TAJ FINAL

1 A Project Report On: EFFECT OF PRICING STRATEGIES ON REVENUE GENERATION

(With special reference to TAJ HOTEL CHANDIGARH)

Interim report SUBMITTED BY:

DIVYA SHARMA

Roll no.

Under the guidance of:

SANDEEP MAKROO SALES MANAGER

TAJ HOTEL CHANDIGARH ARMY INTITUTE OF MANAGEMENT AND TECHNOLO

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DECLARATION

I, Ms. DIVYA SHARMA do hereby declare that the project report titled “EFFECT OF PRICING STRATEGIES ON REVENUE GENERATION”is a genuine research

work undertaken by me and it has not been published anywhere earlier.

Date:

Place :

DIVYA SHARMA AIMT, GREATER NOIDA

3 Mr. SANDEEP MAKROO

SALES MANAGER TAJ HOTEL CHANDIGARH

Certificate by the organization:

This is to certify that Ms. DIVYA SHARMA, pursuing PGPM at Army Institute of Management and Technology, greater noida has worked under my supervision and guidance on her dissertation entitled “EFFECT OF PRICING STRATEGIESON REVENUE GENERATION”

at TAJ HOTEL, CHANDIGARH from 2 JUNE 2008 to JULY 25th 2008. ” To the best of my knowledge this is an original piece of work.

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Acknowledgement

Sometimes words fall short to show gratitude, the same happened with me during this project. The immense help and support received from TAJ HOTEL overwhelmed me during the project.

My sincere gratitude to Mr. SANDEEP MAKROO (SALES MANAGER,TAJ CHANDIGARH) for providing me with an opportunity to work with SALES and MARKETING(TAJ CHANDIGARH). I am highly indebted to MS SMITA JOSHI., REVENUE MANAGER, TAJ, who provided me with the necessary information and her valuable suggestion and comments on bringing out this report in the best possible way.

I also thank Prof. PARUL GUPTA, faculty guide, AIMT, GREATER NOIDA who has sincerely supported me with the valuable insights into the completion of this project.

Last but not the least; my heartfelt love for my parents, whose constant support and blessings helped me throughout this project.

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Executive summary: This project has been a great learning experience for me; at the same time it gave me enough scope to implement my analytical ability. This project as a whole can be divided into three parts:

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The first part gives an insight about the working process of reservation and sales

department and its various aspects. It is purely based on whatever I learned at Taj. One can have a brief knowledge about working process and all its basics through the project. Other than that the real servings come when one moves ahead. Some of the most interesting facts regarding marketing department have been covered.

All the topics have been covered in a very systematic way. The language has been kept simple so that even a layman could understand. All the datas have been well analyzed with the help of charts and graphs.

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The second part consists of datas and their analysis, collected through daily recording

of calls and occupancy of rooms in hotel. It covers the topic” EFFECT OF PRICING STRATEGIES ON REVENUE GENERATION”. The data collected has been well organized and presented. Hope the

research findings and conclusions will be of use. It has also covered what price is most suitable to beat competition.

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The third part gives the research findings result for “customer satisfaction”which can

be used by the hotel for improvement in their working as well as it has direct link with marketing of hotel The hotel can take further steps to approach more and more people and indulge them for taking their advices

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Contents 1. CHAPTER 1 ORGANIZATION OVERVIEW INTRODUCTION VISION ORGANIZATION STRUCTURE WHOS WHO AT TAJ CHANDIGARH SALESANDMARKETING RESERVATION

12-25 26 27 28 30 33

2. CHAPTER 2 PRICINGSTRATEGIES REVENUEMANAGEMENT RESEARCHPROCESS ANALYSIS

41-48 49-54 56-78 79

3. CHAPTER3 SURVEY REPORT

81-85

4. FINDINGS

86

5. RECOMMENDATIONS

89

6. LIMIITATIONS

92

7. QUESTIONNAIRE

93

8. BIBLIOGRAPHY

95

8

ILLUSTRATION

OCCUPANCY/WEEK ROOMS/PLAN

60 61

9 PLANS T01 TO WI & REVENUE SURVEYBARGRAPHS

62 TO 79 81-85

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Chapter 1

11

Organization overview

TAJ HOTEL CHANDIGARH

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INTRODUCTION

The Indian Hotels Company Limited (IHCL) and its subsidiaries are collectively known as Taj Hotels Resorts and Palaces and is recognised as one of Asia's largest and finest hotel company. Incorporated by the founder of the Tata Group, Mr. Jamsetji N. Tata, the company opened its first property, The Taj Mahal Palace Hotel, Bombay in 1903. The Taj, a symbol of Indian hospitality, completed its centenary year in 2003.

Taj Hotels Resort and Palaces comprises more than 60 hotels in 45 locations across India with an additional 15 international hotels in the Malaysia, United Kingdom, United States of America, Bhutan, Sri Lanka, Africa, the Middle East and Australia.

Spanning the length and breadth of the country, gracing important industrial towns and cities, beaches, hill stations, historical and pilgrim centres and wildlife destinations, each Taj hotel offers the luxury of service, the apogee of Indian hospitality, vantage locations, modern amenities and business facilities.

IHCL operate in the luxury, premium, mid-market and value segments of the market through the following:

Taj (luxury full-service hotels, resorts and palaces) is our flagship brand for the world’s most discerning travelers seeking authentic experiences given that luxury is a way of life

13 to which they are accustomed. Spanning world-renowned landmarks, modern business hotels, idyllic beach resorts, authentic Rajput palaces and rustic safari lodges, each Taj hotel reinterprets the tradition of hospitality in a refreshingly modern way to create unique experiences and lifelong memories.

Taj also encompasses a unique set of iconic properties rooted in history and tradition that deliver truly unforgettable experiences. A collection of outstanding properties with strong heritage as hotels or palaces which offer something more than great physical product and exceptional service. This group is defined by the emotional and unique equity of its iconic properties that are authentic, non- replicable with great potential to create memories and stories.

Taj Exotica is our resort and spa brand found in the most exotic and relaxing locales of the world. The properties are defined by the privacy and intimacy they provide. The hotels are clearly differentiated by their product philosophy and service design.

Taj Safaris

are wildlife lodges that allow travelers to experience the unparalleled

beauty of the Indian jungle amidst luxurious surroundings. They offer India’s first and only wildlife luxury lodge circuit. Taj Safaris provide guests with the ultimate, interpretive, wild life experience based on a proven sustainable ecotourism model.

