Marketing Final Project

BAHRIA UNIVERSITY ISLAMABAD Marketing Final Project By Students of BBA 1-C

Pearl Continental Hotel Rawalpindi

Group Members SYED HARRIS LAEEQUE ZULQURNAIN JAVED AWAIS

Acknowledgment “ IN THE NAME OF ALLAH THE MOST MERCIFUL AND BENEFICENT” First and foremost gratitude to Al-Mighty ALLAH the most merciful and beneficent, who created human being, bestowed him wisdom to seek knowledge of various sciences and spread it among others to make the world happier and prosper. We have no words at our commands to express our deepest sense of gratitude of Al-Mighty ALLAH who enabled us to complete our project against all odds. We acknowledge the untiring efforts of our teachers especially Madam Amina, who has been a beacon of light for us. She broadened our horizons by allowing us to research on our own and gave us free will to write whatever we wanted to. We also thank her that she taught us to analyze things on the basis of facts, figures and ground realities. We would also like to thank all those people who helped us during this project. We are great full to all those who helped us and participated in the surveys. And at the last but not least most important of them all our parents we all thank them for their prayers and patience for letting us doing all the work by ourselves.

Group Profile Hashoo Group of Companies was established under the leadership of Mr. Sadruddin Hashwani. In a period of some three decades he through his single handed dedication and commitment to the Profession has transformed this Group in to a leading industrial group of Pakistan, well known for its forward-looking approach, and highest standards of quality and integrity. Starting with Cotton Trading, Hashoo Group of Companies today boasts the only chain of Five -Star Hotels in Pakistan namely The Pearl Continental Hotels chain and the Karachi Marriott and the Islamabad Marriott Hotels with presence in all the provincial capitals and the Federal Capital except one. Today, Hashoo Group of Companies besides hotel industry encompasses oil and gas exploration, mining, ceramics, pharmaceuticals, tourism and travel. It also has considerable investment in real estate. Mr. Sadruddin Hashwani with his keen eye on the future is now guiding the Group to enter the field of Information Technology (IT). Towards that end a wholly owned subsidiary of the Group known as Net 21 (Pvt) Ltd is currently operating as Internet Service Provider, which is planned to serve as springboard to launch substantive IT projects. The oil and gas exploration is being done under the Orient Petroleum Inc, which has recently met with successful find. The Group is constantly on its forward march. Some examples of it are: The construction of Pearl Continental Hotel Bhurban in the picturesque Murree hills, Construction of new wing called Atrium Wing of The Pearl Continental Hotel Lahore equipped with the most modern amenities, Continual up-gradation and modernization of Pearl Continental Hotels and Islamabad as well as Karachi Marriott Hotels, Acquisitions of the state-of-the-art Ceramics Factory to design and produce crockery and a plant known as Gelcaps to manufacture halal gelatine capsules for the pharmaceutical industry according to the most stringent quality standards. Mr. Hashwani’s Vision knows no bounds and it will be difficult to predict as to what will be his focus of attention tomorrow. For him time is short and the Art is long. Therefore, his philosophy is that each moment of life should go towards advancement of cause of humanity at large. Mr. Hashwani runs Hashoo Foundation whose sole objective is to engage in philanthropic projects in support of social and cultural causes and for the uplift of the deprived. Through this Foundation he not only fulfils his corporate responsibilities but also more importantly his unwavering commitment to promoting the good of common man.

Pakistan Services Limited Pakistan Services Limited was incorporated in 1958 as a Public Limited Company and is quoted on the Stock Exchange. It owns and operates the Pearl Continental Hotels (formerly Inter Continental Hotels) and is recognized as the largest and oldest hotel company in Pakistan. Pearl Continental Hotels is the first Pakistani chain which has achieved excellent international standards of quality products and services. In recognition of its high standard, the Pearl Continental Hotel, Karachi was conferred the prestigious membership of the "Leading Hotels of the World", an exclusive global organization of deluxe hotels established in 1928. Pearl Continental Hotels, beside in -house reservations network, are also linked with Utell International to have international exposure and overseas reservation network. Investment in people and human resource development is an ongoing process in the Hashoo Group. New management concepts and intensive training programs have been introduced at all levels of supervisory and managerial positions through establishment of an in-house Training School located at Pearl Continental Hotel, Bhurban. The Training School looks forward to imparting systematic and scientific knowledge of the operations of both tourism and hospitality business. Pearl Continental Hotels have become synonymous with a tradition of personal services, efficiency, convenience and guest satisfaction.

