Case Study: TAJ WEST END HOTEL

In Bangalore there are 5 major players in 5star hotel category. These are:

a. Windsor Manor Hotel, Near Palace Road / Sivananda Circle

b. Oberoi, M G Road

c. Ashok, an ITDC run hotel

d. Le Meridien (earlier it was called Hotel Holiday Inn)

e. Taj West End, Race Course Road – Part of Taj Group of Hotels, 5star deluxe category

hotel in Bangalore.

Competitive Strategy of West End Hotel:

1. Target Customer – domestic and foreign business travelers, the elite, top management.

2. Positioning – office away from office to service the business customer and for non-business travelers, it is a home away from home.

3. Differentiation – this is through physical ambience. Natural Green Environment gives a relaxed atmosphere to business travelers.

4. Marketing Mix:

a. Product: The Service Offer has tangible products in it. There are 6 types of rooms. Club rooms, normal rooms, superior cottages, suites, deluxe rooms & old British Raj ambience rooms.

b. Restaurants – Thai food served in Paradise, Italian food in Island Café. Banquet halls with capacities ranging from 10 to 1000. Hotel has a business center with facilities like Internet, interview center, Fitness center and laundry.

c. Pricing – Differential pricing for different rooms. Hotels have an unofficial cartel for deciding the room tariff.

d. Place – Race Course Road – away from city, less pollution, relatively less traffic congestion.

The USP is 23 acres of beautiful landscape.

e. Promotion: West End is not into heavy promotion. But the Group advertises via magazines, hoardings. Some amount of event sponsoring too. They rely more on direct marketing sans any channels.

f. Physical ambience: Maintains its natural environment and latest state of the art facilities

g. People – They understand the role played by people in a service organization and market their service offer to their own employees so that the employees understand the need for maintaining high quality and standards.

h. There are seasonal variations in demand [peak season, off season]: More demand in the beginning of the week as business travelers tend to go back during weekends.

To meet these variations, Taj West End is:

o Doing tie ups with corporate clients for regular inflow of clientele, attractive discounts are offered.

o Regular sales calls to potential and existing customers.

o Intra-Group tie ups: West end has tie ups with other Taj Group Hotels in Bangalore

o International Tie ups with hotels like Shangrila in Middle East.

o Benchmarking of its operations against Ritz Scaldon of UK as this is the hotel that has got a Quality Award.

o Training of employees

o Improve quality of service

o Earn Loyalty – Retention of Customers

o Increase revenue and profitability

o Have regular customer feedback

o Data mining (details of customers)

Questions:

1. Analyze why and how West End is different from other hotels. How should the services be changed or developed if Taj wants to achieve world class status and fight competition?

2. Can capacity and supply be balanced better? Suggest solutions.

3. Do you agree with the competitive strategies adopted by the Taj West End Hotel. Clarify with proper suggestions.

Solution 1:

Taj West End is a part of Taj group owned by Tata Group which is positioned as one of the most trusted brands of India. Hence Taj West End has an edge as compared to other hotels as a Brand of Trust.

The Unique Selling Proposition of Hotel Taj West End is its 23 acres of beautiful landscape away from the rush of city with less amount of pollution and traffic congestion. Thus, the services offered in terms of Physical Ambiance is a point of differentiation for West End. The Hotel has been successful in maintaining a natural green environment for its customers to make them feel relaxed and stress free. It has perceived an eco-friendly image in the minds of target customers.

West End has also received the title of “Best Eco-friendly Hotel” as it has implemented best environmental practices like energy and water conservation, effective sewer treatment and control measurements on air, water and light.

Thus Taj hotel can be differentiated from other hotels on the basis of its natural physical ambience, environment management in all its business areas, its differential pricing strategies as compared to its prominent competitors Oberoi and Windsor Manor and its constant efforts to improve quality of service by benchmarking its operations against Ritz Scaldon of UK.

Though most of the services are in line with the aim of achieving World Class Status, the following developments can be done to fight competition:

1. Market Research: It is very important do carry proper market research not only services point of view but also to get proper knowledge of where Taj West End Hotel globally stands at current position. A 360-degree analysis of Taj West End is necessary to know its international market share and its standings in Hospitality and Hotel Sector.

2. Comparative Analysis: A thorough comparative analysis is most important aspect which will help Hotel Taj West End to deal with service gaps as compared to its competitor. As Taj has benchmarked its operations against Ritz Scaldon UK, the quality standard of Taj has lot more to improve and learn from other Hotels with World Class Status.

Ritz doesn’t provide training to their employees for more than two days, that’s the quality of employees they believe in hiring. Thus, Taj can improvise the quality of employees they are hiring who required minimum training session.

3. Multiculturalism: One of the prominent services that Hotel Taj West End can offer is Multiculturalism which not only includes hiring employees from diverse Culture & Nations but also serving the customers with all type of diversity be it in food or services. Thus Taj to achieve World Class Status it is necessary to engage customers with culturally diverse communities.