Premium Hotels (premium full-service hotels and resorts) provide a new generation of travelers a contemporary and creative hospitality experience that matches their work-

14 hard play-hard lifestyles. Stylish interiors, innovative cuisine, hip bars, and a focus on technology set these properties apart.

The Gateway Hotel (upscale/mid-market full service hotels and resorts) is a pan-India network of hotels and resorts that offers business and leisure travelers a hotel designed, keeping the modern nomad in mind. At the Gateway Hotel, we believe in keeping things simple. This is why, our hotels are divided into 7 simple zones- Stay, Hangout, Meet, Work, Workout, Unwind and Explore.

Ginger (economy hotels) is IHCL’s revolutionary concept in hospitality for the value segment. Intelligently designed facilities, consistency and affordability are hallmarks of this brand targeted at travelers who value simplicity and self-service.

Taj Hotels Resorts and Palaces is committed to replicate its domestic success onto international shores with plans to build an international network of luxury hotels, which will provide an exemplary product-service combination and in the process create a global brand. The current international portfolio includes luxury resorts in the Indian Ocean, business and resort destinations in the Middle East and Africa, serviced apartments in the UK, the first hotel in Australia and three a top-end luxury hotels in the US.

Throughout the Company’s expansion, its mandate has been twofold: to infuse a sense of Indian heritage and culture within each diverse property, while also anticipating the needs and desires of the sophisticated traveler. Over the years, the Taj has won international

15 acclaim for its quality hotels and its excellence in business facilities, services, cuisine and interiors.

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Taj Hotels further expanded its global footprint by securing management contracts at Palm Island, Jumeirah in Dubai, Saraya Islands in Ras Al Khaimah, Aldar Group in Abu Dhabi, UAE Langkawi in Malaysia and Thimpu in Bhutan. The most significant additions to the portfolio have been The Pierre, the iconic landmark hotel on New York's Fifth Avenue, Taj Boston and Blue, Sydney.

The presence of Taj Hotels Resorts and Palaces internationally has been developed through a network of Taj regional sales and PR offices in the United Kingdom, France, Germany, Italy, Dubai, Singapore, Australia, Japan, Russia and the United States of America.

At the Taj Hotels Resorts and Palaces luxurious living and fine dining find common ground. Whether it is introducing exotic world cuisines to India or taking authentic Indian fare to the world, the Taj Hotels Resorts and Palaces is renowned for the eclectic culinary experiences it brings to its guests. Through a vast repertoire of award-winning restaurants, legendary recipes from royal kitchens and celebrated food festivals, the Taj has pioneered innovation in fine dining across the world.

16 Taj Hotels also promise a whole new experience of tranquillity and total ‘wellness’, through Jiva Spas a unique concept, which brings together the wisdom and heritage of the Asian and Indian Philosophy of Wellness and Well-being. Rooted in ancient Indian healing knowledge, Jiva Spas derive inspiration and spirit from the holistic concept of living. There is a rich basket of fresh and unique experiences under the Jiva Spa umbrella of offering, Yoga and Meditation, mastered and disseminated by accomplished practitioners, authentic Ayurveda, and unique Taj signature treatments. Royal traditions of wellness in service experiences, holistic treatments involving body therapies, enlivening and meaningful rituals and ceremonies and unique natural products blended by hand, come together to offer a truly calming experience.

IHCL operates Taj Air, a luxury private jet operation with state-of-the-art Falcon 2000 aircrafts designed by Dassault Aviation, France; and Taj Yachts, two 3-bedroom luxury yachts which can be used by guests in Mumbai and Kochi, in Kerala.

IHCL also operates Taj Sats Air Catering Ltd., the largest airline catering service in South Asia, as a joint venture with Singapore Airport Terminal Services, a subsidiary of Singapore Airlines.

Additionally, it operates the Indian Institute of Hotel Management, Aurangabad since 1993. The institute offers a three-year diploma, designed with the help of international faculty and has affiliations with several American and European programmes.

17 The Taj began a century ago with a single landmark – The Taj Mahal Palace Hotel, Mumbai. Today, the various Taj hotels, in all their variety and historical richness, are recognised internationally as the symbols of true Indian hospitality. The Company’s history is integral to India’s emergence into the global business and leisure travel community; and looking to the future, Taj Hotels Resorts and Palaces is well positioned to meet the increase in travel activity with the rapid expansion of the Indian economy.

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LOCATION

Chandigarh, the capital of the states of the Punjab and Haryana set at the foothills of the majestic Himalayas, was planned by the French architect Le Corbusier after India’s independence. The young-at-heart, fast-growing and progressive city is striking for its urban planning, impressive buildings with brise-soleil facades, well-organized sectors and broad tree-lined avenues

Taj Chandigarh celebrates the dynamic spirit of Chandigarh in its sophisticated architecture and interiors. The newly built hotel, located in Sector 17, the city’s prime business and shopping area, is a comfortable 30-minutes drive from the airport and a 15minutes drive from the railway station.

Taj Chandigarh is the city’s finest hotel and is well suited to both business and leisure travellers to ChandigarhAddress

Taj Chandigarh Block No. 9, Sector 17-A Chandigarh - 160 017 India

Tel: (91-172) 6613000

19 Fax: (91-172) 6614000

Email: [email protected]

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Facilities & Services

Guests are offered a range of comprehensive and efficient business and leisure facilities.

Facilities & Services

Hotel Business Services include:

Audio/Visual Equipment Business Centre-24 hrs Laptop on hire, with prior intimation Video Conferencing

Indoor and Outdoor banqueting facilities are available

Hotel Leisure and Other Services include:

24 hrs Front Desk Airport Transfer - On Request Astrologer On Call Banquet Facility Bar & restaurants Barber Shop

21 Beauty Salon Bell - Desk Services Car Rentals Currency Exchange Express Check in Check out Facilities For the Physically Challenged Florist Health Club Health/Ayurveda Centers Hotel Safe Internet Access Available in Rooms Internet/E-mail/Fax Facilities Interpreter Services Laundry Services Library Lounge Luggage Storage Medical Services-Doctor on Call Phone-Two Telephone Lines in Rooms Postal/Parcel Services Room Service-24 Hrs Shopping Arcade Travel Desk - Ticketing, Tours

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Rooms & Suites

Taj Chandigarh has 149 guest rooms including Superior Rooms, Deluxe Rooms, Luxury Rooms and a Suite. All the rooms are elegantly furnished and offer contemporary amenities. All the rooms have full length glass windows and some rooms offer a view of the Rose Garden and the Shivalik mountain range.

