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Research in hospitality industry


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Relevance of market research in Hotel & Hospitality Industry - A snapshot of the various ways in which a research intervention can add value

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Research in hospitality industry

  1. 1. Role of research in hospitality industry A snapshot of various kinds of research projects April 2012
  2. 2. Introduction  This document is a proposal detailing how research can make a difference in the high end hotels industry  Presented herewith is an understanding of the industry in India and key research types that can add value for the hotel/hospitality brand4/5/2012 2
  3. 3. An appreciation of the Indian Hotel industry Contents  Salient features  Key trends
  4. 4. Indian Hotel industry – Salient features  Growing economy that is predicted to smooth-sail upwards in 2012  Burgeoning demand contrasted against insufficient growth in supply  Leading to Rising rates and overall boom in the high-end sector  More than 95% of business accounted by domestic travelers amongst which business travel accommodation is touching unprecedented levels …  Business likely to fructify significantly in metros given the strong demand from IT professionals for accommodation in metros  A large number of International budget hotel chains are poised to enter Indian soil  Back home, around 3 times as many hotel projects in the luxury segment have been approved by the Indian Government & will fructify around 2012  2012-2012 can be a phase where there can be a tussle of sorts between full-service players in luxury segment as well as evolving Indian & International budget chains4/5/2012 4
  5. 5. Trends in Indian Hotel industry  The industry is witnessing a sleuth of Value offerings – Cross breeds that claim the best of 5-star at prices of 3-4 star  Increasing disposable income, higher global exposures through media & frequent international travel have introduced different customer breeds into the fray who come with expectations of a completely different order  There is a high experimentation in the high-end hotel industry with the launch of theme-led properties, as an effort to differentiate  Recession coupled by introduction of lucrative Enterprise benefits has led to a breed of demanding enterprise customers 1. Rising quality of service delivery in hospitality – A general trend, thus there are no apparent long-term ‘differentiators’ in the sector, only sustainable brand value 2. Changing definitions of ‘Luxury’ & ‘Value’ – these 2 attributes are starting to carry multifarious layers & shades across customer segments4/5/2012 5
  6. 6. Research for Hotel industry Contents  Research for Hotel brands  Research for Restaurants
  7. 7. Research for Hotel industry  Given that the 5-star Hotel industry in India is high on involvement and moderate on clutter, owning a sustainable brand heritage and delivering compelling positive touch points to customers at all times becomes an imperative  There are 2 levels at which consumer touch-points mostly materialize in hotel industry: Hotel Property Restaurant experience experience Touch-points rub-off on Touch-points rub-off on the overall Hotel brand Restaurant Brand + Hotel brand associated if any Research solutions accordingly need to address the overall Research solutions accordingly Hotel brand need to address the Restaurant4/5/2012 7
  8. 8. Research for Hotel brands  There are 3 broad areas where research can make a difference for any Hotel brand: Brand health & Satisfaction Brand mix Equity research research research 1. How are we performing as 1. How well-entrenched How well are our a brand & how are our are we with our guests marketing AND other individual properties & whether there is need inputs supporting us performing? for action to further in sustaining our 2. What is the strength of our current loyalty levels? brand health & equity heritage across different 2. How satisfied are our & other tactical customer segments & what employees with us & goalposts? values sustain & drive our why does attrition overall brand heritage? happen?4/5/2012 8
  9. 9. Research for Restaurants  There are 3 broad areas where research can make a difference for a Restaurant: Consumer related Menu related Mix of Touch-points research research (MoT) research 1. Profiling research 1. Developmental This involves assessment of 2. Consumption research overall satisfaction, delight attitudes & behavior 2. Menu assessment & diagnostics for all mapping (CAB) research consumer touch-points at the restaurant in the 3. Consumer diagnostics 3. Pricing research competitive context 4. Trend analysis wrt 4. Fatigue tracking F&B genres4/5/2012 9
  10. 10. Research for Hotel brands Brand health & equity research Contents  Scope of research  Brand Health – Dimensions  Brand Equity – Dimensions  Research design
