Relationship marketing - The Taj group of hotels.

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.Introduction

.1 Relationship marketing

We live in a developing world where our economies as growing at an increasingly fast pace. There is free movement and trade all over the world. Over the years, the world has become a global market place. This is the prime reason as to why the concept of 'relationship marketing' was brought about. The focus is no more on selling ones products and services, but to build long term beneficial relationships with anyone who is important to your business. "Relationship marketing is to establish, maintain, enhance and commercialise customer relationships so that the objectives of the parties involved are met. This is done by a mutual exchange and fulfilment of promises."1 There has been a very notable change in the concept of using traditional transactional marketing to building and maintaining relationships. This assignment talks about relationship and direct marketing and how it is used in today's world. To make things comprehensible, a company was chosen and the focus was made on this company and their dealings.

.2 The Taj group of hotels-introduction

Jamsetji Nusserwanji Tata, the founder of the Tata Group, incorporated the Indian Hotels Company Limited (IHCL) on April 1, 1902, for the ownership and operation of the Taj Mahal Hotel, Mumbai. The Taj Group's first hotel, The Taj Mahal Palace & Tower, Mumbai was opened on December 16, 1903.

The Rs. 68700 Million Company currently operates the Taj hotels, palaces and resorts, and has grown to become the largest hotel chain in India.2

The Taj has had momentous innings spanning the last three decades both in India and overseas and has established itself as the premier hospitality body in this country. Indian Hotels' presence spans the entire gamut of the market, across different brands and price segments. It is renowned for providing world-class, personalized service to guests, even as it retains an old-world charm by upholding the traditions and heritage of India. Today the Taj brand is synonymous with luxury and service, in India and abroad.

The Taj Group's operations cover over 60 hotels in India and abroad, and encompass a number of brands across various price segments. The Taj Group of Hotels is grouped into strategic business units to get consistency across the different units in the same brand and standardize the product and service across the brands, making them distinct and identifiable. These brands have been classified as Luxury, Business and Leisure.

The Taj believes very strongly on its mission statement. Every employee is required to know this statement at all times.3

2. The customer market: The movers and shakers.

Fig 1: Markets framework Model (Christopher, Payne and Ballantyne, 1991)

Customer Markets

As illustrated in the above model, Christopher, Payne and Ballantyne propose the 'six markets' consist of: customer markets (existing and prospective customers) surrounded by supporting markets, which are referral markets (Satisfied customers who recommend the supplier to others, important in high risk services i.e. banking); supplier markets (to be a partner rather than an adversary to their suppliers); employee markets (making certain that the right employees are recruited and promoted); influence markets (such as journalists and governments); and internal markets (the organisation and its staff). 4

According to Kotler (2000), the four main players for a business are suppliers, distributors, end-users and employees. The Further six players- i.e. the financial firms, government, media, allies, competitors and the general public are placed within a wider macro-environment. 5

Fig-2 Relationship Marketing- Peck, Payne, Christopher, Clark

Supplier

Marketing End User Marketing

Distributor Marketing

There is an escalating recognition that in order for any company to be successful it needs to have a strong, systematic and effective supply chain. As there is wide range of distribution options by which a company may seek to serve the final customer. The Taj deals either directly with the customer or through Travel Agents. They address their customers as Guests, to make them feel special. Taj's supply chain doesn't comprise of any whole seller, distributor or retailer.

Fig 3: Taj group of hotels: value delivery network6

Fig 4: Taj group of hotels: Relationship Marketing ladder of loyalty7

Taj maintains a suitable blend of customer retention and customer acquisition.

2.1 The Customer

The Taj brand is divided into 3 categories, namely business, leisure and luxury. This is done to make things easier and more approachable for a customer. All these hotels use product differentiation. This is made evident and clear through their marketing activities. However, the services offered here are the same. Each type of category uses a set of procedures and policies to maintain relationship marketing. The focus at IHCL is on customer valuation, which then leads to attracting new customers and customer retention.

The Taj believes in maintaining customer relationships. As shown in the value chain earlier, Taj has two main customers. This is her guest and the Travel agencies that she deals with. A customer is valued and identified by market research. He is then attracted with schemes and programs. Once a customer is attracted and starts using Taj services, a focus is made on building a strong and special relationship with him.

Taj has an alliance with Thomas Cook. This is the main travel agency, which promotes Taj. Besides Thomas cook, there are hundreds of travel agencies which deal with Taj. These range from the biggest agencies in India like the travel corporation of India and Sita Travels to the smaller agencies all over the country. Taj has won international acclaim by winning various international awards. Recently, at the 2000 Selling Long-Haul magazine Travel Industry Awards, UK and Irish travel agents have awarded Taj Hotels as the Best Individual Hotel/Hotel Group in India/Indian Ocean. The travel agencies are offered discounts, schemes, promotions and packages, which they can further sell, to the customers. It also has alliances with a few airlines like Delta, Singapore airline etc. that allows the customer to earn sky miles by staying at the Taj. The Taj has bookers parties, for travel agents, group promoters and national bodies like the tourism board, IATA(All India tourism association) etc.

The first day onwards when a guest checks into the Taj, a guest relationship manager or his executives meet with the guest for tea when it is convenient to him. At this meeting, the executive talks to the guest and notes all relevant information about him. If he is a corporate guest, previous information about the guest may have been obtained from his company. Then onwards, the Taj is constantly communicating with the guest. When he comes the next time, the room is customised to his likes. All the amenities, which he prefers, are laid down. When he enters the room, His favourite T.V channel is turned on and his favourite drink is placed for him. On all occasions, like birthdays, anniversaries, New Year and festivals, a card or email is sent to the customer with greeting.

A system called GSTS, which is a guest satisfaction tracking system, is maintained. Here, from time to time, the guest is asked to fill a questionnaire. This is done at an individual hotel level .All the information collected by guests is then fed into a software which points out the areas where improvement is needed. Measures are taken to implement the new changes so that the hotels are constantly improving. Taj has created databases of customers' history-on stay information and profile, which is on a centralized server connected to each of the locations. Each time a frequent traveler checks in, the profile pops up at the reception desk with multilevel information and the hotel is ready to take care of the customer's needs and choices.
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The Taj also introduced an application called Property Management System (PMS). The PMS application maintains data of the customer profile as well as stay information in each of the 40 hotels. PMS is linked to the central server located in Mumbai. The customer database has a data mining application to extract specific information on customer's spending pattern, like on Internet or fax. Data mining has helped them get and act on data on specific fields. It has considerably helped in understanding long term behavioral patterns of customers.8

After extensive research on today's customer needs conducted by Taj, ...

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