Mr. Sadruddin Hashwani Mr. Sadruddin Hashwani hails from an illustrious family of Karachi. In 1960, he entered the business of cotton trading and through his hard work and genius he within a decade emerged as a prominent businessman on Pakistan’s Industrial scene. Within a short span of 10 years, Mr. Hashwani was at the pinnacle of cotton business and was rightly known as the ``Cotton King” being top exporter of cotton, besides rice and other commodities In 1972, Mr. Hashwani diverted his attention to other business ventures in diverse areas such as hoteliering, real estate, trading, and property development. Again he made history when in less than a decade, he earned the reputation of a highly successful hotelier. In 1978 and 1981, he consecutively built Holiday Inn Hotels first at Islamabad & then at Karachi under the banner of Hashwani Hotels Limited. In 1992, these hotels were totally revamped and refurbished to qualify for the well-known international 5-Star hotel chain Marriott. The Islamabad Marriott and the Karachi Marriott to day enjoy the same reputation as any other highest-class hotel anywhere in the world.

Corporate Profile: Board of Directors Mr. Sadruddin HashwaniMr. Murtaza Hashwani Chairman Chief Executive Ms. Sarah Hashwani Mr. Vazir Ali F. Mohammad Mr. Syed Sajid Ali Mr. Mansoor Akbar Ali Mr. Shiraz Noordin Audit CommitteeHuman Resource and Recruitment Committee Mr. Sadruddin Hashwani Ms. Sarah Hashwani Mr. Vazir Ali F. MohammadMr. Sadruddin Hashwani Mr. Murtaza Hashwani Mr. Vazir Ali F. Mohammad Mr. Mansoor Akbar Ali Mr. Shiraz Noordin Compensation Committee Mr. Sadruddin HashwaniMs. Sarah HashwaniMr. Vazir Ali F. Mohammad Company Secretary Chief Financial Officer Mr. Mansoor Akbar AliMr. Shiraz Noordin Bankers Auditors Habib Bank Limited National Bank of Pakistan PICIC Commercial Bank Limited Saudi Pak Commercial Bank Ltd. Union Bank LimitedTaseer Hadi Khalid & CompanyChartered Accountants Legal Advisor Liaquat Merchant & Associates Registered OfficeCredit Rating Agency A-9 Mohammad Ali Bogra Road Bath Island, Karachi, Pakistan Tel : 021-5872941-4 Tlx : 21259 HOTEL PK Fax :021-5879872-73 http:// www.pchotels.com.pk http://www.hashoogroup.com.pk http://www.pchotels.biz http:// www.hashoogroup.biz JCR-VIS Credit Rating Company Limited

VISION/MISSION : We are committed to dynamic growth and service excellence built upon our heritage of traditional hospitability. We strive to consistently meet and surpass guests, employees and other stake holder’s expectations. We feel pride in making efforts to position Pakistan in the forefront of the international arena. Corporate culture: Innovation : Listening and two way interaction Participation Encouragement Motivation Enterprise Initiative Growth and development for all: Competence and contribution as the only basis for job security. Promotion from within Learning environment and opportunities Provision for world class education and training Aligning people with latest trends. Trust : Cooperation Support Teamwork Sense of ownership Empowerment Integrity Dignity Respect Candidness Recognition Reward: Achievement orientation Performance based evaluation Appreciation Incentives Setting ever-rising standards of performance.

GOALS/ OBJECTIVES: Customer service: Training: Profitability: Growth profile: Compatibility: Traditional hospitability : Environment of professional enhancement:

EXTERNAL MACRO ENVIRONMENT: The external macro environment consists of those factor which affects all firms. They are: Demographics Economic Conditions Competitions Political and Legal Forces Social and Cultural forces Technology Any change in any one of them can cause changes in one or more of the others. Hence they are interrelated. These forces are largely uncontrollable by the management. Let us see how these External Macro Environment factor affect the PC hotel one by one.

DEMOGRAPHICS: Demographics refer to the characteristics of human population including such factors as size, distribution and growth. Because the people constitute markets, demographics are of special interest to the marketing executives. The PC Hotel makes its market mix on the basis of the following Basic Demographics. 1. Income 2. Occupation 3. Gender 4. Social Class 5. Family cycle

1. INCOME The main basic factor affecting the marketing strategies of the PC hotel is the Income factor. The more income a person earn, the more money he will spend on the luxuries. The PC hotel management has divided the income of people in 5 groups. Income Below Rs 15,000 Income between Rs 15,000 to 25,000 Income between Rs 25,000 to 50,000 Income between Rs 50,000 to 75,000 Income between Rs 75,000 to 100,000

INCOME BELOW RS 15000 People who earn an income of Rs 15000 are very less likely to visit the PC hotel. Because in the current era of high inflation, it is very difficult for a person to manage his household in just Rs 15000. The PC hotel management has no means to attract people belonging to this income category. Because Rs 15000 income leave no room for extra expenditures.