  11. 11. Brand health & Equity assessment – Scope  Premise of a brand health & equity research is that a brand needs to be assessed in line with any internal/external interventions in order to evolve as a preferred service brand  Key dimensions that are gauged within this for both own brand & competition are: Brand health Brand equity 1. Brand Salience 1. Brand imagery 2. Brand Perceptions 1. Brand associations 1. Product (Property) 2. Brand Values rating 2. Decoding Brand Perceptions 2. Service rating 1. Strengths & Weaknesses 3. Extent of Brand bonding 2. Differentiators 1. Disposition to brand 3. Quality of Brand bonding 2. Entrenchment 1. Personal relevance 3. Imagery (Empathy) & Esteem 2. Differentiation  How is the brand faring on these indices pre / post any marketing intervention?  What indices need to particularly addressed to bolster brand performance?4/5/2012 11
  12. 12. Brand health assessment – Dimensions  This assessment constitutes rating of overall brand and competition on select indices that together constitute ‘overall brand health’  It will primarily yield perceptual rating in terms of Salience and Brand perceptions of the brand & properties as against Competition  Key assessments that are made to determine overall brand health detailed as follows – Salience Brand perceptions Product rating Service rating  Top of Mind recall Rating of brand, properties  Service availability  Spontaneous recall & its sub-units as against  Service reliability expectations on  Aided recall  Perceived service quality  Reach / Availability  Spontaneous Ad  Staff rating on image, recall  Perceived Quality communication skills,  Aided Ad recall  Experience responsiveness, expertise,  Price courtesy & empathy4/5/2012 12
  13. 13. Brand health assessment – Dimensions (Contd.)  Brand bonding will be assessed through following measures detailed below – Disposition Loyalty Imagery Overall disposition towards Extent of loyalty amongst own Strength of association of the brand vs competition wrt: vs competition guests wrt – brand with desired imagery  % Adorers  % Will only always visit parameters over & above competition such as –  % Adopters  % Will visit X brand hotel or others  Authentic  % Accepters  % Will visit only  Iconic  % Available competition  Discerning  % Rejecters  Heritage  Perfectionist  Etc  Assessment of Salience, Perception rating and Brand bonding parameters will yield overall status of our brand in the marketplace vis-à-vis competition …  It will also highlight areas where we score above competition & whether there are any areas where we are on par or below that need bolstering4/5/2012 13
  14. 14. Brand equity – Dimensions  Brand equity research yields the subjective value of the overall brand as well as equity of individual properties  It involves exploration of following dimensions & strength of association of values that emerge from the following articulations –  Associations  Decoding of Strengths, Weaknesses & Differentiators  Brand Values & Quality of Customer Bonding  Identification of Brand values & quality of bonding involves use of Brand Essence Wheel  Brand Essence Wheel breaks down the overall equity of the brand into 1. What the product/ brand does for me 2. How I will describe the product/ brand 3. How the brand makes me look 4. How the brand makes me feel  The above 4 questions cover both rational and emotional aspects with respect to the brand and hence give a holistic picture of esteem & empathy with brand & can be further used to developing the core of marketing communications & brand initiatives4/5/2012 14
  15. 15. Brand equity – The Output Framework of Outputs on the Brand Essence Wheel for brand & Competition What the property How I would does for me describe the property Rational FACTS & SYMBOLS CORE Emotional BRAND PERSONALITY How the brand How the brand makes me look makes me feel4/5/2012 15
  16. 16. Brand health & equity assessment –Research Design  Centers recommended Pan India – Concentrating on all 4 Metros and representation of key Non metros  Target audience TG must be representative of the actual universe Hence need to represent following segments for both brand & Competition across Luxury, Premium, Mid-market and Value categories – 1. Individual segment 1. Business travelers 2. Leisure travelers 3. Business cum Leisure travelers 2. Corporate segment 1. Enterprise decision makers 2. Employee frequenters across grades4/5/2012 16
  17. 17. Brand health & equity assessment –Research Design (Contd.)  Methodology Brand Health Assessment Typically, Brand health assessment necessitates Quantitative methodology, but also needs to be supported by Qualitative methodology for decoding various measures Technique – Given the nature of TG, typically one-on-one approach works best Hence One-on-one Structured interviews supported by One-on-one In depth interviews are recommended Brand Equity Given that one is aiming to capture softer nuances in terms of brand associations, imagery & overall core, Qualitative methodology is necessitated Technique – Focus groups are best equipped for the task. But for logistical reasons, one-on-one In depth interviews may also be considered4/5/2012 17
  18. 18. Satisfaction Research Contents  Scope of research  Guest Satisfaction research  Employee Satisfaction research
