The role of operation management in the hospitality industry affects demand patterns, resources scheduling, and operational capacity. It is one of the most difficult activities for managing operations of hospitality business(Xu and Gursoy, 2015). This challenge faces by the operation manager of the company. This study is based on Hilton. It is the largest hotel and resort in the UK. This assignment will analyze of nature of hospitality products and services. It will evaluate factors that affect hospitality operations. It will also compare customers' profiles and their differing expectations and requirement in hospitality provisions. It will analyze the key stages of product and services development.
1.1 Identify the nature of hospitality product and services areas
Hospitality industry is considered to be a large part of service providing industry according to customer’s need. It is totally based on the concept of customers’ wants and requirement of both individual and a group of families. Hilton hotel and resort which is one of the most well-known hospitality hotel, globally spread over a wider area and centre of attraction for most of the families as well as travellers which allows the Hilton organisation to generate a very high revenue(Chen and Chen, 2014). Hospitality products are the substance of a hotel design which includes various components like accommodation, sightseeing, food and beverages. Whereas hospitality services refer to the room services, resorts, club, breakfast and lunch services and providing all the needs of the customers. It also includes tangible and intangible elements. As Hilton is a worldwide hotel in hospitality industry it provides many services to the customers like it offers Hilton resort, which has well furnished rooms, pools and spa. This also includes online booking of rooms which is an intangible services for the customers. Hilton hotels consists of other food and beverages services like it serves different types of dishes at meal, lunch and dinner that are planned according to customers taste and preferences. The main motive of providing their services to the client is to gain more and more customers to the organisation in order to generate a high revenue as well as to spread its entity over a larger area.
1.2 Measure the different influences affecting the patterns of demand within hospitality operations
The taste and preferences of each and every person is different so there demands also changes according to their requirement. Due to changes in needs and demands of the customers the hotels also had to give priority to the customer’s postulates in order to meet the needs of clients. .There are many factors that affects the pattern of demands in Hilton hotel. These factors are as follows.
- Seasonality: This factor influences the demand pattern of the Hilton organisation. As the taste and preferences of every customer is different. For example during summer season most of the travellers as well as families or individuals are attracted to the Hilton resorts, which has the beautifully organised gardens for customers as well as pool facility. Due to seasonal demands by the customers, the management of Hilton hotel had to add various dishes in there menu planning which are acceptable by the clients during different seasons(Davis and et. al., 2018). They always had to give priority to the customers taste and preferences. Through providing good services to the people, it is capable enough to add multiple numbers of customers to its organisation which in turn will generate an appropriate revenue for them.
- Healthy leaving: Nowadays, people are getting very conscious about their health. Customers don't want an unbalanced diet in there food which is unhealthier for them or which affects negatively to their body. Hilton which is a well organised hotel with talented food staff always makes sure that the meal lunch or dinner they are serving has all types of nutrients and balanced diet within it, In order to satisfy the customers requirement. For example the firm offers nutritious salad during lunch and dinner which are of good quality and are also healthy for their clients. Through this, the organisation is capable enough to meet the customers taste and preferences (Hertzman, Moreo and Wiener, 2015).
- Economic factor: This factor is related to the economic condition of consumers which includes high inflation rates, supply demand, unemployment etc. if the inflation rates increases than organisation also had to increases its products prices and this would influence the demands of consumers as they will no longer be able to buy the products according to there needs and requirement. If persons is unemployed ,than this would also affect the demands of customers like they would no longer be able to buy good quality products , they would go for cheaper food products and due to unemployment this will affect the demands of customers.
1.3 Comparison of customer’s profile and fulfilling their requirements and needs.
Economic condition of customers also influences the organisation plans as it is not required that every client has a good financial background. A customer with low profile income would search for cheap hotels with a valuable price whereas customer with high income profile would choose for the best hotels and restaurants that has all the facilities within it. So for an organisation it is very important to analyse the profile structure of a customer so that they can design there menu or strategies according to that. A customers profile can be defined in following ways.
- Spending power: A customer with good economic condition would choose to spend more over the good quality products whereas a customer with low economic condition would go for low quality products. It totally depends on the financial condition of a person. The Hilton hotel consists of both high income and low income profile customers (Lopes, 2016). So, it strategies its services like food and beverages, room price according to the spending power of different type of customers. And it also provides the food products which are of good quality as well as which costs very less to the common people.
- Menu range: Menu is a very main concern for a customer as well as for an entity. Nowadays people are getting very conscious about what they eat and what kind of diet they are using in their food.
1.4 Factors affecting average spending power
There are various factors that are affecting on average spending power of Hilton in hospitality industry. If size of income is very high of customers, so that they are highly spending for purchasing products and services. Services includes hotel, resorts etc. In order to that, if customers are highly standard, so that they are spending more for buying luxury services of Hilton. On other hand, if Hilton is not providing effective services, so that this affects on average spending power.
