Mkting Final Ppt

SERVICE INDUSTRY -Hospitality sector

MEMBER NAMES ROLL NO.

Jayraj Panchal 09065

Kiran Patel 09076

Manish Bajari 09084

Manisha Desai 09087

Nidhi Shah 09097

Pranali Chandarana 09118

CREDITS

Service marketing is based on relationship and value.

Provides services to business and final consumers.

Accounts for more than half of India’s GDP

It is the backbone of Indian economy

Contributes for more than half of the gdp growth.

The service sector is not confined only to India but it is also expanding globally.

INTRODUCTION OF SERVICE INDUSTRY

SECTORWISE DISTRIBUTON OF INDIA’S GDP

Services or tertiary sector of economy covers various sectors like trade, hotels And restaurants, banking and insurance, telecommunication, personal services, Community services

SERVICE SECTOR CLASSIFICATION

IT Industry• Contributes 5.8% to the service

sector

Telecom Industry• Contributes 1% to the service

sector

Tourism Industry• Contributes 5.9% to the service

sector

(source : www.ibef.com)

Contribution of different industries of service sector to the GDP

Aviation Industry• Contributes more than 8% to the

service sector

Hospitality Industry• Contributes 6.1% to the service

sector

Insurance Industry• Contributes 4.1% to the service

sector

(source : www.ibef.com)

Contribution of different industries of service sector to the GDP

Growth was fastest in communication, hotels and restaurants, banking And trade and business services.

Liberalization - one of the reason for sudden growth gave rise to innovation and higher Export from service sector.

However the growth in GDP was accompanied by proportionate increase in sector’s Share of national employment.

GROWTH IN SERVICE INDUSTRY

Competitiveness of nations and service sector :

Developing economies are in rapid transit

Towards becoming service economies.

Share of service is getting higher in total GDP.

Growth rate of India’s service exports is higher than the world average.

CHALLENGES IN SERVICE INDUSTRY

Campaigns like Incredible India has got various large scale regional and global events like IPL, Commonwealth Games and Asian Games to the nation.

Policies and incentives will be provided over the next decade which will act as a catalyst for the growth of the industry.

FUTURE PROSPECTS OF INDIAN SERVICE INDUSTRY

It refers to the activity of hotels, restaurants, catering, inn, resorts or clubs who make a vocation of treating tourists.

The hospitality industry is a 3.5 trillion dollar service sector within the global economy.

It is expected to grow at the rate of 8% between 2007 and 2016.

This year the number of tourists visiting India is estimated to have touched the figure of 4.4 million.

It estimated that the tourism sector will account for nearly 5.3 per cent of GDP and 5.4 per cent of total employment.

HOSPITALITY INDUSTRY – AN OVERVIEW

India is an ideal destination for tourists

The industry is more dependent on metropolitan cities as they account for 75% to 80% of the revenues, with Delhi and Mumbai being on top.

The average room rate (ARR) and occupancy rate (OC) are the two most critical factors that determine profitability.

Estimated requirement of hotel rooms is 240,000, the current availability is just 90,000 rooms - leaving a shortfall of 150,000 rooms to be provided

INDIAN HOTEL INDUSTRY

Category Typical Location Target Customers

5 star Deluxe Restricted to the 4th largest metro areas and other major cities

Foreign business and leisure travelers, senior biz executives and senior govt. officials

3 star & 4 star Located in major cities as well as tourist destinations

Middle level biz executive and leisure travelers

One star & 2 star Located in major cities as well as tourist destinations

Domestic tourists

Heritage It comprises of odd places, forts ,residences converted in to hotels,Eg.Jaipur,Mysore

Primarily foreign leisure travelers

CLASSIFICATION OF INDIAN HOTEL INDUSTRY

Over the last two years,

the hotel industry has

seen higher growth rates

due to greater number of

tourist arrivals, higher

occupancy rate (being

around 75% in FY'06) and

significant increase in

average room rate (ARR).

KEY PLAYERS IN HOTEL INDUSTRY

As per the Travel and Tourism Competitiveness Report 2009 by the World Economic Forum, India is ranked 11th in the Asia Pacific region and 62nd overall

It is ranked the 14th best tourist destination for its natural resources and 24th for its cultural resources, with many World Heritage sites, both natural and cultural, rich fauna, and strong creative industries in the country.

India also bagged 37th rank for its air transport network. The India travel and tourism industry ranked 5th in the long-term (10-year) growth and is expected to be the second largest employer in the world by 2019.

TOURISM AND HOSPITALITY

The hotel industry in India is at $17 billion (Rs 87,601 crore) currently.

Thirty per cent of the sector is organised.

About $12 billion (Rs 61,836 crore) is the expected investment in this sector by 2011.