Amenities

* 42” Plasma TVs with satellite programs * Hard Flooring * Movable work table * Strong Task Lighting * 2 line direct dial telephones * In-room tea/coffee makers * Minibar * Wi-Fi Internet throughout the hotel

Room Types:

1.Superior Rooms

23 The hotel has elegantly styled and well appointed Superior Rooms, of 350 sq ft, that offer all the mentioned amenities.

2. Deluxe Rooms The hotel has Deluxe Rooms, of 350 sq ft, that offer enhanced in-room amenities and access to the private lounge. Guests are also offered a choice of buffet breakfast at the private lounge or Café 17.

3. Luxury Rooms The hotel has Luxury Rooms, of 550 to 650 sq ft, that offer enhanced amenities, some of which are partitioned into separate living and sleeping areas. In-room check in as well as Happy Hours at the private lounge are offered.

4. Presidential Suite The hotel has a luxurious two-room Presidential Suite spreading across 1080 sq ft. The suite offers a choice of special amenities and services: Complimentary buffet breakfast at the Lounge from 0730 - 2200 hrs on the fifth floor A bottle of wine in the room Happy hour at the Lounge from 1830 - 1930 hrs where we serve cocktails with a selection of hors d'oeuvers Tea / Coffee through the day in the Lounge Use of the meeting room in the Business Centre for 1 hour (per stay), subject to availability

24 Complementary ironing (1 set per stay) Personal butler on request

Food and Wine

From casual, all-day dining to speciality dining, guests can savour a choice of gourmet cuisines.

Black Lotus: Serves the choicest Schezwan cuisine for lunch and dinner. Attire: Smart Casual

Cafe 17: Café 17, the all-day dining restaurant serves an array of multi-cuisine specialties. Attire: Smart Casual

Dera: The elegant Indian restaurant with an inviting ambience. Attire: Smart Casual

25 Lava Bar: This multi-level retro-themed bar exudes verve and style. Attire: Casual

Recreation The hotel offers a choice of leisure and recreational activities and facilities that are ideal for guests wishing to unwind. The Health Club has a state-of-the-art gym and a rooftop swimming pool.Sightseeing and shopping trips can also be organized. Recreational Facilities Fitness Centre- well equipped Steam Chill Shower Roof top Swimming Pool Jacuzzi – inbuilt cold water Golf

VISION STATEMENT OF THE TAJ

To lead and become the international benchmark in the hospitality Industry, in India and in key regions of the world. To dazzle and delight the customer with the highest quality hotel products, food and beverage experience and above all exceptional service standards.

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THE CREDO OF THE TAJ

Promise to deliver: Wa rm welcome.

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Anticipatory service.

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Defect free product.

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Fond farewell.

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ORGANISATION STRUCTURE

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WHO’s WHO AT TAJ CHANDIGARH?

Mr. Anil Malhotra

General Manager

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Mr. Anmol Ahluwalia

Accommodation Manager

Chef Neeraj Chaudhry

Executive Chef

Mr. Prem Singh

Chief Engineer

Mr. Sandeep Makroo

Mr. V.R. Bhaskar

Mr.R.KMisra

Mr Rajeev Kumar.

Sales Manager

Finance Manager

PurchaseManager

Human Resource Manager

Mr. Ashish Bali

Security Manager

Mr. Sanjay Wadhwa

Food & Beverage Manager

Mr. Rahul Matthew

Mr. Gurdeep Singh

Assistant Food & Beverage Manager

Laundry Manager

29 Mr. Sanjeet Singh

Mr. Imit Arora

Duty Manager- Housekeeping

Front Office Manage

SALES & MARKETING

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Hierarchy Sales and Marketing Officer ↓ Asst. Sales & Marketing Manager ↓ Sales Executive ↓ Office Assistant A large number of radical strategic activities covered in marketing that tells the clientele about the services and facilities offered to the guest so that the clientele knows about the market mix. This is a key department in any hotel because determination of the sale is important for any hotel. The activities undertaken include determination of rooms and f&b sale, miscellaneous sales, sales of the hotel is a well guarded company secret.

Marketing includes: Range of sales activities.

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Advertising in all media.

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31 Public relation.

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Development of communication services and reservation.

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Sales techniques: Selling of hotel services is done through marketing groups or directly with public through travel agencies. The process of selling is done with certain policies in mind. Planning is important aspect that includes group and convention sales, travel agents, banquets sales. Detailed research is carried out to ascertain sources of business, other job include administering and managing the departments for the proper delivery of service sold, communicating with sources of business.

Group conventions: In this, the department evaluates the no. of rooms that are estimated to be allotted for group sales.

Banquet sales This type of business includes wedding dinner, cocktail parties, social events, etc. preestablished menu along with their prices are used so that the customer could select an appropriate menu. The main source of business is the local community in which the hotel is situated. Proper relationships are maintained with people, companies and local organizations; because they have periodic functions and meetings.

Advertising It requires careful planning and organization. The steps are as followed:

32 Carrying hotel messages to specific market.

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Advertising through media and newspaper.

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Finding what guest wants.

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Selecting most communicative media.

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Setting aside funds for research.

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Hence sales and marketing are complementary. If marketing establishes what people need then sales demonstrates how their needs could be fulfilled.

Reservation This is a section of the front office, which is the hub of the department, requests for reservation of the room from various sources and the information’s processed, properly documented, stored and retrieve at the appropriate time induce a guest his room upon arrival. Rooms being a highly perishable commodity (as the sale of rooms is linked with a

33 time element) it is the duty of the reservation department that rooms are not allowed to perish.

Modes of Reservation The different modes of reservation are as follows: Letters

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Telex

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Telegrams

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Telephones

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In Person

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E-Mail

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Fax

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Sources of Reservation The usual sources from which reservation sources are airlines, wholesale tour operators, travel agents (local and foreign), free individual travelers, groups, companies leading hotels of the world trust, instant reservation system, sales department, embassies, and institutions.