  19. 19. Satisfaction research – Scope  Objective of Satisfaction research is to ascertain current satisfaction levels of key stakeholders vis-à-vis competition  Typically, a satisfaction research for 5 star hotel brand covers 2 stakeholders – Guest satisfaction Employee satisfaction  Overall Satisfaction with Brand  Overall Satisfaction with company  Overall Entrenchment with Brand  Overall Satisfaction with individual work dimensions  Decoding of satisfaction levels  Reasons for loyalty / attrition  Overall customer experience at our properties  Overall loyalty, positive WOM & repeat business for our properties  Overall entrenchment  These dimensions are detailed further …4/5/2012 19
  20. 20. Guest Satisfaction research – Measures  Typically, a satisfaction research amongst guests for a high-end hotel brand involves assessment & decoding of following dimensions at an overall level – Overall satisfaction rating Overall rating on levels of Overall Satisfaction with Entrenchment specific properties  Satisfaction with Brand  Entrenchment with  Image  Individual Properties ever Brand  Location visited  Individual Properties  Landscape & expanse  Facilities across properties ever visited  Ambience & décor  Staff across properties  Entrenchment with brand for different  Room options  Perceived service levels occasions  Facilities – Restaurant, across properties Food, Business center,  Business Banquet facilities, Spa,  Leisure Gym, Shopping, Security,  Business cum Travel facilities etc leisure4/5/2012 20
  21. 21. Guest Satisfaction research – Measures(Contd.)  The research also involves assessment & decoding of following dimensions in detail for properties in which ever stayed – Satisfaction with Overall Satisfaction with In-room Satisfaction with Staff Service service  Services offered –  In-room ambience  Staff availability availability  In-room facilities &  Staff accessibility  Perceived quality amenities  Image  Overall Service  Room service  Communication skills Experience  Overall In-room  Responsiveness  Pricing Experience  Expertise  Any other parameters  Pricing  Courtesy  Any other parameters  Empathy levels  Any other parameters4/5/2012 21
  22. 22. Guest Satisfaction research – Outputs  Key outputs of Satisfaction research is the rating of our brand amongst own guests and competition brands amongst competition guests on the following 1. Overall Satisfaction index and distribution 2. Satisfaction drivers and rating on Satisfaction drivers 3. Entrenchment levels and rating on Entrenchment drivers Overall composite customer satisfaction index, which can be tracked over time  These are further broken down into various tangibles & measurable domains detailed and reported at following levels – 1. Overall pan India 2. By Customer segment 3. By Property  This will also yield the key reasons driving current scores vis-à-vis competition and key improvement areas that can improve scores in the short-run as well as long run4/5/2012 22
  23. 23. Guest satisfaction research – Design  Methodology Typically, this necessitates Quantitative methodology, but also needs to be supported by Qualitative methodology for decoding current satisfaction levels Given the nature of TG, typically one-on-one approach works best. Hence One-on-one Structured interviews supported by One-on-one In depth interviews are recommended  Centers recommended Pan India – Concentrating on all 4 Metros and representation of key Non metros  Target audience TG must represent all properties for both brand & Competition across Luxury, Premium, Mid-market and Value categories, covering following profile of guests – 1. Individual segment - Business travelers, Leisure travelers, Business cum Leisure 2. Corporate segment - Enterprise decision makers, Employee frequenters across grades4/5/2012 23
  24. 24. Employee Satisfaction research – Scope  Given that the high-end hotel industry is manpower driven, it is crucial to determine employee satisfaction amongst both current & ex-employees  This will involve assessment of satisfaction and reporting wrt following dimensions –  Overall employability rating as an employer in the market place  Overall satisfaction with working for the company  Satisfaction with respect to – – Role definition & clarity – Work environment – Day to day working experience – Interaction with peers / superiors – Remuneration – Growth opportunities – Any other parameters  Decoding of satisfaction in terms of – – High points & Low points – Reasons for Loyalty / Attrition4/5/2012 24
  25. 25. Employee Satisfaction research – Design  Methodology Typically, this necessitates Quantitative methodology amongst Current employees and Qualitative methodology to explore attrition amongst ex-employees Given the sensitivity of information captured, one-on-one approach works best Hence One-on-one Structured interviews amongst current employees supported by In depth Interviews & One-on-one In depth interviews among Ex-employees recommended  Centers recommended Pan India – Concentrating on all key Properties  Target audience 1. Current employees – Front-end & Back-end across different functionalities 2. Ex-employees4/5/2012 25
  26. 26. Brand Mix Research