INCOME b/w Rs 15000 - 25000 People who earn an income of Rs 25000 will visit the Pc hotel, but just once in 3, 4 months. Because even this Rs 25000 income is not enough to manage a household in Pakistan. In order to attract people of this income class, the PC hotel comes with several discount packages. Special Buffet dinners, lunches are examples. Or special offers in Ramzan, summers, weekends etc.

INCOME b/w Rs 25,000 – 50,000 People earning an income of Rs 50000 will surely visit the Hotel. Their main reason to visit the Hotel will just be to have a quality food. people belonging to this income class will not choose PC hotel for staying purpose when they will be out on a holiday and the reason for this is the high per night charges of the hotel’s rooms. In order to attract people of this income category PC hotel comes with special discount packages like 1 nights and 2 day stay in hotel for Rs 40000. the PC hotel will also will also use the above mentioned way to attract people of this category. Like discount packages on meals e.g. a dinner of 5 people for Rs10000 only. In order to encourage this income class Pc hotel also brings new products i.e. like the inexpensive Bar B Q items, or a cheap High Tea package.

INCOME b/w Rs 50,000 –75,000 People belonging to an income class of Rs 75000 will not only choose PC hotel for having meals, but also for staying for few days while they will be on holidays. However these people will just stay in the hotel for 2 or 3 nights because of the high per night charges. As these people frequently visit the Hotel for meals purpose, so reducing the prices or discount packages on food will not much affect the hotel visit rate of these people. Because these people can afford dinners etc at high prices. The main objective of the PC hotel is to encourage these people for over nights stays in the hotel. Now in order to encourage this class of people for over night stays the Hotel comes with new exciting offers like a stay in the hotel for 2 nights and 3 days only for Rs 400000 including free meals.

INCOME of 100,000 and Above And finally people earning an income of Rs 100000 and above are the people who belong to a high class, and for them having dinner in PC is just a routine task. Hey will surely choose PC hotel for a long stay while they are out of town. These are the people who take different types of memberships of the PC hotel. These people have enough money to spend on luxuries. Reducing prices of meals or over night stays will not at all affect their hotel visit rate. In order to attract people of this class, the hotel strongly emphasizes on quality and standard of service. Providing these people with extra ordinary standards of services and quality will surely increase the hotel visit rate of these people. Moreover, exciting hotel memberships, clubs and other event participation will also help PC hotel to increase its visit rate by the people.

2. OCCUPATION: The type of occupation a person has will surely affect his expenditures. People who are managers, CEOs, secretaries, presidents, entrepreneurs etc will spend a large part of their income on luxuries. The are more likely to visit hotels for dinners, lunches or for staying over night. For these people visiting hotels is also a status symbol. More solid occupation a person has, the more he will visit the PC hotel. In contrast The people who are home makers, labors, sales man, students, unemployed, teachers etc are very less likely to afford any kind of hoteling, because for them to manage a household in their respective incomes is a big deal. These people will avoid unnecessary expenditures. These people will choose restaurants or fast foods when will face a need of quality meals.

3. GENDER: Mostly the Pakistani families don’t like their women working outside homes. So the 87% of the Pakistani work force comprises of males. As a matter of common sense, as mostly the men are employed therefore only the males will have money to spend on hotels. The males are the once who will have the maximum hotel’s memberships. They are the once who will choose the Pc hotel for over night stays. By knowing the gender, we can know about the occupation level of the person and through occupation level the PC hotel will analyze the income level of people and after analyzing it, the hotel will bring about the special discount packages on meals, over night stays, improving the standards of services and quality of life given to customers in the PC hotel. As the women are less employed so only a few percentage of women will have enough money to spend on hotels, for meals or for stays. Now it depends on the occupation of woman to measure the hotel visit rate. Same is the case with the women, analyzing occupation level and income level of people will help PC to bring about plans for improving its customer services and other factor.