Types of Plans

34 A plan is a package proposal of rooms and meals, and some times even travel. A European plan will include only a room whereas the rest of the services would be charged for American plan, which would include meals usually breakfast and the evening meal as well as the room rental inclu ded in the room rate. The packages offered by the hotel are inclusive of a airport transfer, breakfast at the citrus and the room rate.

Guest History Card This is done in order to give a guest extra attention and special care. It's usually done for repeat clientele. For example some guest may like a non smoking room and some may like a hard mattress. This is where the front office informs the housekeeping department or the relevant department that special care must be taken in order to ensure a comfortable, carefree stay at the hotel. All such information is maintained by the front office and is fed into the computer.

Rates followed by Reservation A Rack Rate This is the highest room rate charged by the hotel. It is the rate given to the guest who does not fall into any particular category, such as a walk-in guest who requests a room for the night.

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Corporate Rates These are room rates offered to business people staying in the hotel. This can be further broken down into Business people who are frequent guests (a specified number of visits per week or per month) and guest who are employees of a corporation that has contracted for a rate that reflects all business from that corporation.

Commercial Rates These are room rates for business people who represent and have infrequent or sporadic patterns of travel. Collectively this group can be a major segment of hotel guest and thus warrant a special rate..

Group Rates These are rates offered to a large group of people visiting the hotel for a common reason. The marketing and sales department usually negotiates this rate with a travel agency or with a professional organization.

Family Rates These are room rates offered to encourage visits by families with children. This rate is offered to families during seasonal or promotional times.

Day use Rate A room rate based on the length of stay of a guest, which is applied to guests who use a room only for 3-4 hours in a day.

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Process of Reservation All the reservations coming in are recorded on a form called the reservation form. The detail such as the name of the guest booking the reservation, company name, address, telephone number etc. it also consist of the name of the guest, his designation, arrival and departure time, mode of payment, type of room, number of persons and so on.

37 The reservation is then fed into the computer, the availability is checked and confirmation letter that may be sent either through e-mail or through fax and then the room may be blocked for the following dates. Billing may be direct or indirect; increase of direct billing the guest pays for all his expenses through his personnel account. In indirect billing the company pays on behalf of the guest, a letter of a fax must be sent by the company on its letterhead stating the mode of payment. If payment be made after a certain period of time, or on behalf of the hotel a on time credit authorization slip is filled up and signed by the finance manager and also by the marketing and sales manager. 3 copies are made and filled in the necessary files. The reservation forms are clotted according to dates and alphabets of the guest lasts name. Special importance is given to group reservation; a reservation assistant is appointed as the group coordinator and will carry out all the operations relating to the group and will coordinate with the marketing and sales person or with the travel agent who has made the reservation.

Reservation codes Reservation codes are a sequential series of alphanumeric combinations that provide the guest a reference for a confirmed or a guaranteed reservation. This code indicates that accommodation has been secured for a specific date with a commitment to pay for at least the first room night. The code will identify the hotel chain/referral group, the arrival

38 date and the departure date the type of accommodation, the mode of payment and the sequential number of reservation.

Fore Casting Reservation Forecasting or room forecasts, which involves projecting room sales for a specific period of time, is naturally the next step after the data form the reservation process has been collected, this step includes previewing the effects of reservation on the income statement, scheduling labour, and planning for use of facilities. This process of projecting sales and related expenses is very important to the successful management of the hotel. This information is also important to the financial controller, General manage and to the owner of the hotel. They use this information in managing the finances of the hotel; it is also used to project the yearly or quarterly financial projections.

Reservation Cycle 

Receive guest call

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Listen to guest request

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Check for room availability

39 

Create profile & ask for company, nationality, inner circle member.

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If the guest is 1st timer then apply BAR rates.

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Make reservation filling all the required details in the profile

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Reconfirm the reservation, give the conformation no. to the guest.

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Update in Fidelio, take print out.

THINGS TO REMEMBER 

Reservation staff should identify themselves to the caller.

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Greet the guest like: Good morning Reservations This is XTZ calling How may I assist you

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Use head sets to minimize background sound & also it increases efficiency of the person as both the hands are free.

Chapter 2

40

1.

PRICING STRATEGIES

2.

RELATION BETWEEN PRICING AND REVENUE GENERARTION

3.

INTERPRETATION OF RESULT

PRICING STRATEGIES

What do the following words have in common? Fare, dues, tuition, interest, rent, and fee. The answer is that each of these is a term used to describe what one must pay to acquire

41 benefits from another party. More commonly, most people simply use the word price to indicate what it costs to acquire a product.

The pricing decision is a critical one for most marketers, yet the amount of attention given to this key area is often much less than is given to other marketing decisions. One reason for the lack of attention is that many believe price setting is a mechanical process requiring the marketer to utilize financial tools, such as spreadsheets, to build their case for setting price levels. While financial tools are widely used to assist in setting price, marketers must consider many other factors when arriving at the price for which their product will sell.

. For some marketers more time is spent agonizing over price than any other marketing decision. In this tutorial we look at why price is important and what factors influence the pricing decision.

What is Price?

In general terms price is a component of an exchange or transaction that takes place between two parties and refers to what must be given up by one party (i.e., buyer) in

42 order to obtain something offered by another party (i.e., seller). Yet this view of price provides a somewhat limited explanation of what price means to participants in the transaction. In fact, price means different things to different participants in an exchange:

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Buyers’ View – For those making a purchase, such as final customers, price refers to what must be given up to obtain benefits. In most cases what is given up is financial consideration (e.g., money) in exchange for acquiring access to a good or service. But financial consideration is not always what the buyer gives up. Sometimes in a barter situation a buyer may acquire a product by giving up their own product. For instance, two farmers may exchange cattle for crops. Also, as we will discuss below, buyers may also give up other things to acquire the benefits of a product that are not direct financial payments (e.g., time to learn to use the product).

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Sellers’ View - To sellers in a transaction, price reflects the revenue generated for each product sold and, thus, is an important factor in determining profit. For marketing organizations price also serves as a marketing tool and is a key element in marketing promotions. For example, most retailers highlight product pricing in their advertising campaigns.

Price is commonly confused with the notion of cost as in “I paid a high cost for buying my new plasma television”. Technically, though, these are different concepts. Price is

43 what a buyer pays to acquire products from a seller. Cost concerns the seller’s investment (e.g., manufacturing expense) in the product being exchanged with a buyer. For marketing organizations seeking to make a profit the hope is that price will exceed cost so the organization can see financial gain from the transaction.