  27. 27. Brand Mix research  Brand Mix research involves study of impact and efficacy of brand mix elements (external inputs) in following areas – Elements testing Delivery related research Secondary research  Concept testing for a  Sourcing related  Market overviews new property research  Market intelligence  Communication  Product (Menu etc)  Trend analysis development development  Advertising pre-testing  Pricing research  Advertising  Benchmarking studies effectiveness testing  These researches can address ad-hoc requirements in tune with marketing interventions for the brand4/5/2012 27
  28. 28. Research for Restaurants Consumer related research Contents  Profiling research  CAB research  Consumer diagnostics  Trend analysis
  29. 29. Profiling research  Objective of Profiling research is to ascertain the profile of customers who contribute to footfalls and / or business for the restaurant  Key dimensions on which consumers get profiled are outlined below: Demographics Lifestyle Dining out  Age & Gender  Durables ownership  Frequency of dining out  Education  Shopping habits  With whom & size of party  Occupation  Leisure activities  Restaurants ever visited  SEC  Media habits – Print, TV,  Most frequented restaurant  Income (MHI / MPI) Radio, Internet, Mobile  Restaurants lapsed out of  Type of residence internet etc  Club membership if any  Menu last ordered  Monthly Spends on dine out  The research requires quantitative methodology through one-on-one structured interviews with guests from the database maintained by the restaurant  Outputs from profiling can be used for appropriate targeting of the restaurant & its overall milieu4/5/2012 29
  30. 30. Consumer Attitudes & Behavior mapping  Objective of CAB research is to gain understanding of consumer attitudes & behavior with respect to dining out / fine dining  This research is typically done with a developmental view prior to new launch, theme change / re-design or for an upcoming restaurant  Dimensions that are explored herewith are: Attitudes wrt dining out Habits wrt dining out Preferences  Purpose of dining out  Frequency of dining out Importance, differentiation  Motivations & barriers if any  Time spent per visit & preferences wrt –  Expectations from a fine  With whom & size of party  Brand name & Image dining / 5 star restaurant  Ambience & décor  Menu last ordered  Descriptors of overall  Menu – F&B experience  Monthly Spends on dine out  Restaurants - Ever visited, Most  Service  Overall pay-offs sought  Rational frequented, Lapsed & reasons  Staff  Emotional  Choice process & drivers of choice  Any other touch points  Satisfaction, Loyalty & Disposition  The research necessitates a combination of Quantitative & Qualitative methodology  TG targeted is frequenters of 5-star / fine dining restaurants across age groups  Output is typically used to strategize design / launch of the restaurant4/5/2012 30
  31. 31. Consumer diagnostics  Objective of Consumer diagnostic research is to gauge reasons for either or all of the following – 1. Consumer delight  Understand delight factors / elicit testimonials 2. Consumer satisfaction  Freeze on aspects that should be sustained 3. Consumer dissatisfaction evidenced by poor feedback / low satisfaction / lapsage  Aid in taking relevant corrective measures  Such research is typically Qualitative in nature and conducted through In depth Interviews  TG targeted is ‘own’ guests from the most recent (last 3 months) database maintained at the restaurant  Output is used to either enhance delight factors and / or take relevant corrective measures to avert dissatisfaction4/5/2012 31
  32. 32. Trend analysis for F&B  Trend analysis in F&B is typically undertaken for a restaurant with the objective of maintaining a sustainable edge in terms of delivery in the fine dining market  There are 2 stages to any trend analysis – 1. Stage 1: Ideation / Articulation from ‘discerning’ consumers + Chefs, of all F&B genres, menu & dishes aware of, ever consumed, never consumed & desire to consume, never consumed & do not desire to consume 2. Stage 2: Classification of F&B genres, key dishes of own & competition restaurants into 4 piles – Evergreen genres Emerging genres Steady genres Declining genres Must always be present Not consumed by all, Consumed by many & Declining steadily on in any 5 star / fine but high desire for winning steady patronage consumption as well as dining restaurant & will trial / high on imagery – well-accepted but not imagery – Low demand always be consumed – Growing genre endorsed by all overall  Stage 1 of the research requires Qualitative interaction with Chefs in the fine-dining industry and ‘discerning’ consumers, typically acknowledged food connoisseurs / experts  Stage 2 of the research requires Quantitative structured interviews with frequenters of fine dining / 5-star restaurants  Output from the research is strategic in nature and must be used with a long-term developmental view4/5/2012 32
  33. 33. Research for Restaurants Menu related research Contents  Menu research  Pricing research  Fatigue tracking