4. SOCIAL CLASS: As I have above mentioned the income and the occupation factor of the demographics, the social class factor also deals with the same. However in the light of PC hotel let us highlight the hotel usage rate by the people. UPPER CLASS: People belonging to the upper class have an enough income to be spent on the luxuries. Upper class people visit hotels frequently as a part of routine. They host meeting, parties, and functions in the hotels. When out of city, they will surely choose PC hotel to stay over night. UPPER MIDDLE CLASS: People belonging to this type of social class have a satisfactory part of income which they could spend on the hoteling purpose. They mostly visit the hotel for having meals. They also choose the hotel for special parties and events. They are also likely to choose PC hotel to stay for a couple of nights. LOWER MIDDLE CLASS: People belonging to Lower middle class will only choose PC hotel for lunches, dinners, brunches etc. these people can not afford to choose PC hotel for over night staying purpose. These people may visit the hotel once in 2 months. UPPER LOWER and LOWER CLASS: People who belong to these 2 types of social class will avoid any kind of unnecessary expenditures. They are very, very likely to visit the hotel.

5. FAMILY CYCLE: Let us divide the family cycle factor in the following groups in the light of PC Hotel. YOUNG-SINGLE: People who are young and single have no tensions at all. They have no responsibilities of household. They are free to do anything. Therefore they are free to spend and portion of their incomes on their luxuries. They are most likely to visit hotel for a luxurious meal or more a luxurious over night stay in the hotel. According to the occupation and income level of the young single people, the PC hotel will come up with plans to cater this area of family cycle. For overnight stays purpose, the PC hotel will design special kind of rooms and sweeps for these type of people. The recent approach to target this class of people by the PC hotel is to employ a good looking staff of waiters room cleaners and etc. the hotel in the past years has also started hosting special parties, clubs etc to encourage them to visit the hotel. Special types of club memberships are also available for these people.

YOUNG-MARRIED: People who are young and married have no children. They have very less responsibilities of household. They can spend a satisfactory portion of their incomes on their luxuries. They can choose the PC hotel for both, luxurious meal or a stay. Again after analyzing the occupation and income level of these married people, the PC hotel will come up with plans to cater this area of family cycle. For overnight stays purpose, the PC hotel will design special kind of rooms and sweeps for these types of people like honeymoon sweeps etc.

MARRIED WITH DEPENDENT CHILDREN: The type of people has a large responsibility on their heads. Before taking a decision they have to think about their family. When children are dependent on you, you will allow less unnecessary expenditures. Therefore the people of this type of family cycle are very less likely to visit the hotel. Or they might visit but very rarely. According to age group of dependent children, the PC hotel comes up with new plans like playing area for children or discount packages on meals for children under 12 year old.

PARENTS WITH INDEPENDENT CHILDREN: When children are married, parents are free again to lead their lives on their own ways. They can spend as much of their income on themselves. Therefore their hotel visit rates increases. The can choose the hotel for hosting parties and events, for meals and for stays. According to age of the parents whose children are married, the PC hotel design rooms for over night stays purpose. Certain Club memberships are available for people above a specific age group. E.g. the PC has few clubs for both men and women who are above 45. These clubs consists of social workers who work for the benefit of their country.

Other attractions in PC hotel for all sort of demographics are: Gymnasium health club Fashion shows which are conducted every season small sport complex swimming pools Basant nights.

COMPETITION : A company’s competitive environment obviously has a major influence on its marketing programs. The PC Hotel Rawalpindi is in straight competition with the following hotels: Serena Hotel (5 star category) Marriott Hotel (5 star category) Holiday Inn (4 star category) Islamabad Club Hotel Shalimar (weak competitor)

When ranking these hotels according to their room occupancy rate, dine in rate, and their growth and business rate, the ranking is as follows: Serena Hotel Marriot Hotel Pearl Continental Hotel Holiday Inn Islamabad Club Hotel Shalimar Due the terrorists attack on Marriot Hotel few months back, it is now closed. So the PC Hotel is enjoying the 2nd position.

The dine in rate of the Marriott and Serena Hotel is almost the same. Because both these hotels are situated in Islamabad and the quality of food and services is the same. The average dine in percentage of Marriott and Serena Hotel of each day is about 85% to 90%. The PC hotels lags behind Marriot and Serena Hotel. The main reason for this is that PC is situated in Rawalpindi sadar. Mostly the rich people live in Islamabad. It is very difficult for the Islamabad people to come to PC for dine in purpose because of the long distance. Marriott and Serena hotel provide the same quality of food and services so the Islamabad people opt for Marriott and Serena rather than PC.

