenience services (such as meals included in room rates, or
valet parking). It could increase advertising, or offer discounts or lower prices, or
follow segments whose demands change according to season. It could also initiate
marketing programmes targeted at particular segments, or use idle employees as
Ewalking advertisementsE, or market services under e2change agreements (#almer
+00$& (%$> Shemwell " !ronin $%%'& $3> Sill $%%$& 8$).
Management of service capacity
7rmistead and !lark ($%%'& 35,) state that capacity management aims to bring
potential output (based on available resources) in line with actual output. Aovelock
(+00$& (%/5(%3) proposes several strategies to manage capacity. 1hese involve
stretching and shrinking capacity, chasing demand, as well as bringing about fle2ible
capacity (Aovelock +00$& (%/5(%/). In some instances, capacity may be elastic. 1his
means, for e2ample, that opportunities may e2ist to accept e2tra business when the
organisation is already busy. 7 hotel could stretch capacity by accommodating more
than its capacity during peak demand periods. 1his could be done by turning a
room suited for double occupancy into a room to accommodate a family.
1he second strategy 5 chasing demand 5 involves altering capacity to suit changes in
demand. 1he service organisation may schedule for downtime during periods of
low demand, use temporary staff instead of permanent staff, or lease or share
facilities or e<uipment that are not being used. 7lternatively, employees could be
multi5skilled to perform a wider variety of tasks (Aovelock +00$& (%/5(%3). 7 hotel
may also decide to use the e2tra time to train its employees, or allow employees to
practise the skills that they have ac<uired. 1he hotel could also spend the e2tra time
?
D
.J. Petzer, T..J. !teyn " P.#. $ostert
implementing new work schedules, retrenching staff, conducting subcontracting
work for other suppliers, or offering free services to charities and other such
organisations (6urt8 " !low $%%8& (/'> Shemwell " !ronin $%%'& $3> #almer +00$&
(%().
.uring periods of high demand, a hotelEs restaurant may, for e2ample, offer early
dinners and late suppers so as to accommodate all guests in the dining room, though
at different times, during the evening. 7 hotel may decide to hire temporary staff and
e<uipment, add temporary facilities, or use e<uipment and staff only where most
urgently needed. It might also increase the number of staff, let staff work longer
hours (overtime), or multi5skill staff to enable them to perform a wider variety of
tasks. It could also turn away new customers and focus only on fre<uent guests,
or, finally, outsource work to other organisations (6urt8 " !low $%%8& ('%5(//>
Aovelock +00$& (%/5(%3> #almer +00$& (%+5(%(> Shemwell " !ronin $%%'& $3).
1he last option available is to design capacity to be fle2ible (Aovelock +00$& (%/5
(%3). 7 hotel might build rooms with connecting doors. 1he hotel could, in such a
scenario, configure the rooms as two separate bedrooms, or as one bedroom with a
separate lounge 5 depending on demand. Sill ($%%$& ,8) is of the opinion that the
ob?ective of a fle2ible capacity strategy is to promptly respond to demand at different
levels. 1he key to a fle2ible capacity strategy is the ability to service high levels of
demand, yet still keep overhead costs down. 1his is achieved by avoiding e2cessive
capacity (Sill $%%$& ,8).
P'(&23$ !T%T3$3/T, (&J3CT:53! %/D '3!3%'C-
-yP(T-3!3!
In the e2tant literature on the sub?ect, no study could be found e2amining the
correlation of the si8e of hotel (small, medium or large) or the ownership type of
the hotel (group or branded, or privateJowner5managed) to managerial attitudes
towards competitive marketing strategies and managing supply and demand. 1he
main ob?ective of the study is, therefore, to establish how hotels in -auteng view
and e2ecute competitive marketing strategies and manage the supply and demand
of guests.
1he following null hypotheses arise out of the literature discussion&
0
o
$& 0otel si8e is not significant in managerial perceptions of the importance of
competitive marketing strategies that competitors find difficult to imitate.
9or further refinement, the first hypothesis can be subdivided into the
following&
0
o
$
a
& 0otel si8e is not significant in managerial perceptions of the importance of
creating value for guests that competitors find difficult to imitate.
9
Competitive marketing strategies of selected hotels: an exploratory study
0
o
$
b
& 0otel si8e is not significant in managerial perceptions of the importance of
sustaining value for guests that competitors find difficult to imitate.
0
o
$
c
& 0otel si8e is not significant in managerial perceptions of the importance of
creating a uni<ue positioning for the hotel.
0
o
$
d
& 0otel si8e is not significant in managerial perceptions of the importance of
changing the e2isting positioning strategy of the hotel to improve its appeal
to guests.
0o$
e
& 0otel si8e is not significant in managerial perceptions of the importance of
managing the hotelEs offerings, as demand for these changes from time to
time.
0
o
+& ;wnership type of the hotel is not significant in managerial perceptions of
the importance of competitive marketing strategies for guests that competitors
find difficult to imitate.
9or further refinement, the second hypothesis can be subdivided into the
following&
0
o
+
a
& ;wnership type of the hotel is not significant in managerial perceptions of
the importance of creating value for guests that competitors find difficult to
imitate.
0
o
+
b
& ;wnership type of the hotel is not significant in managerial perceptions of
the importance of sustaining value for guests that competitors find difficult
to imitate.
0
o
+
c
& ;wnership type of the hotel is not significant in managerial perceptions of
the importance of creating a uni<ue positioning for the hotel.
0
o
+
d
& ;wnership type of the hotel is not significant in managerial perceptions of
the importance of changing the e2isting positioning strategy of the hotel to
improve its appeal to guests.
0
o
+
e
& ;wnership type of the hotel is not significant in managerial perceptions
of the importance of managing the hotelEs offerings, as demand for these
changes from time to time.
0
o
(& 1he si8e of the hotel is not associated with managerial perceptions of the
importance of managing guestsE demand for products and services in an
attempt to change demand.
0
o
'& 1he ownership type of the hotel is not associated with managerial perceptions
of the importance of managing guestsE demand for products and services in
an attempt to change demand.
0
o
/& 1he si8e of the hotel is not associated with managerial perceptions of the
importance of managing the ability of the hotel to supply products and
services in response to guest demand.
@
D
.J. Petzer, T..J. !teyn " P.#. $ostert
0
o
3& 1he ownership type of the hotel is not associated with managerial perceptions
of the importance of managing the ability of the hotel to supply products and
services in response to guest demand.
0
o
,& 1he si8e of the hotel is not associated with managerial perceptions of its
importance in ma2imising revenue through manipulating room rates in
response to e2pected demand.
0
o
8& 1he ownership type of the hotel is not associated with managerial perceptions
of the importance of ma2imising revenue through manipulating room rates
in response to e2pected demand.
'3!3%'C- $3T-(D(2(#y
7n interviewer5administered, in5office survey was used to collect data from hotel
managers in -auteng. 7 <uestionnaire was designed based on ideas gleaned in
the literature study. It contained structured and unstructured <uestions, and was
pre5tested among hotel managers (general and marketing managers) before it was
fielded.
1he <uestionnaire consists of several sections. 1he first section introduces
the <uestionnaire and poses a number of screening <uestions. 1he ne2t section
determines the composition of the hotelEs guests. 1he third section measures the
importance of competitive marketing strategies being utilised and the management
of supply and demand at the hotel. 1he last section of the <uestionnaire deals with
demographic and general <uestions.
7 multiple5item, unlabelled five5point scale was used to measure management
perceptions. ultiple5item scales involve gauging a number of statements linked
to a specific ob?ect (7aker, 6umar " .ay +00'& +%(). 7n unlabelled scaled response
format was used for the multiple5item scale, and only the endpoints of the scale were
identified (*urns " *ush +000& (03). 7 score of ( is the middle5value of the scale. 7
score of higher than ( leans towards Every importantE, while a score of less than (
towards being Enot important at allE. 7 mean score of more than (.00 for an activity or
strategy is regarded as indicative that respondents consider it to be important.
7 representative sample of $+/ hotels was drawn from the population under
study (the target population contains $8+ hotels). 7 probability sampling techni<ue 5
stratified sampling 5 was used to draw a sample from the population. 1he
population was separated into different strata according to the ownership type and
si8e of the hotel. ;wnership of hotels is either Egroup or brandedE, or Eprivate or
owner5managedE. 0otels with /0 or fewer rooms were classified as EsmallE, hotels with
/$ to $/0 rooms were classified as EmediumE, and hotels with $/$ or more rooms
were classified as ElargeE. 7 sample was then selected from the different strata
68
Competitive marketing strategies of selected hotels: an exploratory study
using systematic sampling. .rop5down substitution was used to compensate for
non5response error. 7ccording to *urns and *ush (+000& '$$), this method can
be used when a researcher employs systematic sampling. In this study, drop5down
substitution entailed contacting the ne2t hotel manager on the list immediately
following the name of the hotel manager who had refused to respond. It goes
without saying that the substitution could not be up for interviewing on the original
sampling list.