If consumer's income is very low, so that they are not purchasing products and services of Hilton. These factors are affecting on average spending power on hospitality operation. Spending power depends upon the different factors that includes income, inflation rate etc. These elements are affecting on customer's perspective and demand of product as well as services of the Hilton.
2.1 Stage in product and services development in hospitality operation
Hilton is the largest and multinational hotel and resorts in UK. The operation manager of company follow different stages for development of products and services of their business. Such as stages:
Idea generation: The operation manager of Hilton generates various ideas for development of different products and services. They are generating thoughts that includes room divisions, foods and beverages, housekeeping services, appropriates accommodation etc. Managers make sure that providing the best services and products to customers(Pereira-Moliner, and et.al ., 2016).They also create innovative ideas regarding customer's demand, feedbacks, improving existing products and services.
Idea screening: After generating ideas, operation manager screening ideas for development of products and services of Hilton. In this stage, they assess market and customers needs, expectation, behaviour by taking all services and products. Therefore, managers make sure that developing new as well as existing services.
Concept development and testing: This stage is important in developing products and services of Hilton. Operation manager make sure that proper utilization of resources, better quality products and services, affordable prices of facilities, experience and values. On other hand, manager test the concept that includes features, prices and requirement of changes in products( Van der Wagen and Goonetilleke, 2015).
Product development: After concept development and testing stage, operation manager develops products and services of Hilton. In this stage, they remove poor concept, identifying customer demand and needs for developing products and services.
2.2 Features of customer perception of products and services
There is different perception of customers, so that operation manager make sure that providing better services to consumers. Therefore, they identify different features of customer’s perceptions towards their products and services.
Brand image: The brand image of products and services is essential requirement of customers. Therefore, operation manager makes sure that increasing brand image of their products in market, so that customers fulfil their needs and wants. Brand image refers to quality and attractiveness in front on consumers. Hilton provides luxury services on affordable pricing to customers.
Availability of resources: It is also essential features of customer’s perception for products and services of Hilton. Therefore, operation manager makes sure that always availability of resources for providing services to customers(Wood, ed., 2015). If company has no availability of resources, so that they are unable to give services to consumers. This affects on company reputation and image in industry.
Standardisation: If operation manager of Hilton provides high standard services to customers, so that it effects their perception and fulfilment their needs as well as wants. Therefore, manager make sure that give standardized services to customers.
Nutrition and dietary requirement: Operation manager of Hilton make sure that providing healthy foods and beverages services for fulfilling nutrition and dietary requirement to customers. Therefore, manager make sure that utilizing good quality material in foods. This helps in increasing unique identity and reputation among customers.
2.3 Asses opportunities and constraints affecting products and services
There are various opportunities and constraints that are affecting on products and services with in hospitality industry. Such as:
Brand Image: Strong brand image is opportunity of Hilton that positively affects on product and services development in hospitality industry. If company has powerful brand image, so that customers are coming more time and purchasing their products and services.
Availability of resources: It includes financial, human resources and physical. Therefore, operation manager make sure that all resources are available for providing services to customers(Wood, 2017). Manager makes sure that all workers are providing better and effective services to consumers. This kind of factor affects on products and services. If Hilton has good financial resources, so that they are giving better goods and services to customers.
Status: Operation manager make sure that providing better and high standardized facilities to customers. This factor also affects on products and services of Hilton. If company has good status and condition, so that they give better quality services and products to customers.
2.4 Different merchandising opportunities for products and services
Merchandising: It is action of promoting for selling of products and services for possible customers. Effective marketing strategies is essential for building brand, attracting customers and maintaining loyalty. Marketing manager make efforts on developing brand awareness, organizing different campaign for increasing customers' loyalty (Pereira-Moliner and et.al., 2016 ).
Merchandising opportunities: There are many merchandising opportunities for products and services of Hilton. Such as:
Human capital development: Operation manager of Hilton make sure that better development of human capital that includes staff training, effective communication, motivation and problems solving. With the help of it, employees are effective performing in terms of providing accurate services to customers.
Tourism system: If Hilton is collaborating with travel and tourism company, it is increasing marketing of their products and services. Many customers are staying in their hotel, through these ageniences. This also an opportunity for their products and services as total sales are increased in this way (Van der Wagen, and Goonetilleke, 2015).
Digital merchandising: It is also an opportunity of company that online booking of products and services are now available to customers. Therefore, operation manager makes sure that utilizing digital merchandising in terms of online booking, connecting Wi-Fi in hotel rooms etc.
Customer satisfaction: Operation manager make sure that providing better services, so that customers are fully satisfied with their products and services. It is also merchandising possibilities for their goods as well as facilities.