The average room occupancy rate per day of PC hotel is 40% to 45% of the total no. of rooms. The PC hotel has total 200 rooms. The average room occupancy rate per day of Marriott hotel is 75% to 85% of the total no. of rooms. The Marriott hotel has total 250 rooms. The average room occupancy rate per day of Serena hotel is 75% to 90% of the total no. of rooms. The Serena hotel has total 250 rooms. The average room occupancy rate per day of Holiday Inn hotel is 75% to 80% of the total no. of rooms. The Holiday Inn hotel has total 200 rooms. So terms of room occupancy rate, the ranking is Serena Marriott Holiday Inn PC

There is a strong competition among the hotels of Rawalpindi and Islamabad. PC Rawalpindi won an exclusive contract for the lodging of cabin and cockpit crew of the national carrier, Pakistan International Airlines (PIA). This same contract was with Marriott Hotel 4 years back. But PC hotel offered cheaper room rates, therefore PC won the contact over Marriott. Same case also happened last year. PC was given a contact for lodging the crew of the West Indies Cricket team, but at the last moment this contract was snatched from PC and given to Serena Hotel as Serena was giving rooms on cheaper rates. The Serena Hotel was in contract with Emirates airline lodging of cabin and cockpit crew, but after the Marriot bomb blast, Islamabad hotels were declared dangerous. The emirates ended their contract with Serena and gave the contract to PC Rawalpindi .

POLITICAL & LEAGAL FORCES: Every company’s conduct if influenced, often a great deal, by the political and legal processes in our society. The political and legal forces on marketing can be grouped into the following four categories. Monetary and Fiscal policies Social Legislation and regulations Govt. relationships with the industries legislation related specifically to marketing

Affect of political and legal forces on PC Hotel: Hotel industry in Pakistan has been under a lot of stress in the past few years due to the severity drives launched by the successive government, the deteriorating law and order situation in the country and continued duty of large number of taxes. This industry is dependent upon the business and tourist activity in the country. In Pakistan, repeated efforts with the government to come to the rescue of the hotel industry have so far been all in vein. The business activity in Pakistan has overall remained sluggish. Tourism, also, has never been properly emphasized, including development of tourist spots and support infrastructure, despite the exquisite scenic beauty of the landscape of Pakistan and its rich cultural heritage. The fall in foreign nationals traffic to Pakistan in the upshot of September 11 incident and frequent acts of terrorism have continued to adversely affect the hotel industry.

After September 11 there was a slight downfall in the growth of PC hotel. But from the last 2 years, PC hotel is facing a serious downfall. People have reduced their visits to any hotels because of the terrorists attack. Pakistani people have started to avoid visiting those places where there is a crowd. PC hotel faced a historic setback after the Islamabad Marriot attack. From that day, people have almost quit, going to the hotels. The average dine in percentage of one day used to be 75% to 85%. But after the Marriot attack, the percentage has dropped to 65% - 75%. However, this percentage is slowly increasing with the passage of time. The average room occupancy rate per day of PC hotel is 40% to 45% of the total no. of rooms. The PC hotel has total 200 rooms. 3 years back, the average room occupancy rate used to be 75% to 80%. Every successive government increases the taxes. PC hotel has to pay large amount of; Property taxes, Sales taxes and Excise duty. Every 2, 3 years the government reinforces the “Marriage Ordinance Act” according to which only one dish menu will be allowed in the hotel. Not only taxes, the governments also increase the electricity, gas and water rates. The political conditions were much better before 1999. the inflation rate was less, therefore people had enough money to be spend on hotel visits. But in the era of president Musharraf, Pakistan noticed a high rate of inflation which tightened the hand of people.

ECONOMIC CONDITIONS: PC hotel was in its boom before September 11 attacks. After the 9/11 attacks the situation changed. War on terrorism was fought in Afghanistan and Iraq. And Pakistan was declared a “dangerous country”. Not only PC but all the other hotels in Pakistan were affected by the 9/11 attacks. The Pc hotel’s boom period ended. But there was no such major downfall. Things were favorable. But after 2005 PC hotel entered in its Recession stage. And till now it is in Recession. For two months PC was in Depression stage also. This stage was when the Marriott attack happened.