In order to determine whether a significant association e2isted between the
mean responses of the two groups (group or branded, as opposed to privateJowner5
managed hotels), 9isherEs :2act 1est was used. 7 #hi coefficient was computed in
order to signify the strength of the associations between the variables. In order to
determine whether a significant association e2isted between the mean responses
of more than two groups, the #earson !hi S<uare 1est was conducted. !ramerEs @
coefficient was computed to signify the strength of the association between the
variables (S##S +00(& (0%5($0, (,,5(8$ " '3/).
'3!12T!
!ample profile
1he population of the hotels in -auteng was $8+, and a sample of $+/ hotels was
selected. 9ifty5five of these hotels (''% of the sample) made up the final, realised
sample. Aarge hotels constituted $8%, medium hotels /$% and small hotels ($% of
the sample. -roup or branded hotels numbered (% (,$% of the sample), and there
were $3 private or owner5managed hotels (+%%). Seventy per cent of the respondents
were general managers, while the rest were assistant general managers, marketing
managers, operations managers and personal assistants. =espondents had been in
their current position for periods of between ten weeks and $/ years, with a mean of
'.0' years. #articipants also indicated that their hotels had been in e2istence from
anywhere between two and 30 years, with a mean of $+.8( years.
'elia+ility
!ronbachEs alpha was used to determine the reliability of the measurement set. 1he
measure ranges from 0 to $. 7 value of $ indicates perfect reliability, and the value
0.,0 is considered to be the lower level of acceptability (0air, 7nderson, 1atham "
*lack $%%8& $$8). 1he !ronbachEs alpha for the measurement sets is 0.,%'. 1his
indicates that the measurement set used in the study is reliable.
66
D
.J. Petzer, T..J. !teyn " P.#. $ostert
Competitive marketing strategies
Hypothesis 1: Hotel size and competitive marketing strategies
=espondents had to provide feedback on the importance attributed to a number
of marketing strategies in their hotelsE efforts to be competitive. 1hey had to rate
these strategies and activities on a scale from $ to /, where $ was Enot important at allE
and / was Every importantE. 7s already stated, a mean score of more than (.00 for an
activity or strategy is regarded as indicative that respondents consider it to be
important.
1able $ provides the overall results for the sample and contains the mean and
standard deviation for each competitive marketing strategy, as well as the statistical
measures to determine the significance of these data.
Ta+le 6: The importance of competitive marketing strategies for different sizes and
types of hotel AN B ==C
!trategy
Create value for guests
that competitors find
difficult to imitate
!ustain value for
guests that competi,
tors find difficult to
imitate
Create a uni*ue posi,
tioning strategy for the
hotel
Change the existing
positioning strategy of
the hotel to improve
its appeal to guests
$anage the hotelDs
offerings, as demand
for these changes over
time
$ean
<.<9
<.<>
<.;7
;.><
<.7=
!td
dev.
8.9?<
8.?9=
8.?9@
6.6=6
8.9;?
ischerDs
3xact Test
Ap,valueC
Atype of
hotelC
8.=<7
6.888
8.?>9
8.8<?E
8.6<@
Phi
coefficient
Atype of
hotelC
8.8@?
8.888
8.8?@
8.;88
8.78<
Pearson
Chi !*uare
Ap,valueC
Asize of
hotelC
8.=6=
8.9<<
8.>96
8.;;8
8.8<@E
CramerDs 5
coefficient
Asize of
hotelC
8.6=<
8.8?9
8.66?
8.6@@
8.;7@
E !ignificant association
67
Competitive marketing strategies of selected hotels: an exploratory study
9rom 1able $, it can be seen that the competitive marketing strategy E!reate
value for guests that competitors find difficult to imitateE was deemed to be the
most important marketing strategy in the hotelsE efforts to be competitive. 1his
was closely followed by ESustain value for guests that competitors find difficult to
imitateE. E!hange the e2isting positioning strategy of the hotel to improve its appeal to
guestsE obtained the lowest mean score of (.3' (although this was still an important
consideration to managers). It is noteworthy that the mean scores for all activities
are above (.00. 1he main finding is that hotel managers considered all competitive
marketing strategies important in their hotelsE efforts to be competitive.
1he si8e of the hotels (small, medium, large) was cross5tabulated with the mean
importance assigned to each competitive marketing strategy, and significance testing
was performed using the #earson !hi S<uare 1est. !ramerEs @ coefficient was also
computed to signify the strength of the association between the variables 5 a value
of between 0.00 and $.00 is given (.iamantopoulos " Schlegelmilch $%%,& $%%5+0$>
1ustin, Aigthelm, artins " @an Dyk +00/& 3(/> S#SS +00(& (0%5($0). 1he results are
presented in 1able $.
9or the first four competitive marketing strategies (hypotheses $
a
to $
d
), the
#earson !hi S<uare 1est for significant association indicates p5values of 0./$/,
0.8'', 0.38$ and 0.((0. 1his indicates support for the null hypothesis that si8e
is not associated with the perceived importance of& creating value for guests that
competitors find difficult to imitate> sustaining value for guests that competitors
find difficult to imitate> creating a uni<ue positioning strategy> and changing the
e2isting positioning strategy of the hotel to improve its appeal to guests. !ramerEs @
coefficient indicates a minor association between these strategies and the si8e of
the hotel. 1he null hypotheses can therefore not be re?ected. 1he main finding
here is that there is no significant association between the perceived importance of
competitive marketing strategies, and the si8e of the hotel (hypotheses $
a
to $
d
).
9or the null hypothesis $
e
, the #earson !hi S<uare 1est for significant association
indicates a p5value of 0.0'% (see 1able $). 1his indicates no support for the null
hypothesis that si8e is not associated with the perceived importance of managing
the hotelEs offerings, as demand for these changes from time to time. 1he null
hypothesis can therefore be re?ected. 1he si8e of a hotel (small, medium, large) is
thus significantly associated with the importance that the hotel gives to managing
its offerings, as demand for these changes from time to time. 1he larger a hotel, the
more important this competitive marketing strategy is perceived to be. 7 !ramerEs @
coefficient of 0.(+% indicates that a medium5strength association e2ists between the
two factors in <uestion. 1he main finding here is that there is a significant
association (of medium strength) between the perceived importance of managing
6;
D
.J. Petzer, T..J. !teyn " P.#. $ostert
the hotelEs offerings, as demand for these changes from time to time, and the si8e of
the hotel (hypothesis $
e
).
Hypothesis : Hotel o!nership type and competitive marketing
strategies
In order to determine whether or not there is a relationship between hotel type and
the perceived importance of competitive marketing strategies, a test of association
was conducted. 9isherEs :2act 1est was used to determine whether a significant
association e2ists between the variables in the cross5tabulations presented in
1able $. 7 #hi coefficient was also computed to signify the strength of the association
between the variables (.iamantopoulos " Schlegelmilch $%%,& $,8 " $%%5+0$>
S##S +00(& (0%5($0, (,,5(8$ " '3/). 1he results are presented in 1able $.
9or the first three competitive marketing strategies (hypotheses +
a
to +
c
), 9isherEs
:2act 1est for significant association indicates p5values of 0./'+, $.000 and 0.0,%. 1his
indicates support for the null hypothesis that hotel ownership type is not associated
with& the perceived importance of creating value for guests that competitors find
difficult to imitate> sustaining value for guests that competitors find difficult to
imitate> and creating a uni<ue positioning strategy. 1he #hi coefficients indicate a
negligible association between the factors. 1he null hypotheses can therefore not be
re?ected. 1he main finding here is that there is no significant association between
the perceived importance of these competitive marketing strategies, and the type of
ownership of the hotel (hypotheses +
a
to +
c
).
9or the fourth competitive marketing strategy, 9isherEs :2act 1est for significant
association indicates a p5value of 0.0', (see 1able $). 1his indicates no support for
hypothesis +
d
that hotel ownership type is not associated with changing the e2isting
positioning strategy of the hotel to improve its appeal to guests. 1he null hypothesis
can therefore be re?ected. 0otel type (group or branded as opposed to private or owner5
managed) is significantly associated with the perceived importance of changing the
e2isting positioning strategies of the hotel to improve its appeal to guests. 7 #hi
coefficient of 0.(00 indicates a medium5strength association between the two factors
under consideration. 1he main finding here is that there is a significant association
(of medium strength) between the perceived importance of changing the e2isting
positioning strategy of the hotel to improve its appeal to guests, and type of hotel
ownership. 1he management of private or owner5managed hotels feel that this is
very important, whilst those of group5owned hotels feel that it is not important
(hypothesis +
d
). 9or the fifth competitive marketing strategy, 9isherEs :2act 1est for
significant association indicates a p5value of 0.$'%. 1his indicates support for the
null hypothesis that hotel type is not associated with the perceived importance of
6<
Competitive marketing strategies of selected hotels: an exploratory study
managing the hotelEs offerings, as demand for these changes from time to time. 1he
null hypothesis can therefore not be re?ected. 1he #hi coefficient of 0.+0' indicates a
small association between the two factors under consideration. 1he main finding
here is that there is no significant association between the perceived importance of
managing the hotelEs offerings, as demand for these changes from time to time, and
type of hotel ownership (hypothesis +
e
).