3.1 Different methods of pricing
Pricing of product and services is important term that affecting sales, buying behaviour of customers, profits, revenues in business. There are different methods of pricing that utilizes by manager. Such as:
Cost oriented pricing: It is pricing method that define certain percentage of total cost of production is added cost of product to determine its selling price in Hilton. There are two types such as costs plus and markup pricing.
Market oriented pricing: In this method, there are different pricing includes such as going rate, differentiate etc. Going rate pricing refers to set of price according to prevailing price trends in market.
Services Charge: It is type of collection of fee to pay for services related to purchasing of primary product or services. There are many hotels and restaurants charge services fee that is percentage of total bill. Charging fee for ordering room services, large group dining at restaurant.
Cover Charge: It is total of money that customer pay in addition to their costs of food and beverage in restaurant (Pereira-Moliner and et.al., 2016).
Minimum Charge: It is type of collection of minimum pay for services from customers who are purchasing products and services of Hilton.
Competition based pricing: It refers to method that company considers prices of competitor's products to set prices of their goods. Price may be low, higher or equal as compared to competitors, it is organization decisions.
Therefore, Hilton is applied premium pricing as per going rate pricing method. This pricing include in market oriented pricing method. Because of, they maintain reputation with top class and high quality amenities, so that company adopts this method for its up scale services.
3.2 Factors affecting revenues' generation and profitability
There are various factors that are affecting on revenues' generation and profitability of Hilton. Such as:
Labour Intensity: If labour intensity level is high in Hilton, labour of hotel works effectively and providing services to customers. Therefore, it increases customers satisfaction that directly increase profitability and revenues generation of business.
Elasticity of demand: If price is decreased ultimately products demand is increased, so that this increasing profits and generating revenues of Hilton(Chen and Chen, 2014).
Price: If price of Hilton products and services is increased, so that customers are not purchased their services ultimately affects profitability and revenues of Hilton.
Standardisation: If Hilton do not provided high standardized services to customer, so that consumers will not come again in their hotel. This is decreased profits and generating revenues of business.
4.1 Performance measures and appraisal techniques
Measuring performance is essential part of any organization, so that employees work effectively in workplace. Appraisal techniques are used for improving and measuring of performance of employees of Hilton.
Customers services: Company rank each employees with another in form of pair by following paired comparison method. This assists in improving performance of employees by assessing customers feedback, improvement in satisfaction, resolves issues actively etc. This helps in measuring performance.
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External comparison: With the help of rating method, company measures and give appraisal for performance of employees of Hilton. In this method, manager is ranked to each of employee with another worker (Hertzman, Moreo and Wiener, 2015).
Quality management: Manager if Hilton measuring performance of employees on the basis of quality management. If the employees are better working in terms of providing better quality services to customers, so that manager gives appropriate appraisal of staff.
Sales performance: If sales performance of employees is weak, so that manager follow rating scale method for measuring performance of individual in the workplace. Different criteria includes in this method such as output, initiative, attitude, attendance etc.
4.2 Advantages and Limitation of quantitative and qualitative appraisal techniques
It is systematic analysis by using numbers for interpreting data that are important by accent numbers, measurement and statistical analysis.
- Easy to analyses performance.
- Data reliable that are collected.
- Well designed selection process.
- Lack of resources for data collection.
- Time consuming and expensive(Xu and Gursoy, 2015).
- Difficulty in data analysis.
Qualitative techniques :
It is research that focusing on involve an interpretive, naturalistic approaches to its subject matter.
- Predictive quality of gathering data.
- Based on human behaviour.
- Open-ended process.
- Difficult to assess and demonstrate.
- Time consuming technique.
- Difficult decisions require repetitive research periods.
4.3 Approaches to business analysis, evaluation and planning of operation
Business analysis: It comprises four P's that are product, place, price and promotion.
Product: In terms of services that are providing by Hilton for customers satisfaction and target audience. Therefore, Hilton is providing luxury services.
Price: Company make sure that take appropriate decisions regrading pricing, so that customers purchase many products and services. Therefore, Hilton adopts premium pricing strategies in business (Davis and et. al., 2018).
Promotion: Hilton selecting unique promotional activities for marketing of their product and services. This assists in standing out of crowd and customers attraction. The best that is followed in marketing strategies of Hilton is to keep track on result of any strategy for given strong feedback.
Place: Hilton is engaged in the deluxe experience of providing luxurious services across globe in 84 countries. The hotels global presences entails both as traveller delight and business destination(Xu and Gursoy, 2015). For that, hotel establishing in major holiday spots are near airports etc.
This report summarised that various factors affects average spending power such as size of income, status, social and cultural. It can be concluded that different elements that includes brand image, standardisation, availability of resources influences towards customers perspective Business analysis of Hilton in terms of marketing mix strategy. Furthermore, it can be completed that various stage of product and services development that includes idea generation, idea screening etc.