Pearl continental hotel, is the most preferred hotel chain to visit by its customer, but due to economic upheaval in the country and effect of international environment on tourism and hotel industry, PC could not retain its growth momentum as required. Though the Company was able to achieve sales and services of Rs.1.932 billion for the current year, which was almost equal to what they had achieved during the last year; change in sales mix gave rise to increase in cost of sales and the administrative cost as compared to last year. As a result, the profit after tax declined to Rs.32.889 million for the year as compared to Rs.84.891 million last years. The rooms sales during the year, did not maintain the desired growth momentum. Pearl Continental Hotels of Lahore, Rawalpindi and Peshawar have won an exclusive contract for the lodging of cabin and cockpit crew of the national carrier, Pakistan International Airlines (PIA). This success contributed towards increase in overall room occupancy to 58% as compared to 54% during the corresponding period last year. However, due to decline in average room rate, the room revenue stood at Rs. 831 million as against Rs.890 million in the corresponding period last year, which is a decrease of Rs. 59 million. In order to get more business and maximize profit, Pearl Continental executed a Marketing & Reservation Agreement with M.H.R. Collection Limited (Motels, Hotels and Resorts). As per agreement, MHR Collection will provide the services through their network for promoting PC hotels in Pakistan and for making room reservations, which will positively improve room revenue in the years to come. This revenue generating business comprised approximately 51% of the total sales revenue of the hotel as compared to 44% last year.

Pearl Tours & Travels (Private) Limited registered a decline in both Sales and Operating Profit by Rs.5.8 million (10%) and Rs.6.6 (85.68%) respectively as compared to last year. However, due to increase in other income and favorable tax decision at appeal levels, Company made after tax profit of Rs. 1.2 million as compared to last year’s after tax loss of Rs. 3.8 million. During the year2003, old vehicles were disposed of and new additions to its fleet were made in order to provide better service to the customers. In order to improve the liquidity of the holding company to meet other hotels projects, the directors have proposed to dispose off this company. Trans Air Travels (Private) Limited, despite recording a modest decrease in revenue by Rs. 0.433 million as compared to last year, succeeded in reducing its after tax loss to Rs. 3.366 million as compared to after tax loss of Rs. 4.917 million of last year. This Company is under consideration of disposal due to continuous accumulation of losses during the last several years. During the year, food and beverage revenue increased to Rs. 988 million from Rs. 851 million, marking an improvement of 16%. The diagram on next page shows the trend analysis for the sales of food and beverage from year 1998 to 2003.

Inflation : Pakistanis have always been under the pressure of inflation. But we have witnessed a very high inflation rate from the past two years. This all started in the era of President Musharraf. Inflation is increasing rapidly. It has tightened the hand of the public. Managing a house hold has become difficult. People are let with no extra money which could be spent on luxuries like hoteling etc. The high rate of inflation has badly affected the PC hotel business. Middle class people who used to visits at least once in 2, 3 months are not at all visiting the hotel. PC is loosing its customers. The cost of the daily use commodities like rice, wheat, sugar had increased rapidly. PC is unable to bear its expenses; therefore, it had no choice, but to increase the prices. Due to inflation, the government of Pakistan has once again passed the Marriage ordinance Act, according to which only one dish menu will be used in weddings. The Pc hotel can not decrease the per her charges for the one dish menu because of the excessive cost. People think that if they just have to eat Pullao and Korma, then why they should pay high prices. Why don’t they move to a place where the per head charges are less. The room occupancy rate hate has also declined to a great extent due to inflation.

TECHNOLOGY: Technology has a tremendous impact on our life styles, our consumption patterns, and our economic well being. Just think of the effect of technological developments like airplanes, plastics, televisions, computers, lasers, robots etc. We owe our lives to technology. Just imagine the life 200 years back. It would have been very hard. Technology has also played an important role in progress and prosperity of the PC hotel. When the PC hotels were established, Pakistan was not technologically advanced. There used to be air conditioners and heaters in every room. There was no concept of high security. Just few watchmen and security guards used to check people and cars entering the hotel. PC hotel had no credit card machines. No A.T.M machines were there. The conditions of the elevators were poor. The ovens they had worked on gas. The electricity generators were small which could not bear high loads. There was no concept of central heating or cooling. The laundry machines were primitive. Even the buildings of hotel were not as large as of now.

As time passed, technology became advanced. Each passing year added new equipment, techniques and procedures. Lets us take a look on the technological advancements in the PC hotels. In 2005 the PC hotel purchased a large electricity generator of worth 20 million Rs. This electricity generator has a high load bearing capacity. In 1990’s the PC hotel installed plants for central air conditioning and heating. Now big television boxes have been replaced by LCDs. The laundry and kitchen are now equipped by latest machinery which stands at par with those of the Europe and America. Security system has been enhanced. Close circuit television systems have been installed in the hotel to prevent terrorist attacks. This year PC has installed a chiller plant that was imported from Germany and costs more than 10 million Rs. 10 years back, there used to be key locks with keys. This lead to many thefts as anybody can steal or make a duplicate of the original key. Now these keys are replaced with card locks. Just pass the card through the lock on the door. The door lock scans the card and the door opens.