$anaging supply and demand
=espondents were asked to indicate how important a number of activities were in
their hotelsE efforts to manage supply and demand. 1able + provides the overall
results for the realised sample.
Ta+le 7: The perceived importance of activities to manage supply and demand
%ctivity
$anage guestsD demand
for products and services
in an attempt to change
demand Afor example,
charging higher room
rates in peak periods,
offering special discount in
periods of lo) demand
and using a reservations
systemC
$anage the hotelDs a+il,
ity to supply products
and services in response
to guest demand Afor
example, turning dou+le
rooms into family rooms
and hiring extra staff
during periods of high
demandC
$aximise revenue
through manipulating
room rates in response
to expected demand Afor
example, adFusting prices
according to levels of
demand expectedC
$ean
;.@=
;.99
;.=@
!td
dev.
6.7@
6.79
6.<=
ischerDs
3xact Test
Ap,valueC
Atype of
hotelC
8.==9
8.869E
6.888
Phi
coefficient
Atype of
hotelC
8.687
8.;;6
8.87;
Chi
!*uare Test
Ap,valueC
Asize of
hotelC
8.89=
8.=@@
8.79<
CramerDs 5
coefficient
Asize of
hotelC
8.7@?
8.6;=
8.767
6=
D.J. Petzer, T..J. !teyn " P.#. $ostert
Eanage guestsE demand for products and services in an attempt to change
demandE obtained the highest mean score of (.%/ and Ea2imise revenue through
manipulating room rates in response to e2pected demandE obtained the lowest mean
score ((./%). 7ll activities obtained a mean score greater than (.00. 1he main finding
here is that hotels regard supply and demand management activities as important in
their efforts to manage supply and demand.
1he si8e of hotel (small, medium, large) was cross5tabulated with the mean
importance assigned to each activity associated with the management of supply and
demand. 1he results indicate whether or not a significant association e2ists between
these two variables.
Hypothesis ": Hotel size and demand management
1he null hypothesis 0
o
( was tested using the #earson !hi S<uare 1est to indicate
whether or not significant associations e2ist between si8e of hotel and managerial
perceptions of the importance of managing guestsE demand for products and services in
an attempt to change demand. 1he results are presented in 1able +.
7 p5value of 0.08/ was calculated. 7 !ramerEs @ coefficient of 0.+%, indicates a
small association between the two variables in <uestion (1ustin et al. +00/& 3(/>
S#SS +00(& (0%5($0> .iamantopoulos " Schlegelmilch $%%,& $%%5+0$). 1his
indicates support for the null hypothesis that hotel si8e is not associated with the
perceived importance of managing guestsE demand for products and services in an
attempt to change demand. 1he null hypothesis can therefore not be re?ected. 1he
si8e of a hotel is thus not significantly associated with the importance it gives to
managing guestsE demand for products and services in an attempt to change demand
(hypothesis ().
1he importance assigned to each activity associated with the management of
supply and demand was cross5tabulated with the differently owned hotels 5 group
or branded, as opposed to private or owner5managed. 1he results show where
significant associations e2ist between the cross5tabulated variables.
9isherEs :2act 1est was used to determine whether or not significant associations
e2ist between hotel ownership type and the importance respondents assign to
activities associated with the management of supply and demand. 7 #hi coefficient
was also computed to signify the strength of the association between the variables
(.iamantopoulos " Schlegelmilch $%%,& $%%5+0$> S#SS +00(& (0%5($0). 1he
results are reflected in 1able +.
6>
Competitive marketing strategies of selected hotels: an exploratory study
Hypothesis #: Hotel o!nership type and demand management
9or the association between hotel ownership type and perceptions about the
importance of managing guestsE demand for products and services in an attempt to
change demand, 9isherEs :2act 1est indicates a p5value of 0.//8. 1his supports the
null hypothesis that hotel ownership type is not associated with the perceived
importance of managing guestsE demand for products and services in an attempt to
change demand. 7 #hi coefficient of 0.$0+ indicates a small association between the
two variables in <uestion. 1he main finding here is that there is no significant
association between the perceived importance of managing guestsE demand for
products and services, in an attempt to change demand, and the ownership type of
the hotel (hypothesis ').
Hypothesis $: Hotel size and supply management
In 1able +, the #earson !hi S<uare 1est for significant association between the si8e
of hotel and the importance given to managing the hotelEs ability to supply products
and services in response to guest demand (hypothesis /) shows a p5value of 0./%%.
7 !ramerEs @ coefficient of 0.$(/ indicates a small association between the two
factors under consideration. 1his indicates support for the null hypothesis. 1he
main finding here is that there is no significant association between the importance
given to managing the hotelEs ability to supply products and services in response to
guest demand, and the si8e of the hotel (hypothesis /).
Hypothesis %: Hotel o!nership type and supply management
9or the association between hotel ownership type and perceptions about the
importance of managing the hotelEs ability to supply products and services in
response to guest demand, 9isherEs :2act 1est indicates a p5value of 0.0$8 (see 1able +).
1he null hypothesis can therefore be re?ected. 7 #hi coefficient of 0.(($ indicates a
medium association between the two variables in <uestion. anagement of private or
owner5managed hotels tend to see such activity as very important, while those of
group5owned hotels feel it is not important. 1he main finding here is that there is a
significant association (of medium strength) between the importance the hotel gives
to managing its ability to supply products and services in response to guest demand,
and hotel ownership type (hypothesis 3).
Hypothesis &: Hotel size and revenue ma'imisation
0ypothesis , used the #earson !hi S<uare 1est to determine whether or not there is a
significant association between si8e of hotel and the importance given to ma2imising
6?
D
.J. Petzer, T..J. !teyn " P.#. $ostert
revenue through manipulating room rates in response to e2pected demand (see
1able +). 1he p5value is 0.+8'. 7 !ramerEs @ coefficient of 0.+$+ indicates a small
association between the two factors under consideration. 1his provides support for
the null hypothesis that hotel si8e is not associated with the importance it gives
to ma2imising revenue through manipulating room rates in response to e2pected
demand. 1he null hypothesis can therefore not be re?ected. 1he si8e of the hotel is
thus not significantly associated with the importance it gives to ma2imising revenue
through manipulating room rates in response to e2pected demand (hypothesis ,).
Hypothesis Hotel o!nership type and revenue ma'imisation
9or the association between hotel ownership type and the importance attributed
to ma2imising revenue through manipulating room rates in response to e2pected
demand, 9isherEs :2act 1est indicates a p5value of $.000. 1his indicates support for the
null hypothesis that hotel ownership type is not associated with the importance it
attributes to ma2imising revenue through manipulating room rates in response to
e2pected demand. 1he null hypothesis can therefore not be re?ected. 7 #hi
coefficient of 0.0+( indicates a negligible association between the two factors in
<uestion. 1he main finding here is that there is no significant association between
the importance given to ma2imising revenue through manipulating room rates in
response to e2pected demand and hotel ownership type (hypothesis 8).
$%/%#3':%2 :$P2:C%T/! %/D '3C($$3/D%T/!
It was found that, across the board, competitive marketing strategies are considered
important in a hotelEs efforts to be competitive. 1he implication of this finding is that
hotels in -auteng should develop their positioning and reposition service offerings
competitively, as well as manage their service offerings proactively throughout their
life cycles.
Significant associations e2ist between the perceived importance of managing
the hotelEs offerings, as demand for these changes from time to time, and si8e of
hotel. 1his marketing strategy is perceived to be more important for larger hotels
than for smaller hotels. 1he implication is that in order for a hotel in -auteng to
successfully manage demand and supply of its services, it needs to consider a
number of strategies& it could manage the demand of guests for service offerings,
or it could manage service capacity or supply, or, indeed, it could advantageously
manage fi2ed capacity.
7nother finding is that there is a significant association (of medium strength)
between the perceived importance of changing e2isting positioning strategies of
69
Competitive marketing strategies of selected hotels: an exploratory study
the hotel to improve its appeal to guests, and type of hotel ownership. #rivate or
owner5managed hotels regard this as very important, while group5owned hotels do
not. 1he realised sample consisted of '0 group or branded hotels and $3 private or
owner5managed hotels, ten of which were also small hotels. It could be argued that
private or owner5managed hotels are generally smaller and therefore more sensitive
and fle2ible in changing their e2isting positioning strategies.