In the present scenario the tourism industry's contribution to GDP has dropped from 6.8% in 2007-08 to 6.1% in 2008-09.

FEE in US$ terms during the month of November 2009 were US$ 1.2 billion

Foreign institutional investors (FIIs) have pumped in Rs 20,117 crore (US$ 4.3 billion) into the Indian equity markets in the month of May 2009 — the highest in 19 months.

CONTRIBUTION TO THE ECONOMY

New Tourism Policy was released in May 2002

Hotels located in locations other than the four major metro cities are entitled to 30% deduction from profit, for a ten-year period.

The expenditure tax has been waived in respect of hotels located in the hills, rural areas, and places of pilgrimage or specified place of tourist importance

SCOPE IN RURAL AREAS

Campaign ‘Visit India Year 2009’

Campaigns ‘Incredible India’ and ‘Ahithi Devo Bhava’

No approval is required for foreign equity of up to 51 per cent in tourism projects

50% of profits derived are exempted from income tax.

Concession rates on customs duty is 25%

GOVERNMENT INITIATIVE

PRODUCTRoomsLaundryBaby-sittingChild CareBoutiquesCurrency-exchangeFloristsSalons

PRICE Off-season discountsDifferential Pricing

PROMOTIONTravel AgentsHoardingsSponsoring of EventsAdvertisements in Travel GuidesWord of MouthViral Marketing

PLACEEasily accessible w.r.t stations, airportsSafe and convenient locationsCloser to places of strategic importance

MARKETING MIX

STRENGTHS

Natural and cultural diversity:Demand-supply gapGovernment supportIncrease in the market share

WEAKNESS

Poor support infrastructureSlow implementation Susceptible to political events

OPPORTUNITIES

Rising IncomeOpen sky benefits

THREATS

Increase in competitionFluctuations in International Travel

SWOT ANALYSIS

POLITICAL

Government SupportPolitical issues like in Kashmir and North-EastHistorical places

ECONOMIC

Increase in the spending power of peopleNo. of tourists travelling by air has gone upIncrease in demand for better hotels

SOCIAL

Culture-centric societyHistorical ImportanceFamous among international touristsDiversification of societyExotic locations

TECHNOLOGY

Better communication facilitiesCommunication at cheaper costsBetter transportation facilitiesAvailability of frequent flights

PEST ANALYSIS

Shortage of skilled employeesRetaining quality workforceShortage of rooms Intense competition and image of IndiaCustomer expectationsManual back-endHuman resource development

CHALLENGES FOR HOSPITALITY INDUSTRY

THREAT FROM NEW ENTRANTS

100% FDI is permissible Increasing no. of new players due to cooling of land prices 5-star hotel companies line up 1lk-cr investment near Delhi airport Scarcity of quality hotel rooms

BARGAINING POWER OF BUYER Higher in metro cities due to increasing room supply. Switching of cost of buyer over to another brand of hotel is very high

to be borne by the company. Consumer preference most be in the highest interest of the companies. Competition amongst players gives the customer a better bargaining

more at all times.

PORTER’S FIVE FORCE MODEL

BARGAINING POWER OF THE SUPPLIERS

Huge difference between demand and supply Many key supplies, such as food and beverages, have intense

competitor rivalry which keeps the prices of those supplies low. The conventioneers are a captive set of buyers and thus have

virtually no bargaining power. Good quality service providers can to a certain extend demand a

considerable share for their services.

THREAT FROM SUBSTITUTES

Wide range of choice due to increase in no. of hotels Additional service of spas, health treatments, recreation and much

more

PORTER’S FIVE FORCE MODEL

RIVALRY FROM EXISTING PLAYERS

Rivalry is enhanced when industry growth is low, because growth-minded companies must steal customers from other firms to meet growth objectives.

Customers can easily switch among providers.

Many hospitality firms try to neutralize buyers' power by creating loyalty programs that reward customers for repeat purchases.

PORTER’S FIVE FORCE MODEL

Company Introduction

Incorporated by the founder of the Tata Group, Mr. Jamsetji N. Tata

Subsidiaries are collectively known as Taj Hotels Resorts and Palaces

Taj Hotels Resort and Palaces comprises more than 60 hotels in 45 locations across India with an additional 15 international hotels

Taj hotel offers the luxury of service, the apogee of Indian hospitality, vantage locations, modern amenities and business facilities.

THE INDIAN HOTES COMPANY LTD. (IHCL)

StarsTaj Hotels

Question marksGinger Taj Air

Cash cowsThe Gateway hotelsTaj exotica

Dogs Taj SATS – Air catering group Taj Safaris

BCG MATRIX

Tie ups with

institutes

Continues training

Sponsoring

Research

More low cost Hotels

2 Tier and 3 tier Cities

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