Pearl Continental Tower is a building under construction in Lahore , Pakistan . The project was proposed by the Pearl Continental hotels and resorts. It is a 6 star hotel situated in the heart of Lahore, and is expected to be completed in 2010 boasting world-class facilities. The construction cost is 80 mil US$ (PR 3 bil). The estimated height of the building is 168 m (550 ft.). The hotel extension plan will be completed in just 20 months with a cost of $50 million . The 42-storey building has been planned after the district government decision to relax rules set for the height of hotel building. The current PC building in Lahore is 33.5 m (110 feet) high while the new building will be 152 m (500-foot) tall.

SOCIAL & CUTURAL FORCES: Before opening any new Hotel, the PC hotel first looks for a suitable place, city or region. Then they analyze the environment of that region. What are the social and cultural patterns. Because these socio-cultural patterns influence the values, traditions, behavior and life styles of the people. The PC hotel management analyzes the trends, traditions and values of the people of that area in order to know their needs, wants and desire.

Concern about Natural Environment: The PC hotel management is highly concerned about the natural environment. The PC hotel does not forgets its social responsibilities. They keep a sound check on whether they are following the rules and regulations set by the society. PC hotel uses only that electronic machinery which does notgive out radiations. The Chiller plant and the electricity generator are kept in a special room, so that no radiations are passed out into the atmosphere. The air fresheners that are used in the hotels are all CFC free. On the roof of the hotel, there has been installed a large solar energy powered geyser. The use of this solar energy powered geyser reduces the electricity and gas consumption. The wastes products are diffused out in sealed pipelines. Before throwing out any sort of waste products, the workers check if there are any recyclable materials which could be reused again.

Two Income Families: With the passage of time, the people of Pakistan are becoming more and more broad minded. A reason for this is the media advancement. With the growing inflation rate, it is very difficult to manage a household from the income of a single person. In order to manage the household easily, both husband and wife are now working outside their homes. This leads to an increase in the family income. The house hold expenditures are now managed easily. The PC hotel is benefiting from his approach of people. Now people will have more income that could be spend on luxuries. More people will visit the hotel and this will in turn lead to the growth of the hotel business.

Copyright © 1997 by The McGraw-Hill Companies, Inc. 2-9 Company’s Micro Environment Suppliers Marketing intermediaries Marketing intermediaries The market EXTERNAL MICRO ENVIRONMENT: The External Micro environment factors are those factors which affect only a particular firm. They are: Let us discuss these factors one by one in detail in terms of PC hotel.

1. The Market: The market is really what marketing is all about – how to reach it and serve it profitably and in socially responsible manner. The market should be the focus of all marketing decisions in an organization. But what is market? A market is: “ People and organizations with needs to satisfy, money to spend and willingness to spend it.” Hence we can conclude that marketing is all about customers. Their needs and wants. The PC hotel carefully notices what the people want. What is the competition in the market, what things are being offered by other hotels to the people, what are the prices of the rooms and food in other hotels, what is lacking in our hotel, how can we satisfy the needs of people. How can we enhance the room occupancy rate and the hotel visit rate by changing the prices.

2. Suppliers: A business can not sell a product without being able to make or buy it. That’s why the people or firms hat supply he goods or services required by a producers to make what it sells are critical to marketing success. So there are firms that provide the merchandise what a whole seller or retailer resells. In case of PC hotel, the suppliers play a vital role in the running of the hotel’s business. PC hotels have a computerized system, they feed on the computer which supplies they have in which amount and what is needed. When the computer shows that a particular supply has ended or about to end, the management send notices to the particular suppliers .

Food Supplies: The PC hotel makes contract with the suppliers. These contracts are given to different companies and the length of the contract period ranges from 6 months to 3 years. The supplies like wheat, rice, sugar, salt etc are purchased in bulk once or twice a year. For these kind of supplies which are purchased in bulk, PC hotel have registered suppliers and there contract periods are usually very long. They range from 4 to 6 years. PC hotel also has registered suppliers in abroad, which the Hotel uses in times of crisis. For example, when there was wheat crisis in Pakistan, inferior quality wheat was being supplied to the hotel, at that time the PC hotel imported large quantities of wheat from Sri Lanka. A company in Karachi has been given the contract to supply the frozen chicken. PC hotel produces its own water bottles by the name of SPARKLET.