It was also found that there is a significant association (of medium strength)
between the importance the hotel gives to managing its ability to supply products
and services in response to guest demand, and hotel ownership type. #rivate or
owner5managed hotels regard this as very important, while group5owned hotels
do not consider it to be as important. -roup or branded hotels should be made
aware of this perception, and thus be in a position to consider rethinking their
implementation of such an important strategy.
2:$:T%T/! %/D 1T1'3 '3!3%'C-
1he study was confined to hotels in -auteng, South 7frica& its representativity for the
whole of South 7frica cannot be claimed, and any generalisations from the research
to other geographic regions should be treated with caution. It is recommended that
a further study be carried out using the same methodology but encompassing all
the provinces in South 7frica. It is further suggested that the grading of hotels be
incorporated as a variable to establish whether there are differences between hotels
of different si8es, and ownership type within the different gradings of hotels.
C(/C21D:/# '3$%'k!
It is to be hoped that the findings of this study will add to the relatively limited
research on services marketing in the hospitality industry, and specifically to
research in the hotel sector that focuses on the different si8es of hotel as well as on
their ownership type.
Si2teen null hypotheses were formulated, and the findings show that $( of these
were supported, indicating no significant association between variables and the si8e
of hotel or its ownership type.
1he noteworthy findings are that larger hotels perceive it as more important
than smaller and medium5si8ed hotels that the hotelEs offerings be managed, as
demand for these changes from time to time. oreover, private or owner5managed
hotels view the idea of changing their e2isting positioning strategy to improve their
appeal to guests as more important than do group5owned hotels. 1hus, private
or owner5managed hotels regards competitive strategies as very important, while
6@
D
.J. Petzer, T..J. !teyn " P.#. $ostert
group5owned hotels consider these as being of lesser importance. It is hoped that the
findings of this study will add to the relatively limited research on marketing in the
hospitality industry, especially for hotels of different si8es and ownership types.
'33'3/C3!
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doc_820904129.docx
In most developed countries, about 80% of the workforce is employed in the service sector. Service sector industries include education, retailing, tourism and hospitality, medical and hospital services, as well as communications and construction services.
Competitive marketing strategies of selected
hotels: an exploratory study
D.J. Petzer, T..J. !teyn "
P.#. $ostert
%&!T'%CT
(rganisations continually seek ne) )ays to ac*uire, retain and
increase +usiness, since the cost of losing customers is rising. !ervice
organisations such as hotels need to put in place competitive marketing
strategies to improve their competitiveness and thus retain customers.
(nce demand is created, a hotel needs to manage this demand as )ell
as its capacity to deliver.
This study investigates the importance that hotels attach to executing
competitive marketing strategies, as )ell as managing supply and
demand. The study also determines )hether or not hotels of different size
and o)nership type differ in their vie) of the importance of carrying out
these functions.
%n intervie)er,administered in,office survey )as used to collect data
from hotel managers in #auteng.
-otel managers across the +oard consider all competitive marketing
strategies as important. !ignificant correlations exist, ho)ever, +et)een
the importance attached to certain competitive marketing strategies and
the size of hotel , as )ell as the hotel o)nership type.
.ey )ords: competitive marketing strategy, hotel, services marketing, competitive
advantage, sustaina+le competitive advantage, positioning, service life
cycle, supply, demand, capacity
Prof. Petzer and Prof. $ostert are %ssociate Professors in the !chool of &usiness $anagement at the /orth,0est
1niversity, Potchefstroom. Prof. !teyn is %ssociate Professor in the Department of $anagement, !chool of &usiness
at Cameron 1niversity, 2a)ton, (klahoma, 1!%. 3,mail: daniel.petzer4+useco.monash.edu.
!outhern %frican &usiness 'evie) 5olume 67 /um+er 7 7889 6
D.J. Petzer, T..J. !teyn " P.#. $ostert
:/T'(D1CT
/ In most developed countries, about 80% of the workforce is employed in the service
sector. Service sector industries include education, retailing, tourism and hospitality,
medical and hospital services, as well as communications and construction services
(c!oll, !allaghan " #almer $%%8& '(). *y the early +000s, it was estimated that
services already accounted for ,+% of the gross domestic product (-.#) of developed
economies, and /+% of the -.# of developing economies (0ill +00,& +'/). 1he
hospitality industry was e2pected to grow by 3.+% and the tourism industry by '.$%
in +00, (Economist Intelligence 4nit +00/& $0,5$$0). 1he hospitality industry
has grown phenomenally since +00$ and has been driven by both leisure and
business demand (6loppers +00/& +8). 1ourism in South 7frica contributes
about /% to the -.# (.ikeni +00$& /$%) and can thus help to raise the national
income, the level of employment, the balance of payments and foreign e2change
rates. 0otels differ in style and si8e, some having up to 800 bedrooms. 1here are
full5service establishments and medium5si8ed business5class hotels, while others do
business in the budget sector. 9inally, there are the small country inns (canus
+000& $($). 0otels accounted for (,% of total accommodation sales in South
7frica in +00'
uromonitor International +00/). ;rganisations continually seek new ways to ac<uire, retain and increase business,
because the cost of losing customers is rising. Service is an important factor in
retaining clients. 1he role of service is more important than ever, and is e2pected to
become even more critical with time (!hoi " !hu +00$& +8%). 0otels that have the
ability to attract, satisfy and thus retain customers are more likely to survive than
hotels that do not do so.
Successful customer retention allows the hotel to build relationships with its
customers (=eichheld " Sasser $%%0& $0/5$08> 0offman, 6elley " !hung +00(&
((').
6urt8 and !low ($%%8& (805(8$ " '0() are of the opinion that, irrespective of
the efforts of service organisations to introduce competitive strategies to attract
customers and efficiently manage the supply of services they offer, customers do not
always purchase from the same organisation 5 nor do they always remain loyal.
1he ob?ective of this study is to establish the views of hotel management about
the importance of competitive strategies and managing supply and demand.
.ifferences in these views between the management of differently owned hotels,
and of different si8es of hotel, will be determined.
7
Competitive marketing strategies of selected hotels: an exploratory study
T-3('3T:C%2 &%Ck#'(1/D
1he theoretical background to this study focuses on the competitive marketing
strategies that hotels could utilise in order to attract customers. It also looks at the
strategies that hotels could implement to manage the supply of, and demand for,
services.
Competitive marketing strategies
It is said that organisations in the tourism industry have been slow in adopting the
principles of marketing, even though these would enable them to improve their
performance and customer retention (7ppiah57du, 9yal " Singh +000& %3 " $0%).
9or a service organisation such as a hotel to ac<uire customers, it is important that
marketing strategies be deployed to improve its own ability to compete with other
hotels, gain a competitive advantage and thus retain a greater number of customers
(7nderson " @inc8e +000& ,3> !haharbaghi " Aynch $%%%& '%> 0ill " Bones +00+&
$+(> 0itt, Ireland " 0oskisson +00$& /> 6urt8 " !low $%%8& (08> a $%%%& +/% "
+3$> #assemard " 6leiner +000& $+).
Competitive advantage and sustainable competitive advantage
!ompetitive advantage can be viewed as the value an organisation is able to create to
differentiate itself from its competitors (.ubC " =enaghan $%%%& +85((). 1he value
that is created by an organisation is measured by the price customers are willing to
pay for its particular service (#assemard " 6leiner +000& $$+). If customers perceive
the service as producing the re<uired benefits, they will purchase that service, and,
more importantly, will continue to do so over time (Dood +00'& /%).
0itt et al. (+00$& /) view competitive advantage, and sustainable competitive
advantage, as more or less synonymous. 1he authors define it as EsomethingE that
occurs when an organisation puts a value5creating strategy in place. 1his should be a
strategy whose benefits cannot be copied, or which would simply be too e2pensive to
copy.
7nderson and @inc8e (+000& ,3) define sustainable competitive advantage as the
ability to be successful over time. Success is based on the organisationEs ability to rely on
the skills and assets it owns. 7ccording to !haharbaghi and Aynch ($%%%& '%),
sustainable competitive advantage meets current competitive needs without harming
the ability of the organisation to meet its future needs. Sustainable competitive
advantage has three different EorientationsE. 1he first is a conservation5orientation,
which is rooted in the idea that no organisation has unlimited resources. 1he
;
D
.J. Petzer, T..J. !teyn " P.#. $ostert
second orientation is needs5based since the economic activity of the organisation is
concerned with the needs of its customers. 9inally, it is future5oriented, or focused
on the long5term enhancement of resources to gain advantage.
7aker (+00$& $(') considers that four factors are needed to create a sustainable
competitive advantage& firstly, the product strategy, the positioning strategy and
the production strategy with which the organisation competes> secondly, the assets
and capabilities of the organisation that form the basis for competition> thirdly, the
markets where the organisation competes> and, lastly, the competition with which
the organisation has to contend.