  34. 34. Menu Developmental / assessment research  There are 2 types of Menu research – 1. Iterative Development 1. This is done at an experimental stage 2. Basic menu developed by chef is force-tasted by consumers by trial offer & rated 3. Based on ratings, the Chef iterates the menu over a fixed time period until scores are above par on satisfaction & delight levels 2. Menu assessment research 1. This is typically done for a menu already in place 2. Consumer ratings are taken post force-taste through a trial offer to validate preference and prioritize preference across dishes tasted 3. The research may also be accompanied by feedback to menu card / card options  Objective of Menu Developmental research is to obtain cues for finalizing menu for a new / upcoming restaurant or for a restaurant that is changing its menu  Objective of Menu assessment research is to validate consumer satisfaction & delight specifically with the menu at the restaurant – note dips as & when they occur for corrective action  The research is conducted by means of placing a feedback form at the restaurant which every guest is requested to fill in post meal – findings are analyzed by agency  Output is used to fine-tune & prioritization of menu options OR to ascertain if any of the menu options require corrective measures4/5/2012 34
  35. 35. Pricing research  Objective of pricing research is to aid iteration in arriving upon optimal pricing for menu in order to make it competitive & to drive preference by means of value proposition  Pricing feedback for a 5-star restaurant poses following challenges – – Standard feedback scales & options such as ‘slightly expensive’ or ‘too expensive’ are translated into consumer’s projected image ‘difficult to afford’ / ‘cannot afford’ … hence standard approach cannot yield results in this category – For certain menu options, a statistically significant base may not be possible  In this scenario, all Pricing questions done for menu for a 5-star restaurant are typically MASKED and feedback is taken at TWO levels for each dish – – FEEDBACK FROM MENU CARD MINUS TASTING – Respondent asked to rate each menu option along with recipe and price, on following scales • Interest in Recipe – ‘1’ being ‘Not at all interesting’ to ‘5’ being ‘Very interesting’ • Willingness to try – ‘1’ being ‘Definitely will not try’ to ‘5’ being ‘Will definitely try’ – FEEDBACK POST TASTING – For dishes tasted, post billing, respondent is asked to rate each menu option along with price on following scales • Satisfaction with each dish • Willingness to try again – ‘1’ being ‘Definitely will not try’ to ‘5’ being ‘Will definitely try’4/5/2012 35
  36. 36. Pricing research (Contd.)  Analysis is done by checking the extent of negative correlation between ‘Interest in recipe’ and ‘Satisfaction post trial’ against ‘Willingness to try’  Research will indicate whether price is having a negative rub-off on overall willingness to try or not  The research is conducted by means of placing a feedback form at the restaurant which every guest is requested to fill in pre-meal and post-meal  Findings are analyzed by agency  Output is used to understand whether current pricing is leading to lower trials of certain menu options or not4/5/2012 36
  37. 37. Fatigue tracking  Objective of fatigue tracking is to gauge whether consumers are starting to develop fatigue towards existing menu and whether a re-design needs to be considered  This is typically an additional analysis conducted post regular Menu assessments  Key aspects looked into for identifying fatigue with a particular menu option are – 1. Low trial over 3 consecutive assessments + 2. Consistently low ratings over 3 consecutive assessments + 3. Low willingness to trial or re-trial  Fatigue track flags consecutive dips as and when they occur, thus enabling immediate corrective measures / timely redesign of menu  This analysis is done only amongst REGULAR consumers at the restaurant (who frequent the restaurant at least once in 2 months)4/5/2012 37
  38. 38. Research for Restaurants Mix of Touchpoints (MoT) research
  39. 39. Mix of Touch-points (MoT) research  Objective of MoT research is to have an overall assessment of delivery at the restaurant in the competitive context  In this research, own and competition restaurants get rated on following dimensions – Theme, Ambience, Décor, Lay-out – Furniture, Cutlery & Crockery etc – Staff – Image, Attire, Communication, Expertise, Empathy, Turnaround time etc – Overall Menu – Menu card, Range of dishes etc – F&B – Presentation, Uniqueness of Taste, Quantity, Innovation in menu etc – Pricing – Any other factors  TG targeted is frequenters of 5-star / fine dining restaurants across age groups + Guests from the database maintained by the restaurant one-on-one  Research requires quantitative methodology through structured interviews  Output compares scores of own restaurant with own guests versus competition restaurants amongst competition guests – thus serves as an assessment to arrive upon overall standing4/5/2012 39
  40. 40. AZ Research Partners Private Ltd. Contact us Managing Director Sujay Misra Mob: 09886103871 Director Shubhra Misra Mob: 09886111759 Research & Beyond… For latest updates, follow us on: www.azresearch.incopyright AZ Research Partners