Finally, while product pricing is a main topic for discussion when a company is examining its overall profitability, pricing decisions are not limited to for-profit companies. Not-for-profit organizations, such as charities, educational institutions and industry trade groups, also set prices, though it is often not as apparent . For instance, charities seeking to raise money may set different “target” levels for donations that reward donors with increases in status (e.g., name in newsletter), gifts or other benefits. While a charitable organization may not call it a price in their promotional material, in reality these donations are equivalent to price setting since donors are required to give a contribution in order to obtain something of value

Importance of Pricing

44 When marketers talk about what they do as part of their responsibilities for marketing products, the tasks associated with setting price are often not at the top of the list. Marketers are much more likely to discuss their activities related to promotion, product development, market research and other tasks that are viewed as the more interesting and exciting parts of the job.

Yet pricing decisions can have important consequences for the marketing organization and the attention given by the marketer to pricing is just as important as the attention given to more recognizable marketing activities. Some reasons pricing is important include:

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Most Flexible Marketing Mix Variable – For marketers price is the most adjustable of all marketing decisions. Unlike product and distribution decisions, which can take months or years to change, or some forms of promotion which can be time consuming to alter (e.g., television advertisement), price can be changed very rapidly. The flexibility of pricing decisions is particularly important in times when the marketer seeks to quickly stimulate demand or respond to competitor price actions. For instance, a marketer can agree to a field salesperson’s request to lower price for a potential prospect during a phone conversation. Likewise a marketer in charge of online operations can raise prices on hot selling products with the click of a few website buttons.

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Setting the Right Price – Pricing decisions made hastily without sufficient research, analysis, and strategic evaluation can lead to the marketing organization losing revenue. Prices set too low may mean the company is missing out on

45 additional profits that could be earned if the target market is willing to spend more to acquire the product. Additionally, attempts to raise an initially low priced product to a higher price may be met by customer resistance as they may feel the marketer is attempting to take advantage of their customers. Prices set too high can also impact revenue as it prevents interested customers from purchasing the product. Setting the right price level often takes considerable market knowledge and, especially with new products, testing of different pricing options. •

Trigger of First Impressions - Often times customers’ perception of a product is formed as soon as they learn the price, such as when a product is first seen when walking down the aisle of a store. While the final decision to make a purchase may be based on the value offered by the entire marketing offering (i.e., entire product), it is possible the customer will not evaluate a marketer’s product at all based on price alone. It is important for marketers to know if customers are more likely to dismiss a product when all they know is its price. If so, pricing may become the most important of all marketing decisions if it can be shown that customers are avoiding learning more about the product because of the price.

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Important Part of Sales Promotion – Many times price adjustments are part of sales promotions that lower price for a short term to stimulate interest in the product marketers must guard against the temptation to adjust prices too frequently since continually increasing and decreasing price can lead customers to be conditioned to anticipate price reductions and, consequently, withhold purchase until the price reduction occurs again.

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Factors Affecting Pricing Decision

47 For the remainder of this tutorial we look at factors that affect how marketers set price. The final price for a product may be influenced by many factors which can be categorized into two main groups:

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Internal Factors - When setting price, marketers must take into consideration several factors which are the result of company decisions and actions. To a large extent these factors are controllable by the company and, if necessary, can be altered. However, while the organization may have control over these factors making a quick change is not always realistic. For instance, product pricing may depend heavily on the productivity of a manufacturing facility (e.g., how much can be produced within a certain period of time). The marketer knows that increasing productivity can reduce the cost of producing each product and thus allow the marketer to potentially lower the product’s price. But increasing productivity may require major changes at the manufacturing facility that will take time (not to mention be costly) and will not translate into lower price products for a considerable period of time.

External Factors - There are a number of influencing factors which are not controlled by the company but will impact pricing decisions. Understanding these factors requires the marketer conduct research to monitor what is happening in each market the company serves since the effect of these factors can vary by market

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Steps in the Price Setting Process

We view price setting as a series of decisions the marketer makes in order to determine the price direct and indirect customers pay to acquire the product. Direct customers are those who purchase products directly from the marketer. For example, consider the direct pricing decisions that take place when a new novel is sold:

The steps include: 1. Examine Company and Marketing Objectives 2. Determine an Initial Price 3. Set Standard Price Adjustments 4. Determine Promotional Pricing 5. State Ownership and Payment Options

What is Revenue Management?

To sell the right product to the right

49 customer at the right time for the right price, thereby maximizing revenue from a company’s product.

For rational pricing

Things important are

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51

Volume Relationship Considerations

Maintain long term relationships with customers who: • Demonstrate control • Have the ability to move market share Special Corporate Rate offered to those who: • Demonstrate Control • Have day of week patterns that build shoulder night occupancy • Provide volume during periods of low demand

52

53

Taj chandigarh had to come up with various pricing strategies to promote its business Till now it had monopoly in the market, but now Mount view as another five star it needs to redefine the strategy And over period of time other five stars hotel are expected to be city, so need of the hour to do maximum promotion and build volume relationship with customer.

54

55

RESEARCH PROCESS

56

RESEARCH PROCESS Research – Research is common parlance refers to a search for knowledge. The

Advanced Learner’s Dictionary of Current English lays down the meaning of research as “A careful investigation orinquiry specially through search for new facts in any branch of knowledge” According to Redman & Mory “A systematized effort togain new knowledge.”

The present study focuses on 1. EFFECT OF PRICING STRATEGIESON REVENUE GENERATION”. “

2. CUSTOMER SATISFACTION EVALUATION

Research Methodology- It is the way to systematically solve the research problem. It may be understood as a science of studying how research is done scientifically. In it we study the various steps that are generally adopted by a researcher in studying his research problem along with the logic behind them.

Types of research Design:1. Descriptive Research Design – Descriptive research studies are those studies which are

concerned with describing the characteristics of a particular individual, or of a group. 2. Hypothesis Research Design – Hypothesis testing research studies (generally known as

experimental studies) are those where researcher tests the hypotheses of causal relationship between variables.