6im and ;h (+00'& 33) are of the opinion that the competitive advantage of
an organisation is the result of the resources that the organisation has developed
internally. 7s with all organisations, hotels differ in terms of the resources that they
possess or have access to. 1he competitive advantage that a hotel possesses depends,
thus, on how the hotel develops and employs its resources. 7 chain of hotels might,
for e2ample, gain competitive advantage through a flawless reservations system
developed for the chain. -iven the current business landscape, it is necessary for
organisations to keep ahead of competitors by utilising strategies of differentiation.
.ifferentiation is accomplished through gaining 5 and sustaining 5 competitive
advantage (!olgate $%%8& 80). *randing seems to be the only sustainable
differentiating strategy that hotels might use. 7 sustainable differentiating strategy
re<uires the hotel to bond emotionally with customers and focus on building long5
term relationships with them. 0otels might accomplish sustainable differentiation
by continually providing consistent brand messages (!ai " 0obson +00'& +035
+0,).
c.onald (+00+& '30) states that even though an organisation is able to gain a
competitive advantage, it is easy for a competitor to match that organisation
and draw alongside it. a88arol and Soutar ($%%%& +%0 " +%+) propose that the
organisation can sustain its competitive advantage only if barriers to imitation are
put in place. 1hese barriers prohibit competitors from copying the organisation. If
competitors are unable to copy an organisation, its competitive advantage may well
become sustainable in the long run.
Positioning
#ositioning is an important strategy that an organisation might utilise to create, and
sustain, competitive advantage (7nderson " @inc8e +000& +0%> *elch " *elch +00'&
/$> !ravens, Aamb " !rittenden +00+& 8> Aovelock +00$& +00> #almer +00$& $,,).
;nce a service organisation has identified its target market, the ne2t step is to clearly
position its service offering. 1he organisation should first of all identify the basis on
<
Competitive marketing strategies of selected hotels: an exploratory study
which it wants to compete, and then position its services in a clear and uni<ue way
(eek, eek " :nsor +00$& $3%).
It is important to establish the different positioning criteria along which service
offerings can be positioned. 1hese criteria include (7aker " Shansby $%8+, cited in
*elch " *elch +00'& /+5/'> 1rout $%%/, cited in 6otler, *rown, 7dam " 7rmstrong
+00'& (3/> !low " *aack +00$& $(0> Dind $%8+, cited in #almer +00$& $,%5$80)&
F Specifc product or service attributes. 7 hotel promotes to
business travellers the
fact, for e2ample, that it is located in the heart of a financial centre.
F Benefts or needs. 7 hotel decides to focus on specific services offered
to the
business segment. 1hese services might include, for e2ample, Internet access
and document delivery.
F Usage occasions. 7 hotel positions itself to conference organisers as ideally
suited
for hosting conferences.
F User categories. 7 hotel positions itself as meeting the needs of business
customers
rather than individual customers.
F Positioning by competitor. 7 hotel positions itself as having better
facilities than
those of all other hotels in a particular area.
F Positioning by product class. 7 hotel positions itself as a EconferenceE
hotel rather
than as a EleisureE hotel.
F Positioning by price and quality. 7 hotel might position its brand at
the high end
of the market as a premium hotel, or at a more competitive price at the lower end
of the market.
F Positioning by cultural or national symbols. 7 hotel could tie
itself to a cultural
symbol, for e2ample, Sun InternationalEs 1able *ay 0otel in !ape 1own
associates itself with 1able ountain and 1able *ay, which are South 7frican
landmarks.
1o sustain competitive advantage and suitably position an offering for the
duration of its e2istence, it is crucial for the organisation to identify the phase of the
service life cycle in which the offering finds itself. 1he placement of the offering in
the service life cycle will determine the marketing strategies that are appropriate to
addressing the challenges of the phase in <uestion.
Service life cycle
1he hotel needs to proactively manage the service mi2 it is offering, by applying a
suitable selection of strategies. 9or e2ample, a hotel finding its service offering in
the growth phase of its service life cycle will focus on getting customers to prefer its
brand to the brands of competitors.
=
D
.J. Petzer, T..J. !teyn " P.#. $ostert
7 hotel that is able to compete successfully in its industry through ($) the creation
of a sustainable competitive advantage for its service offering, and (+) positioning its
service offering successfully in relation to its competitors throughout the life cycle of
that offering, will eventually retain customers. Such a hotel should ensure that it has
the necessary systems and strategies in place to manage the demand for its offering.
In addition to managing demand, the hotel needs to manage its capacity, or ability
to supply the demand made by its customers.
$anaging supply and demand
6lassen and =ohleder (+00+& /+,) view demand management as Gan attempt to shift
demandG, while capacity or supply management is seen as Ga response to demandG.
Since services are perishable, managing demand and capacity (or supply) is critical
in the hospitality industry (6otler, *owen " aken +00(& /%).
.emand and supply do not always match. 1he supply of services by a hotel
may e2ceed the demand from customers in <uiet times> demand from customers
may e2ceed the ability of the hotel to supply the re<uired services during peak
times. Dhen supply e2ceeds demand, a hotel is left with unused resources& rooms,
restaurant seating and conference facilities, among other things. Dhen demand
e2ceeds supply 5 and there are no rooms or restaurant seating available 5 the hotel
may have no other option than to turn potential customers away (6urt8 " !low
$%%8& ('/).
In a properly designed and managed service organisation, the capacity of the
facility, the supporting e<uipment and the service personnel should all be in balance
with one another 5 and with demand for the services offered. ;perations should
be designed in such a way as to limit the chances that a bottleneck might occur in
the system. 1his is not always attainable& demand levels fluctuate unpredictably in
the hotel industry. It is also difficult to minimise bottlenecks, since the time and
effort it takes to personally serve individual customers varies greatly (7denso5.Ha8,
!on8Ile851orre " -arcHa +00+& +83> 6lassen " =ohleder +00+& /+,> Aovelock +00$&
'0$).
Management of customer demand
1he fact that a service organisation such as a hotel cannot store its services is not
problematic 5 but only when demand is steady and foreseeable. In reality, service
organisations such as hotels e2perience demand that varies significantly. 1his
variation can take a number of forms (6andampully +000& $+> #almer +00$& (8%)&
>
Competitive marketing strategies of selected hotels: an exploratory study
F Daily variation. 1he demand levels vary according to time of day& a
hotel
restaurant is busier during meal times than during the rest of the day.
F Weekly variation. 7 hotel located in a scenic area away from a city is busier
over
weekends than during the week.
F Seasonal variation. 7 resort hotelEs occupancy is higher during holidays
than
during out5of5season periods.
F Cyclical variation. 1he demand for hotel accommodation varies
according to the
economic conditions in the country or region where the hotel is located.
F Unpredictable variation. .emand for hotel accommodation can
decrease sharply
when a terrorist attack or natural disaster occurs in pro2imity to the hotel.
In a situation of under5demand, or oversupply, the organisation could seek
greater diffusion into the market by proactively contacting customers 5 or it could
reposition service offerings. It might offer different and alternative services, including
complimentary and convenience services (such as meals included in room rates, or
valet parking). It could increase advertising, or offer discounts or lower prices, or
follow segments whose demands change according to season. It could also initiate
marketing programmes targeted at particular segments, or use idle employees as
Ewalking advertisementsE, or market services under e2change agreements (#almer
+00$& (%$> Shemwell " !ronin $%%'& $3> Sill $%%$& 8$).
Management of service capacity
7rmistead and !lark ($%%'& 35,) state that capacity management aims to bring
potential output (based on available resources) in line with actual output. Aovelock
(+00$& (%/5(%3) proposes several strategies to manage capacity. 1hese involve
stretching and shrinking capacity, chasing demand, as well as bringing about fle2ible
capacity (Aovelock +00$& (%/5(%/). In some instances, capacity may be elastic. 1his
means, for e2ample, that opportunities may e2ist to accept e2tra business when the
organisation is already busy. 7 hotel could stretch capacity by accommodating more
than its capacity during peak demand periods. 1his could be done by turning a
room suited for double occupancy into a room to accommodate a family.
1he second strategy 5 chasing demand 5 involves altering capacity to suit changes in
demand. 1he service organisation may schedule for downtime during periods of
low demand, use temporary staff instead of permanent staff, or lease or share
facilities or e<uipment that are not being used. 7lternatively, employees could be
multi5skilled to perform a wider variety of tasks (Aovelock +00$& (%/5(%3). 7 hotel
may also decide to use the e2tra time to train its employees, or allow employees to
practise the skills that they have ac<uired. 1he hotel could also spend the e2tra time
?
D
.J. Petzer, T..J. !teyn " P.#. $ostert
implementing new work schedules, retrenching staff, conducting subcontracting
work for other suppliers, or offering free services to charities and other such
organisations (6urt8 " !low $%%8& (/'> Shemwell " !ronin $%%'& $3> #almer +00$&
(%().