Thus, Taj has to continuously keep on improving quality of tangible products as well as intangible services to compete the World Class Hotels.

Solution 2:

As mentioned in the case study, Taj West End has the Banquet Halls with capacity ranging from 10 to 1000 which is a huge number for any Hotel. In such case it becomes a challenging task to maintain a balance between capacity and supply to meet the demands of customers.

Thus designing an optimum delivery service process using the elements of Blueprint such as Back-stage, Front-stage activities, support processes, etc. becomes an important task in service industry.

1. The Capacity Management Decisions: For balancing right supply it is also important to efficiently look after the Capacity Management Decisions. Capacity can be categorized into long term or strategical perspective and short term or tactical perspective.

To consider macro-level responses to current and future demand and supply, strategic capacity decisions are made in planning stages. This decision include number of required rooms in the hotel, land space, electricity, water required, availability of labour, the overall anticipated size (capacity) required in terms of parking, seating, production in food services. Thus Strategic Capacity decisions include the optimal use of workforce and resources, if the optimal use is not meet, beyond that capacity negative impacts starts hitting the process.

After the planning process, this capacity decision focus shifts to the short term or tactical actions which includes the number of employees required to meet the peak demand in Hotel like in the beginning of the week where there are more business travellers. It is also important to meet the supply of different party sizes at the same time. Thus, in short term capacity management the managers and planners have to manage the supply in small time durations and meet the demand in real time.

2. Designing Service Blueprint: To manage Service operations and maintain a balance in capacity and supply service blueprinting is most widely used tool. The Service Blueprint should not include multiple unnecessary stages and long procedures which are not essential for the supply of raw materials or services required. This will reduce the time required for the processes and thus will improve supply operations.

It is very important to deliver the services to the customer directly instead of involving lot of intermediaries in between or bringing a customer to the services offered.

3. Back-Stage Processes: For Hotels to manage capacity it is very important to maintain its backstage processes which includes maintaining reservations, order and billings, Maintaining facilities and equipment, Inventory, Purchases, etc. The Backstage Processes should be very much in line with the increase and decrease in capacity.

Solution 3:

1. Targeting, Positioning and Differentiation

The Competitive strategies adopted by Taj West End Hotel regarding Target customers where they are foreign or domestic business traveller as well as elite customers is very much incline with the brand perception Taj has developed.

The Positioning strategy which gives a message of “home away from home” or “office away from office” and Differentiation through its natural green environment are unique point of attraction for the Hotel. Moreover, Taj has been able to Positioned itself as one of the eco-friendliest hotels and attract elite and business customers maintaining a decent world class image in hospitability.

2. Marketing Mix:

a. Product: Hotel Taj West End has multiple variations when it comes to accommodation which helps their customers to select the best possible room they can relate to. Rooms like British Raj rooms can be targeted to high end elite customers which creates a Vintage image of the Hotel.

b. Restaurants: The food served in restaurants mostly includes Thai in Paradise and Italian in Island Café. In addition to that, Taj can also approach to different restaurants throughout the globe to provide more food variation to attract international travellers.

c. Pricing: As Taj is Targeting the elite group of customers and business travellers its pricing strategy is quite strategical. The differential pricing of Taj is comparable with Oberoi Hotel but quite high as compared to Windsor Manor Hotel.

d. Place: The most unique proposition of Taj is its wonderful place of about 23 acres away from the city with low traffic. This gives a relief and stress free meetings to its business customers and a holiday feel to families.

e. Promotion: Taj West End doesn’t believe in heavy promotion and they are more reliable on traditional methods of marketing. This is where Taj lacks its marketing strategy as compared to its competitors.

f. Digital Marketing: Taj Should adopt the digital marketing strategies like displaying its ads on social media platforms as well as travel sites like Make My Trip or Trivago. Taj can highlight its services by using the USP of natural environment and beautiful campus to target the nature loving travellers by using digital marketing strategy.

g. Personalized Advertisements: As referred in Case-Study, Taj mainly emphasises on direct marketing, in such case personalised video advertisements which can spread awareness about the services and tangible elements that Taj is providing can help Taj in global market.

h. Physical Ambiance: Taj is too much reliable on its natural environment for physical ambience and its infrastructure creates a vintage image in the minds of customers. To attract the young generation or the generation of millennials Taj should also brand itself with a retro image where youths can enjoy a quality time.

i. Total Quality Management: Taj West End has benchmarked its operations against Hotel Ritz Scheldon to improve its quality standards, moreover it should follow all the aspects of Total Quality Management (TQM) like Effective Communication, Customer insights, Employee Commitment, Strategic thinking, Integrated thinking, Fact based decisions, customer satisfaction and Continuous improvement.

Reference:

1. Pullman & Rodgers (2010) Capacity management for hospitality and tourism: A review of current approaches International Journal of Hospitality Management, 29, 177–187

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