1) List six drawbacks of using only subjective information in formulating strate
ID: 393718 • Letter: 1
Question
1) List six drawbacks of using only subjective information in formulating strategies.
2) In what ways is product strategy linked to product decisions?
3) Today’s hotel and cruise customers are more aware of their requirements and personal needs. Therefore, they expect hotel owners and cruise companies or managers to acknowledge their individual needs, and expectations. Hospitality/cruise marketing is one of the most segmented. There is a wide spectrum of different accommodations from motels to luxury hotels and spas and cruise lines. How and what are some of the ways these specific companies use segmentation to position and differentiate themselves to gain customers and market share? Give at least one example of a hotel or cruise line’s positioning.
Explanation / Answer
Six drawbacks in using only subjective information in formulating strategy:
Margin of error:
Since subjective information can sometimes be vague, it may not give clear indications as to while formulating the strategy, what parameters may vary, by what percentage they may vary or what impact these variations may have on attaining the strategy.
No data points:
While formulating the strategy we need to take into consideration some data related to past trends, or the data of existing market capacity or demand in the region and the competitors’ profiles if the strategy needs to be successful.
Forecasting error:
Since no objective data is available and only subjective information is there, the forecast of demand may be wrongly calculated and hence the strategy can be wronged.
Customer base:
If no demographic data of the customers is available, the target and segments may be mistaken and hence the entire strategy may fail.
Market potential:
When there is no data of the market size and market capital of the existing competitors, we cannot formulate the strategy to penetrate into the new regions
Regulatory norms:
Some territories are very difficult and highly regulated. The strategy must also be formulated in the same way. If only subjective data is available, this aspect may be completely ignored because of which the company may have to pay huge fines.
Ways for hotels to differentiate themselves and gain customers:
Every customer likes to be treated specially and when the companies do take into account their individual needs and expectations, the chances of being loyal with such companies increases. The companies can do following:
After every trip or service that the company has offered, they need to take feedback from the customers
They should also get in touch with the customers, based on the past data of their stay at hotels
The various types of customers stay in different types of hotels or motels etc. The customer segmentation should be done based on the past data available. For example, there can be students, newly married couples, business professionals and their needs will also be different.
The companies should keep on bringing in lucrative offers for the customers to be loyal with the company.
The company can also have VIP or frequent visitors reward points given to maintain the customer base
For new users or new customers there can be some encouragement given to these new customer base through enhanced service or free up-gradation of rooms depending on the availability of rooms.
An example of the hotel can be Mariott hotels which focus majorly on the business professionals which is a type of demographic segmentation. They provide Wi-Fi facilities, lobby PC with internet and printing capabilities. The service is also warm and pleasant which suits the business professionals who have come for longer stays due to some or the other business exigencies.
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