.uring periods of high demand, a hotelEs restaurant may, for e2ample, offer early
dinners and late suppers so as to accommodate all guests in the dining room, though
at different times, during the evening. 7 hotel may decide to hire temporary staff and
e<uipment, add temporary facilities, or use e<uipment and staff only where most
urgently needed. It might also increase the number of staff, let staff work longer
hours (overtime), or multi5skill staff to enable them to perform a wider variety of
tasks. It could also turn away new customers and focus only on fre<uent guests,
or, finally, outsource work to other organisations (6urt8 " !low $%%8& ('%5(//>
Aovelock +00$& (%/5(%3> #almer +00$& (%+5(%(> Shemwell " !ronin $%%'& $3).
1he last option available is to design capacity to be fle2ible (Aovelock +00$& (%/5
(%3). 7 hotel might build rooms with connecting doors. 1he hotel could, in such a
scenario, configure the rooms as two separate bedrooms, or as one bedroom with a
separate lounge 5 depending on demand. Sill ($%%$& ,8) is of the opinion that the
ob?ective of a fle2ible capacity strategy is to promptly respond to demand at different
levels. 1he key to a fle2ible capacity strategy is the ability to service high levels of
demand, yet still keep overhead costs down. 1his is achieved by avoiding e2cessive
capacity (Sill $%%$& ,8).
P'(&23$ !T%T3$3/T, (&J3CT:53! %/D '3!3%'C-
-yP(T-3!3!
In the e2tant literature on the sub?ect, no study could be found e2amining the
correlation of the si8e of hotel (small, medium or large) or the ownership type of
the hotel (group or branded, or privateJowner5managed) to managerial attitudes
towards competitive marketing strategies and managing supply and demand. 1he
main ob?ective of the study is, therefore, to establish how hotels in -auteng view
and e2ecute competitive marketing strategies and manage the supply and demand
of guests.
1he following null hypotheses arise out of the literature discussion&
0
o
$& 0otel si8e is not significant in managerial perceptions of the importance of
competitive marketing strategies that competitors find difficult to imitate.
9or further refinement, the first hypothesis can be subdivided into the
following&
0
o
$
a
& 0otel si8e is not significant in managerial perceptions of the importance of
creating value for guests that competitors find difficult to imitate.
9
Competitive marketing strategies of selected hotels: an exploratory study
0
o
$
b
& 0otel si8e is not significant in managerial perceptions of the importance of
sustaining value for guests that competitors find difficult to imitate.
0
o
$
c
& 0otel si8e is not significant in managerial perceptions of the importance of
creating a uni<ue positioning for the hotel.
0
o
$
d
& 0otel si8e is not significant in managerial perceptions of the importance of
changing the e2isting positioning strategy of the hotel to improve its appeal
to guests.
0o$
e
& 0otel si8e is not significant in managerial perceptions of the importance of
managing the hotelEs offerings, as demand for these changes from time to
time.
0
o
+& ;wnership type of the hotel is not significant in managerial perceptions of
the importance of competitive marketing strategies for guests that competitors
find difficult to imitate.
9or further refinement, the second hypothesis can be subdivided into the
following&
0
o
+
a
& ;wnership type of the hotel is not significant in managerial perceptions of
the importance of creating value for guests that competitors find difficult to
imitate.
0
o
+
b
& ;wnership type of the hotel is not significant in managerial perceptions of
the importance of sustaining value for guests that competitors find difficult
to imitate.
0
o
+
c
& ;wnership type of the hotel is not significant in managerial perceptions of
the importance of creating a uni<ue positioning for the hotel.
0
o
+
d
& ;wnership type of the hotel is not significant in managerial perceptions of
the importance of changing the e2isting positioning strategy of the hotel to
improve its appeal to guests.
0
o
+
e
& ;wnership type of the hotel is not significant in managerial perceptions
of the importance of managing the hotelEs offerings, as demand for these
changes from time to time.
0
o
(& 1he si8e of the hotel is not associated with managerial perceptions of the
importance of managing guestsE demand for products and services in an
attempt to change demand.
0
o
'& 1he ownership type of the hotel is not associated with managerial perceptions
of the importance of managing guestsE demand for products and services in
an attempt to change demand.
0
o
/& 1he si8e of the hotel is not associated with managerial perceptions of the
importance of managing the ability of the hotel to supply products and
services in response to guest demand.
@
D
.J. Petzer, T..J. !teyn " P.#. $ostert
0
o
3& 1he ownership type of the hotel is not associated with managerial perceptions
of the importance of managing the ability of the hotel to supply products and
services in response to guest demand.
0
o
,& 1he si8e of the hotel is not associated with managerial perceptions of its
importance in ma2imising revenue through manipulating room rates in
response to e2pected demand.
0
o
8& 1he ownership type of the hotel is not associated with managerial perceptions
of the importance of ma2imising revenue through manipulating room rates
in response to e2pected demand.
'3!3%'C- $3T-(D(2(#y
7n interviewer5administered, in5office survey was used to collect data from hotel
managers in -auteng. 7 <uestionnaire was designed based on ideas gleaned in
the literature study. It contained structured and unstructured <uestions, and was
pre5tested among hotel managers (general and marketing managers) before it was
fielded.
1he <uestionnaire consists of several sections. 1he first section introduces
the <uestionnaire and poses a number of screening <uestions. 1he ne2t section
determines the composition of the hotelEs guests. 1he third section measures the
importance of competitive marketing strategies being utilised and the management
of supply and demand at the hotel. 1he last section of the <uestionnaire deals with
demographic and general <uestions.
7 multiple5item, unlabelled five5point scale was used to measure management
perceptions. ultiple5item scales involve gauging a number of statements linked
to a specific ob?ect (7aker, 6umar " .ay +00'& +%(). 7n unlabelled scaled response
format was used for the multiple5item scale, and only the endpoints of the scale were
identified (*urns " *ush +000& (03). 7 score of ( is the middle5value of the scale. 7
score of higher than ( leans towards Every importantE, while a score of less than (
towards being Enot important at allE. 7 mean score of more than (.00 for an activity or
strategy is regarded as indicative that respondents consider it to be important.
7 representative sample of $+/ hotels was drawn from the population under
study (the target population contains $8+ hotels). 7 probability sampling techni<ue 5
stratified sampling 5 was used to draw a sample from the population. 1he
population was separated into different strata according to the ownership type and
si8e of the hotel. ;wnership of hotels is either Egroup or brandedE, or Eprivate or
owner5managedE. 0otels with /0 or fewer rooms were classified as EsmallE, hotels with
/$ to $/0 rooms were classified as EmediumE, and hotels with $/$ or more rooms
were classified as ElargeE. 7 sample was then selected from the different strata
68
Competitive marketing strategies of selected hotels: an exploratory study
using systematic sampling. .rop5down substitution was used to compensate for
non5response error. 7ccording to *urns and *ush (+000& '$$), this method can
be used when a researcher employs systematic sampling. In this study, drop5down
substitution entailed contacting the ne2t hotel manager on the list immediately
following the name of the hotel manager who had refused to respond. It goes
without saying that the substitution could not be up for interviewing on the original
sampling list.
In order to determine whether a significant association e2isted between the
mean responses of the two groups (group or branded, as opposed to privateJowner5
managed hotels), 9isherEs :2act 1est was used. 7 #hi coefficient was computed in
order to signify the strength of the associations between the variables. In order to
determine whether a significant association e2isted between the mean responses
of more than two groups, the #earson !hi S<uare 1est was conducted. !ramerEs @
coefficient was computed to signify the strength of the association between the
variables (S##S +00(& (0%5($0, (,,5(8$ " '3/).
'3!12T!
!ample profile
1he population of the hotels in -auteng was $8+, and a sample of $+/ hotels was
selected. 9ifty5five of these hotels (''% of the sample) made up the final, realised
sample. Aarge hotels constituted $8%, medium hotels /$% and small hotels ($% of
the sample. -roup or branded hotels numbered (% (,$% of the sample), and there
were $3 private or owner5managed hotels (+%%). Seventy per cent of the respondents
were general managers, while the rest were assistant general managers, marketing
managers, operations managers and personal assistants. =espondents had been in
their current position for periods of between ten weeks and $/ years, with a mean of
'.0' years. #articipants also indicated that their hotels had been in e2istence from
anywhere between two and 30 years, with a mean of $+.8( years.
'elia+ility
!ronbachEs alpha was used to determine the reliability of the measurement set. 1he
measure ranges from 0 to $. 7 value of $ indicates perfect reliability, and the value
0.,0 is considered to be the lower level of acceptability (0air, 7nderson, 1atham "
*lack $%%8& $$8). 1he !ronbachEs alpha for the measurement sets is 0.,%'. 1his
indicates that the measurement set used in the study is reliable.