Guest Supplies: Guest supplies are the room supplies like bed sheets, towels, bed covers, curtains, carpets, shaving cream, lotions, hand wash, face wash, etc. PC hotel makes contacts with a particular cosmetic company for the supplies like hand wash, shaving cream etc. from the last 5 years, NIVEA Pakistan has been given the contract to supply the beauty products and Gillette has the contract to supply shaving creams. The Kohinoor Textile mills in Faisalabad are under a contact with PC hotel from the last 3 years to supply bed sheets and curtains. The carpet supplies come from Peshawar. The tube lights, bulbs suppliers were Philips from many years. But recently this contract is given to orient. In addition, PC hotel also have suppliers for things like tissue papers, tooth picks, crockery, furniture, soft drinks, hard drinks, napkins, stationary, electronics, washing powder, cooking oil, petrol etc.

3. Market Intermediaries: Market intermediaries are independent business organizations that directly aid in the flow of goods and services between the marketing organization and its markets. To a surprise, the PC hotels have no Market Intermediaries. The reason behind this is that, PC hotel makes contract with companies to supply them the things. Now it is the headache of those companies to search for the market intermediaries. PC hotels are not concerned with the shipment, transportation, and other distribution channels. It is the duty of those supplier companies to supply the hotel the goods it needs. For example, take PEPSI. PC hotel makes contract with PEPSI company to supply it Pepsi. That’s all, the job of PC hotel has ended. Now it is the duty of the company to supply pepsi to hotels. Same is the case with the hard drinks. PC hotel give Murree breweries the contract to supply the hard drinks. PC hotel is not concerned with any sort of transportation that the company does.

ORGANIZATION’S INTERNAL ENVIRONMENT: An organization’s marketing effort is also shaped by the Internal forces that are controllable by the management. Suppose a company wants to add a new product in its brand. It must determine whether existing production facilities and expertise can be used. If the new product requires a new plant or machinery, financial capability enters the picture. The factors effecting the company’s internal environment are: Production facilities Financial Resources company image research and development location human resources

COMPANY’S INTERNAL ENVIRONMENT Financial resources Research and development Company image Location Production facilities Human resources 2-11

1. Production Facilities: In order to increase the production facilities, the PC hotels needs to increase its employees and stress should be laid on their training. In order to increase the food production, the food making machinery shall be increased. Moreover, the existing machinery shall be checked so that any fault could be eliminated. The PC hotel management keeps a sound check on the production facilities. The supervisor of kitchen and laundry, weekly checks the machines to know if they are working properly. Every 3 months, a particular batch of kitchen, laundry and house keeping employees goes for a training course.

2. Research and Development: Research and development is related to the technology. There is a research a development manager in every branch of the PC hotel. The employees from the Research and development department visit different hotels in Pakistan and abroad and analyze them. The Research and development department keeps updated about the advancements in technology. What sorts of new machinery is invented, what is lacking in our hotels, what should be imported and from where.

3. Location: The PC hotel is very careful when choosing the location of the hotels. The management chooses only that city and region for hotel establishment where the rich people are more in number. The business of the PC hotel Rawalpindi is much lower than the business of PC hotels of Lahore, Karachi and bhurban. The reason for this is the wrong choice of hotel location. The PC hotel is the only 5 star hotel in Rawalpindi, whereas, all the other 4 and 5 star hotels are in Islamabad. The rich people mostly live in Islamabad. Due to the great distance between sadar and Islamabad, a large number of Islamabad citizens avoid going to PC.

4. Financial Resources: The registered bankers of the PC hotels are: Habib Bank Limited National Bank of Pakistan PICIC Commercial Bank Limited Saudi Pak Commercial Bank Ltd. Union Bank Limited The PC hotels usually take loans only from these banks when doing small renovations, payment of suppliers, or buying some other resources. When doing some expansion in the hotels, it requires a large sum of money. So for long term notes, the PC hotels takes loans from the “ASIAN DEVELOPMENT BANK”. Since 25 years the Asian Development bank is the registered banker of the hotel.

5. Human resources: The total numbers of employees working in PC Hotel Rawalpindi are more than 600 out of which 427 are permanent while remaining are on daily wages. Major portion of employees are working in F&B (food and beverage) department and house keeping department. Because, as we know that hotel industry basically deals with restaurants and rooms, so to make and maintain their standards concerning these areas (rooms and restaurants) employees are needed. They are also needed to cook and serve food and to maintain the services in halls, to maintain rooms & services in rooms. 23 numbers of employees are working in the Human Resource Department of them 5 are working in HR Office.

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