57 3. Exploratory Research Design - Exploratory research studies are also termed as

formularize Research studies. The main purpose of such studies is that of formulating a problem for more precise investigation or of developing the working hypothesis from and operational point of view. The major emphasis in such studies is on the discovery of idea and insights. As such the research design appropriate for such studies must be flexible enough to provide opportunity for considering different aspects of problem under studies. This study is descriptive and analytical (EFFECT OF PRICING STRATEGIESON REVENUE GENERATION”) in nature while it seeks to identify the present

scenario of the pricing practices being followed by the leading hotel TAJ CHANDIGARH for revenue generation

DEFINING

THE

RESEARCH

PROBLEM

AND

RESEARCH

OBJECTIVES The definition of the problem includes the study of the topic “ EFFECT OF PRICING STRATEGIES ON REVENUE GENERATION”. It sates the relationship between

pricing and revenue. 1. To know the different pricing technique. 2. Beter plan implementation. 3. Measures to be taken in future for pricing .

58 

DEVELOPING THE RESEARCH PLAN

Data Source: The type of data taken into consideration for this topic is the primary data.. It was collected by me while doing tanning with marketing department

with Taj hotel Chandigarh

VARIOUS PARAMETER USED IN RESEARCH OF CUSTOMER SATISFACTION



Research Design - Descriptive



Data Source - Primary & Secondary data



Research Instrument - Questionnaire



Types of Questionnaire -Structure and non-disguised



Sample Plan - chandigarh



Sample Size - 66



Sampling Procedure -Non Probability sampling

(Judgment sampling) 

sampling method - Personal survey method

through Preparation of questionnaire

59

ANALYZE THE INFORMATION The next step is to extract the pertinent findings from the collected data.

Rate Plan Name

T01

Description - Flat rate - BBF - Early check in and late check out - Both ways airport transfers - INR 2000 hotel credit for F&B/Laundary

T02

Stay for 2 nights and get the 3rd nightcomp

Restriction

- Min 2 nights length of stay - Non refundable deposit guarantee at the time of booking

Min3nightslengthofstay.

Cancellation Policy

No cancellation allowed

48hrs

Lowest unrestricted rate

T04

generallyonroomonlybasis

T05

Lowest unrestricted rate inclusive of buffet breakfast at the coffee shop

Unrestricted

20% off the BAR

10 days advance booking Non refundable deposit guarantee at the time of booking

No cancellation allowed

Min 3 nights length of stay Non refundable deposit guarantee at the time of booking

No cancellation allowed No cancellation allowed

T07

T08

-

20% off the BAR rate inclusive of breakfast 20% discount on F&B upgrade subject to avaialbility

Unrestricted

T09

10% off the BAR

Max advance booking days -3

W1

25% off the BAR

Mandatory stayover any one night - Fri, Sat or Sun

48hrs

48 hrs

48 hrs

60

.

1. THIS table gives the number of occupancy per week, recorded while doing tanning.

Hotel was in sold out position for 6 days i.e all 147 rooms booked

Week→ Days ↓

Week1

Week2

Week3

Week4

Week5

Week6

Monday

101

95

84

94

86

147

Tuesday

92

81

92

66

92

146

Wednesday

75

79

91

71

86

92

Thursday

68

75

90

96

96

88 75

Friday

89

101

75

98

95

Saturday

147

130

147

101

141

92

Sunday

147

138

147

132

147

101

Total

719

699

727

658

743

741

61

Occupancy/week

2. Rooms/plan

2. This table gives number rooms sold under each scheme/rate codes

62

180 160

Plan

140

WEEK 1

120

WEEK2

100

T01

T80 02

WEEK 3

T04

T05

T07

T08

T09

C1

WEEK 4 WEEK 5

60

Week

68

125 40

55

60

40

94

45

WEEK 2

62

20 139

60

78

15

85

WEEK 3

75

1140

50

69

37

89

WEEK 4

79

109

T 01 70

T65 02

T35 04

T88 05

WEEK 5

85

155

89

50

0

WEEK 6

87

118

82

53

42

WEEK 1

W1

115

117

48

90

122

36

150

107

T0 397

T0 8 97

T115 09

80

47

128

109

87

50

121

101

WEEK 6

W1

C1

63

REVENUE

1130000

968000

972000

RATES:

SUPERIOR (SINGLE): Rs 10,000 SUPERIOR (DOUBLE): Rs 11,000

LUXURY (SINGLE): Rs 12,000 LUXURY (DOUBLE): Rs 13,000

DELUXE (SINGLE): Rs 14,000 DELUXE (DOUBLE): Rs 15,000

REVENUE GENERATED:

832000

826000

765000

4667000

64

DELUXE 29%

SUPERIOR 38%

LUXURY 33%

PLAN T02

ROOM SUPERIOR TYPE WEEK WEE 1K WEE 2K

DELUXE

TOTAL

SINGLE

DOUBLE

SINGLE

DOUBLE

SINGLE

DOUBLE

40 38

15 29

25 27

11 15

16 15

18 15

WEEK3

21

WE4 EK

28

WEE 5K WEEK6 TOTAL

45

REVENUE

LUXURY

24 18

25 19

35

17 13

20

19 10

18

125 139 8

9

22

114 109

15

155

30 202

28 149

24 140

16 90

12 94

8 73

2020000

1639000

1680000

1170000

1316000

1095000

118

8920000

65

RATES: SUPERIOR (SINGLE): Rs 10,000 SUPERIOR (DOUBLE): Rs 11,000 LUXURY (SINGLE): Rs 12,000 LUXURY (DOUBLE): Rs 13,000 DELUXE (SINGLE): Rs 14,000 DELUXE (DOUBLE): Rs 15,000 REVENUE GENERATED:

DELUXE 27%

SUPERIOR 41%

LUXURY 32%

66

PLAN T04

ROOM SUPERIOR TYPE WEEK WE1EK WE2EK

SINGLE 14 15

WEEK3 WE4EK WE5EK WEEK6 TOTAL

REVENUE

DOUBLE 13 14

14 20 29

LUXURY SINGLE 12 13

10 14 18

DELUXE

DOUBLE 10 10

10 13 15

SINGLE 5 7

8 13 14

TOTAL

DOUBLE 1 1

5 6 7

55 60 3

4 6

50 70 89

27 119

17 86

14 77

13 68

6 36

5 20

1190000

946000

924000

884000

504000

300000

82

4748000

67

RATES:




DELUXE 17%

SUPERIOR 45%

LUXURY 38%

68

PLAN T05

ROOM SUPERIOR TYPE WEEK WE 1EK WE2EK

SINGLE 15 20

WEEK3

21

WE4EK

18

WE 5EK WEEK6 TOTAL

15

REVENUE

DOUBLE 17 19

LUXURY SINGLE 12 16

12 14

DOUBLE 8 12

17 14

10

DELUXE

10 12

12

SINGLE 5 7

DOUBLE 3 4

6 5

7

TOTAL 60 78 3

2

6

0

50

17 106

12 84

13 84

6 55

3 32

2 14

1060000

924000

1008000

715000

448000

210000

RATES:

SUPERIOR (SINGLE): Rs 10,000

69 65 53

4365000

69 SUPERIOR (DOUBLE): Rs 11,000



DELUXE 15%

SUPERIOR 46% LUXURY 39%

PLAN T07

70 ROOM SUPERIOR TYPE WEEK W1EEK W 2EEK

SINGLE 9 6

WEEK3 W4EEK W 5 EEK

LUXURY

DOUBLE 8 2

17

SINGLE 12 2 5

8

0

DOUBLE 5 3

8

16

SINGLE 3 1

3

4

0

DELUXE

0

3 1 2

3

40 15 2

2

0

TOTAL

DOUBLE

2

0

0

0

WEEK6 TOTAL

10 58

8 34

12 35

6 20

3 11

3 11

REVENUE

464000

299200

336000

208000

123200

132000

RATES:



37 35 42

1562400

71


DELUXE 16%

SUPERIOR 49% LUXURY 35%

PLAN T08

ROOM SUPERIOR TYPE WEEK WE1EK WE2EK WEEK3

SINGLE 22 22

DOUBLE 23 20

25

18

LUXURY

DELUXE

SINGLE

DOUBLE

20 19

12 9 21

SINGLE 14 12

10

TOTAL

DOUBLE 3 3

11

94 85 4

89

72 WE4EK

26

20

14

11

15

2

WE5EK WEEK6 TOTAL

24

22

13

11

10

0

REVENUE

88 80

28 147

19 122

20 107

9 62

9 71

2 14

1176000

1073600

1027200

644800

795200

168000

RATES:




87

4884800

73

DELUXE 20% SUPERIOR 46%

LUXURY 34%

PLAN T09

ROOM SUPERIOR TYPE WEEK W1 EEK W2 EEK

SINGLE 10 11

WEEK3 11

W5 EEK WEEK6 TOTAL

10

REVENUE

DOUBLE 9 9

10

W4EEK

LUXURY SINGLE 12 12

6 6

DOUBLE 6 7

10 9

9

DELUXE

8 9

13

SINGLE 5 5

DOUBLE 3 4

1 3

7

TOTAL

45 48 1

1

5

36 39

3

47

10 62

10 49

13 69

8 45

5 24

4 16

558000

485100

745200

526500

302400

216000

50

2833200

74

RATES: SUPERIOR (SINGLE): Rs 9,000 SUPERIOR (DOUBLE): Rs 9,900



75

DELUXE 18% SUPERIOR 37%

LUXURY 45%

PLAN W1

ROOM SUPERIOR TYPE WEEK WE1 EK WE2EK

SINGLE 30 28

WEEK3

21 15 40

WE4EK

32

WE5EK

50

WEEK6 TOTAL

DOUBLE

DOUBLE

28 25

12 8 38

26

29

12

DOUBLE

16

115 90 10

1

15 5 50

TOTAL

8 2

14

6 30 175

SINGLE 16 12

7

28 28 144

DELUXE

SINGLE

34 17

43 223

LUXURY

0 11 84

150 97 128

4 25

121

76

REVENUE

1672500

1188000

1575000

RATES:




487500

882000

281250

6086250

77

DELUXE 19%

SUPERIOR 47%

LUXURY 34%

CONTRIBUTION OF DIFFERENT PLANS IN THE TOTAL REVENUE This table tells the result of revenue generated under each plan. So, it is clearly seen that plan BOGO i.e. T02 AND WEEKEND PLAN brings the most occupants in hotel and more revenue is generated by the hotel. So it is must for the hotel to analyze the market and come up with best pricing technique to remain in the market.

78

9000000 8000000 7000000 6000000 5000000 4000000 3000000 2000000 1000000 0

REVENUE

T01 T02 T04 T05 T07 T08 T09 W1

T01 W1 17%

12%

T09 7% T02 24% T08 13%

79

T01

W1

12%

17%

T09 7% T02 24% T08 13% T07 4%

T05

T04 12%

11%

CHAPTER 3

80

SURVEY REPORT

LOCATION AMBIENCE SERVICE

15 17 33

1. What do u prefer most at taj Chandigarh?

35 30 25 20 PREFFERED

15 10 5 0 LOC A TON

AMBIENCE

2. What is maximum length of stay? 1 DAY

28

2 DAYS >2DAYS

13

25

SERVI C E

81

30 25

3.

Age of

20

people

15 DAYS

10

staying at

5 0 1 da y

2 da ys

more than 2 days

15-25 yrs

3

25-35 10 yrs 35-45 25 yrs 45 & above

28

taj?

82

30 25 20 15

AGE

10 5 0 15-25 yrs

25-35yrs

35-45yrs

45 & abo ve

4. Reason for visiting Taj Chandigarh? BUSINESS

46

LEISURE

20

50 40 30 REASON

20 10 0 BUSINESS

5.

LEISURE

Which restaurants you like most within Taj?

DERA B.LOTOUS LAVA CAFE17

20 10 7 28

83

30 25 20 15

RESTRA

10 5 0

6.

DERA

B.LOTOUS

LAVA

Does Taj offer u value for money? YES NO

60 6

60 50 40 30

VALUE

20 10 0 YES

NO

7. This hotel you will prefer for? BUSINESS FAMILY STAY FRIENDS

38 9 1

GATEWAY SOLO 18 TRAVELLING

CAF E17

84

40 35 30 25 20 15

PREFRENCE

10 5 0 BUSINESS

fam ily stay

friends gateway

8. Would u like to visit the hotel again?

YES NO

58 7

60 50 40 30

VISIT AGAIN

20 10 0 Y ES

NO

solo traveling

85

FINDINGS Revenue management is a process that can significantly increase revenues of capacity-

constrained firms through better inventory management and pricing. By using RM concepts, these firms can protect premium inventory for sale at higher prices, stimul ate market growth by offering discounts and minimize wastage of perishable inventory.