66
D
.J. Petzer, T..J. !teyn " P.#. $ostert
Competitive marketing strategies
Hypothesis 1: Hotel size and competitive marketing strategies
=espondents had to provide feedback on the importance attributed to a number
of marketing strategies in their hotelsE efforts to be competitive. 1hey had to rate
these strategies and activities on a scale from $ to /, where $ was Enot important at allE
and / was Every importantE. 7s already stated, a mean score of more than (.00 for an
activity or strategy is regarded as indicative that respondents consider it to be
important.
1able $ provides the overall results for the sample and contains the mean and
standard deviation for each competitive marketing strategy, as well as the statistical
measures to determine the significance of these data.
Ta+le 6: The importance of competitive marketing strategies for different sizes and
types of hotel AN B ==C
!trategy
Create value for guests
that competitors find
difficult to imitate
!ustain value for
guests that competi,
tors find difficult to
imitate
Create a uni*ue posi,
tioning strategy for the
hotel
Change the existing
positioning strategy of
the hotel to improve
its appeal to guests
$anage the hotelDs
offerings, as demand
for these changes over
time
$ean
<.<9
<.<>
<.;7
;.><
<.7=
!td
dev.
8.9?<
8.?9=
8.?9@
6.6=6
8.9;?
ischerDs
3xact Test
Ap,valueC
Atype of
hotelC
8.=<7
6.888
8.?>9
8.8<?E
8.6<@
Phi
coefficient
Atype of
hotelC
8.8@?
8.888
8.8?@
8.;88
8.78<
Pearson
Chi !*uare
Ap,valueC
Asize of
hotelC
8.=6=
8.9<<
8.>96
8.;;8
8.8<@E
CramerDs 5
coefficient
Asize of
hotelC
8.6=<
8.8?9
8.66?
8.6@@
8.;7@
E !ignificant association
67
Competitive marketing strategies of selected hotels: an exploratory study
9rom 1able $, it can be seen that the competitive marketing strategy E!reate
value for guests that competitors find difficult to imitateE was deemed to be the
most important marketing strategy in the hotelsE efforts to be competitive. 1his
was closely followed by ESustain value for guests that competitors find difficult to
imitateE. E!hange the e2isting positioning strategy of the hotel to improve its appeal to
guestsE obtained the lowest mean score of (.3' (although this was still an important
consideration to managers). It is noteworthy that the mean scores for all activities
are above (.00. 1he main finding is that hotel managers considered all competitive
marketing strategies important in their hotelsE efforts to be competitive.
1he si8e of the hotels (small, medium, large) was cross5tabulated with the mean
importance assigned to each competitive marketing strategy, and significance testing
was performed using the #earson !hi S<uare 1est. !ramerEs @ coefficient was also
computed to signify the strength of the association between the variables 5 a value
of between 0.00 and $.00 is given (.iamantopoulos " Schlegelmilch $%%,& $%%5+0$>
1ustin, Aigthelm, artins " @an Dyk +00/& 3(/> S#SS +00(& (0%5($0). 1he results are
presented in 1able $.
9or the first four competitive marketing strategies (hypotheses $
a
to $
d
), the
#earson !hi S<uare 1est for significant association indicates p5values of 0./$/,
0.8'', 0.38$ and 0.((0. 1his indicates support for the null hypothesis that si8e
is not associated with the perceived importance of& creating value for guests that
competitors find difficult to imitate> sustaining value for guests that competitors
find difficult to imitate> creating a uni<ue positioning strategy> and changing the
e2isting positioning strategy of the hotel to improve its appeal to guests. !ramerEs @
coefficient indicates a minor association between these strategies and the si8e of
the hotel. 1he null hypotheses can therefore not be re?ected. 1he main finding
here is that there is no significant association between the perceived importance of
competitive marketing strategies, and the si8e of the hotel (hypotheses $
a
to $
d
).
9or the null hypothesis $
e
, the #earson !hi S<uare 1est for significant association
indicates a p5value of 0.0'% (see 1able $). 1his indicates no support for the null
hypothesis that si8e is not associated with the perceived importance of managing
the hotelEs offerings, as demand for these changes from time to time. 1he null
hypothesis can therefore be re?ected. 1he si8e of a hotel (small, medium, large) is
thus significantly associated with the importance that the hotel gives to managing
its offerings, as demand for these changes from time to time. 1he larger a hotel, the
more important this competitive marketing strategy is perceived to be. 7 !ramerEs @
coefficient of 0.(+% indicates that a medium5strength association e2ists between the
two factors in <uestion. 1he main finding here is that there is a significant
association (of medium strength) between the perceived importance of managing
6;
D
.J. Petzer, T..J. !teyn " P.#. $ostert
the hotelEs offerings, as demand for these changes from time to time, and the si8e of
the hotel (hypothesis $
e
).
Hypothesis : Hotel o!nership type and competitive marketing
strategies
In order to determine whether or not there is a relationship between hotel type and
the perceived importance of competitive marketing strategies, a test of association
was conducted. 9isherEs :2act 1est was used to determine whether a significant
association e2ists between the variables in the cross5tabulations presented in
1able $. 7 #hi coefficient was also computed to signify the strength of the association
between the variables (.iamantopoulos " Schlegelmilch $%%,& $,8 " $%%5+0$>
S##S +00(& (0%5($0, (,,5(8$ " '3/). 1he results are presented in 1able $.
9or the first three competitive marketing strategies (hypotheses +
a
to +
c
), 9isherEs
:2act 1est for significant association indicates p5values of 0./'+, $.000 and 0.0,%. 1his
indicates support for the null hypothesis that hotel ownership type is not associated
with& the perceived importance of creating value for guests that competitors find
difficult to imitate> sustaining value for guests that competitors find difficult to
imitate> and creating a uni<ue positioning strategy. 1he #hi coefficients indicate a
negligible association between the factors. 1he null hypotheses can therefore not be
re?ected. 1he main finding here is that there is no significant association between
the perceived importance of these competitive marketing strategies, and the type of
ownership of the hotel (hypotheses +
a
to +
c
).
9or the fourth competitive marketing strategy, 9isherEs :2act 1est for significant
association indicates a p5value of 0.0', (see 1able $). 1his indicates no support for
hypothesis +
d
that hotel ownership type is not associated with changing the e2isting
positioning strategy of the hotel to improve its appeal to guests. 1he null hypothesis
can therefore be re?ected. 0otel type (group or branded as opposed to private or owner5
managed) is significantly associated with the perceived importance of changing the
e2isting positioning strategies of the hotel to improve its appeal to guests. 7 #hi
coefficient of 0.(00 indicates a medium5strength association between the two factors
under consideration. 1he main finding here is that there is a significant association
(of medium strength) between the perceived importance of changing the e2isting
positioning strategy of the hotel to improve its appeal to guests, and type of hotel
ownership. 1he management of private or owner5managed hotels feel that this is
very important, whilst those of group5owned hotels feel that it is not important
(hypothesis +
d
). 9or the fifth competitive marketing strategy, 9isherEs :2act 1est for
significant association indicates a p5value of 0.$'%. 1his indicates support for the
null hypothesis that hotel type is not associated with the perceived importance of
6<
Competitive marketing strategies of selected hotels: an exploratory study
managing the hotelEs offerings, as demand for these changes from time to time. 1he
null hypothesis can therefore not be re?ected. 1he #hi coefficient of 0.+0' indicates a
small association between the two factors under consideration. 1he main finding
here is that there is no significant association between the perceived importance of
managing the hotelEs offerings, as demand for these changes from time to time, and
type of hotel ownership (hypothesis +
e
).
$anaging supply and demand
=espondents were asked to indicate how important a number of activities were in
their hotelsE efforts to manage supply and demand. 1able + provides the overall
results for the realised sample.
Ta+le 7: The perceived importance of activities to manage supply and demand
%ctivity
$anage guestsD demand
for products and services
in an attempt to change
demand Afor example,
charging higher room
rates in peak periods,
offering special discount in
periods of lo) demand
and using a reservations
systemC
$anage the hotelDs a+il,
ity to supply products
and services in response
to guest demand Afor
example, turning dou+le
rooms into family rooms
and hiring extra staff
during periods of high
demandC
$aximise revenue
through manipulating
room rates in response
to expected demand Afor
example, adFusting prices
according to levels of
demand expectedC
$ean
;.@=
;.99
;.=@
!td
dev.
6.7@
6.79
6.<=
ischerDs
3xact Test
Ap,valueC
Atype of
hotelC
8.==9
8.869E
6.888
Phi
coefficient
Atype of
hotelC
8.687
8.;;6
8.87;
Chi
!*uare Test
Ap,valueC
Asize of
hotelC
8.89=
8.=@@
8.79<
CramerDs 5
coefficient
Asize of
hotelC
8.7@?
8.6;=
8.767
6=
D.J. Petzer, T..J. !teyn " P.#. $ostert
Eanage guestsE demand for products and services in an attempt to change
demandE obtained the highest mean score of (.%/ and Ea2imise revenue through
manipulating room rates in response to e2pected demandE obtained the lowest mean
score ((./%). 7ll activities obtained a mean score greater than (.00. 1he main finding
here is that hotels regard supply and demand management activities as important in
their efforts to manage supply and demand.
1he si8e of hotel (small, medium, large) was cross5tabulated with the mean
importance assigned to each activity associated with the management of supply and
demand. 1he results indicate whether or not a significant association e2ists between
these two variables.
Hypothesis ": Hotel size and demand management
1he null hypothesis 0
o
( was tested using the #earson !hi S<uare 1est to indicate
whether or not significant associations e2ist between si8e of hotel and managerial
perceptions of the importance of managing guestsE demand for products and services in
an attempt to change demand. 1he results are presented in 1able +.
7 p5value of 0.08/ was calculated. 7 !ramerEs @ coefficient of 0.+%, indicates a
small association between the two variables in <uestion (1ustin et al. +00/& 3(/>
S#SS +00(& (0%5($0> .iamantopoulos " Schlegelmilch $%%,& $%%5+0$). 1his
indicates support for the null hypothesis that hotel si8e is not associated with the
perceived importance of managing guestsE demand for products and services in an
attempt to change demand. 1he null hypothesis can therefore not be re?ected. 1he
si8e of a hotel is thus not significantly associated with the importance it gives to
managing guestsE demand for products and services in an attempt to change demand
(hypothesis ().
1he importance assigned to each activity associated with the management of
supply and demand was cross5tabulated with the differently owned hotels 5 group
or branded, as opposed to private or owner5managed. 1he results show where
significant associations e2ist between the cross5tabulated variables.
9isherEs :2act 1est was used to determine whether or not significant associations
e2ist between hotel ownership type and the importance respondents assign to
activities associated with the management of supply and demand. 7 #hi coefficient
was also computed to signify the strength of the association between the variables
(.iamantopoulos " Schlegelmilch $%%,& $%%5+0$> S#SS +00(& (0%5($0). 1he
results are reflected in 1able +.
6>
Competitive marketing strategies of selected hotels: an exploratory study
Hypothesis #: Hotel o!nership type and demand management
9or the association between hotel ownership type and perceptions about the
importance of managing guestsE demand for products and services in an attempt to
change demand, 9isherEs :2act 1est indicates a p5value of 0.//8. 1his supports the
null hypothesis that hotel ownership type is not associated with the perceived
importance of managing guestsE demand for products and services in an attempt to
change demand. 7 #hi coefficient of 0.$0+ indicates a small association between the
two variables in <uestion. 1he main finding here is that there is no significant
association between the perceived importance of managing guestsE demand for
products and services, in an attempt to change demand, and the ownership type of
the hotel (hypothesis ').
Hypothesis $: Hotel size and supply management
In 1able +, the #earson !hi S<uare 1est for significant association between the si8e
of hotel and the importance given to managing the hotelEs ability to supply products
and services in response to guest demand (hypothesis /) shows a p5value of 0./%%.
7 !ramerEs @ coefficient of 0.$(/ indicates a small association between the two
factors under consideration. 1his indicates support for the null hypothesis. 1he
main finding here is that there is no significant association between the importance
given to managing the hotelEs ability to supply products and services in response to
guest demand, and the si8e of the hotel (hypothesis /).
Hypothesis %: Hotel o!nership type and supply management
9or the association between hotel ownership type and perceptions about the
importance of managing the hotelEs ability to supply products and services in
response to guest demand, 9isherEs :2act 1est indicates a p5value of 0.0$8 (see 1able +).
1he null hypothesis can therefore be re?ected. 7 #hi coefficient of 0.(($ indicates a
medium association between the two variables in <uestion. anagement of private or
owner5managed hotels tend to see such activity as very important, while those of
group5owned hotels feel it is not important. 1he main finding here is that there is a
significant association (of medium strength) between the importance the hotel gives
to managing its ability to supply products and services in response to guest demand,
and hotel ownership type (hypothesis 3).
Hypothesis &: Hotel size and revenue ma'imisation
0ypothesis , used the #earson !hi S<uare 1est to determine whether or not there is a
significant association between si8e of hotel and the importance given to ma2imising
6?
D
.J. Petzer, T..J. !teyn " P.#. $ostert
revenue through manipulating room rates in response to e2pected demand (see
1able +). 1he p5value is 0.+8'. 7 !ramerEs @ coefficient of 0.+$+ indicates a small
association between the two factors under consideration. 1his provides support for
the null hypothesis that hotel si8e is not associated with the importance it gives
to ma2imising revenue through manipulating room rates in response to e2pected
demand. 1he null hypothesis can therefore not be re?ected. 1he si8e of the hotel is
thus not significantly associated with the importance it gives to ma2imising revenue
through manipulating room rates in response to e2pected demand (hypothesis ,).
Hypothesis
Hotel o!nership type and revenue ma'imisation 9or the association between hotel ownership type and the importance attributed
to ma2imising revenue through manipulating room rates in response to e2pected
demand, 9isherEs :2act 1est indicates a p5value of $.000. 1his indicates support for the
null hypothesis that hotel ownership type is not associated with the importance it
attributes to ma2imising revenue through manipulating room rates in response to
e2pected demand. 1he null hypothesis can therefore not be re?ected. 7 #hi
coefficient of 0.0+( indicates a negligible association between the two factors in
<uestion. 1he main finding here is that there is no significant association between
the importance given to ma2imising revenue through manipulating room rates in
response to e2pected demand and hotel ownership type (hypothesis 8).
$%/%#3':%2 :$P2:C%T
/! %/D '3C($$3/D%T/! It was found that, across the board, competitive marketing strategies are considered
important in a hotelEs efforts to be competitive. 1he implication of this finding is that
hotels in -auteng should develop their positioning and reposition service offerings
competitively, as well as manage their service offerings proactively throughout their
life cycles.
Significant associations e2ist between the perceived importance of managing
the hotelEs offerings, as demand for these changes from time to time, and si8e of
hotel. 1his marketing strategy is perceived to be more important for larger hotels
than for smaller hotels. 1he implication is that in order for a hotel in -auteng to
successfully manage demand and supply of its services, it needs to consider a
number of strategies& it could manage the demand of guests for service offerings,
or it could manage service capacity or supply, or, indeed, it could advantageously
manage fi2ed capacity.
7nother finding is that there is a significant association (of medium strength)
between the perceived importance of changing e2isting positioning strategies of
69
Competitive marketing strategies of selected hotels: an exploratory study
the hotel to improve its appeal to guests, and type of hotel ownership. #rivate or
owner5managed hotels regard this as very important, while group5owned hotels do
not. 1he realised sample consisted of '0 group or branded hotels and $3 private or
owner5managed hotels, ten of which were also small hotels. It could be argued that
private or owner5managed hotels are generally smaller and therefore more sensitive
and fle2ible in changing their e2isting positioning strategies.
It was also found that there is a significant association (of medium strength)
between the importance the hotel gives to managing its ability to supply products
and services in response to guest demand, and hotel ownership type. #rivate or
owner5managed hotels regard this as very important, while group5owned hotels
do not consider it to be as important. -roup or branded hotels should be made
aware of this perception, and thus be in a position to consider rethinking their
implementation of such an important strategy.
2:$:T%T
/! %/D 1T1'3 '3!3%'C- 1he study was confined to hotels in -auteng, South 7frica& its representativity for the
whole of South 7frica cannot be claimed, and any generalisations from the research
to other geographic regions should be treated with caution. It is recommended that
a further study be carried out using the same methodology but encompassing all
the provinces in South 7frica. It is further suggested that the grading of hotels be
incorporated as a variable to establish whether there are differences between hotels
of different si8es, and ownership type within the different gradings of hotels.
C(/C21D:/# '3$%'k!
It is to be hoped that the findings of this study will add to the relatively limited
research on services marketing in the hospitality industry, and specifically to
research in the hotel sector that focuses on the different si8es of hotel as well as on
their ownership type.
Si2teen null hypotheses were formulated, and the findings show that $( of these
were supported, indicating no significant association between variables and the si8e
of hotel or its ownership type.
1he noteworthy findings are that larger hotels perceive it as more important
than smaller and medium5si8ed hotels that the hotelEs offerings be managed, as
demand for these changes from time to time. oreover, private or owner5managed
hotels view the idea of changing their e2isting positioning strategy to improve their
appeal to guests as more important than do group5owned hotels. 1hus, private
or owner5managed hotels regards competitive strategies as very important, while
6@
D
.J. Petzer, T..J. !teyn " P.#. $ostert
group5owned hotels consider these as being of lesser importance. It is hoped that the
findings of this study will add to the relatively limited research on marketing in the
hospitality industry, especially for hotels of different si8es and ownership types.
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doc_820904129.docx