Some Characteristics:

CHARACTERISTICS

HIGHERPRICE

LOWERPRICE

Physical Fences

Pool view, ocean view, hill View

Non-scenic view view Bigger room with more

Smaller rooms with fewer

facilities and gadgets

facilities

Size Temporal

Weekdaybookings

Weekendbookings

Logical Fences

Short stay. Often one or two

Longer stay. One night revenue

days

can spoil three nights revenue

Length of Stay

86

when demand is high Cancellations and High penalty for cancellation Flexibility

rescheduling are allowed at a and schedule changes low penalty Bookings are made very close

Time of Purchase

to date of check-in

Bookings are made quite early

Are rewarded loyalty Privileges

privileges either as free

No privileges

services or free stay vouchers Size of Business

Corporate business customers

Self funding vacationers

Provided

booking frequently

booking rarely

Physical delivery and Point of Sale

By email or phone confirmations

Survey findings: 1. At the survey conducted upon 66 people, it was found that people visiting here are

Basically for business purpose, as Chandigarh is not a tourist spot, so a huge potential can be still exploited if it works with collaboration with Chandigarh tourism. 2. It has a galore of facilities and all these are well maintained. 3. The service rendered by the hotel staff is exemplary. The rooms are designed with

great care and precision. Everything about the room makes you feel like staying there forever. The toiletries provided by this hotel are of a high standard and most of them are boutique products.

87 4. The gym is well equipped and the steam bath is very relaxing after a hectic day at

work. The swimming pool is majestic and is located on the first floor of the hotel with a great view of the surroundings. 5. The hotel has a shopping complex inside it to keep the guests busy in the evening! The

corridors are also designed with great care to keep the guests comfortable. 6. Then the hotel is placed in sector 17 where the market is. Also the rose garden is very

close. 7. Service provided is at its best.

88

Recommendations Few ways that an hotelier can do to improve sales 1. Myth of selling rooms at lower rate First, one needs to overcome this myth that lowering the room rates would sell more

rooms and increase the room revenue. It may sell a few more rooms, but it rarely sells enough rooms to offset lowered rates. Its simple economics, simply selling more rooms increases expenses, while even slightly higher rates increase profit. As occupancy demand increases, ADR should increase as well.

The tell-tale sign of a hotel-in-trouble is to see increase in occupancy and decrease in average rate. An hotelier who understands and employs the tactics of revenue management monitors and adjusts rates in reaction to fluctuations in current and future occupancy demand.

For many hotel owners and managers, reducing rates is the lazy-man form of marketing. It’s generally their first thought when sales are low, after-all, it takes very little thought and certainly very little research and/or effort. And, it also ignores the fact that people don’t buy rate, they buy value. Sometimes, lower rates are interpreted as having lower value or ’too good to be true’.

When sales demand is low, one should look to value-added marketing and position the hotel properly within your marketplace. If the hotel deserves to be in the number one

89 position because of its location, facilities and amenities, one should make sure it is positioned that way.

2. The Power of the Internet

Take a serious look at a hotel’s web site, next year; more than 65% of a hotels business will be directly or indirectly influenced by the Internet. Before an hotelier looks to have another web site designed , he should get an analysis of the current site. A good analysis will give him a clue as to what is working or isn’t working very well on his hotel’s site.

This analysis can be used to guide the new designer to create a functional web site. One should remember that search engine optimization must be incorporated into the design of the site; it’s not something used after the site is completed.

It’s an absolute fallacy to think that SEO can be applied to a poorly designed web site to increase traffic. SEO must be incorporated into the design of the site itself.

The number of hotels getting ripped-off by techie-talking web designers is astounding. An article written by a web site design company thinks that, having an average of only 2% of site visitors who actually make a reservation is a good average.

The site needs to be designed to be easily found through search and, once found, it needs to have the necessary elements of location, facilities, attractions, and value to persuade its visitors to make a reservation.

3. Commitment to Revenue Management

90 It is very important to make a commitment to learn and use revenue management to increase occupancy and average rate. It takes a little effort to do the necessary research, but the rewards are great.

Revenue management relies upon an hotelier’s ability to look into the near and distant future to view occupancy demand and making rate decisions. Measuring reservation booking pace and being aware of occupancy generators in the hoteliers place creates smart decisions.

4. Technology One should go online and subscribe to at least three free online newsletters. Keep ones knowledge base current with the happenings in the industry. One can learn a great deal from the successes and failures of others.

91

Limitations 1. Contracted rates could not be calculated as it can not be disclosed. It’s the hotel

policy. 2. More calculation of revenue could be done regarding restraints. but due to time

limitation cold not be performed.. 3. The work is only in context of one hotel i.e. Taj chandigarh 4. Unavailability of data especially promotional strategies of competitors. 5. Some errors might have occurred due to environment. 6. Sample taken for research was very small.

92

Exhibit 1

Questionnaire QUESTIONNAIRE FOR CONSUMER Ques.1- What do find most impressive about Taj Chandigarh? a) location b) ambience c) service

Ques. 2- Maximum days of stay at Taj Chandigarh...? a) 1 DAY b) 2DAYS c) more than 2 DAYS

Ques. 3- Your age is………? a) 15-25 yrs. b) 25-35yrs. c) 35-45yrs. d) 45 & above

Ques. 4- Reason for visiting Taj Chandigarh? a) business b) leisure

Ques. 5-Which restaurant you like most within Taj? a) Lava bar b) black lotus c) dera d) café 17

Ques. 6- Does Taj offer u value for money? a) yes b) no

93 Ques. 7- This hotel you will prefer for? a) business b) family stay c) friends gateway d)solo traveling

Ques. 8- would u like to visit the hotel again? a) yes b) 2 no

Ques.9 - Any suggestions

……………………………………………………………………… ………………………………………………………………………

Personal information Name-……………………………. Address-...………………………………………………………….. ……………………………………………………………………… ……………………………………………………………………… Gender-……………………………… Age-…………………………………..

Occupation-…………………………………………………

94

Bibliography: The readings which rendered all possible help and guidance in finalizing the marketing are:Marketing Concept: Philip Kotler Research Methodology: C.R. Kothari Marketing Management: Philip Kotler WEB SITES

www.google.com

TAJ FINAL

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