University name |
Table of Contents
Introduction......................................................................................................................................2
Background......................................................................................................................................2
Research objectives.........................................................................................................................3
Significance of the study.................................................................................................................3
Research question............................................................................................................................4
Theoretical diagram.........................................................................................................................5
Literature review..............................................................................................................................6
Methodology..................................................................................................................................12
Research design..........................................................................................................................12
Research methods.......................................................................................................................12
Hypothesis..................................................................................................................................13
Research instrument...................................................................................................................13
Population and sampling............................................................................................................14
Ethical consideration..................................................................................................................15
Data analysis...............................................................................................................................15
Expected outcome......................................................................................................................16
Timeline.........................................................................................................................................16
Limitation......................................................................................................................................17
Conclusion.....................................................................................................................................17
Bibliography..................................................................................................................................19
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Introduction
With rising competition in the market, organizations need to differentiate themselves in the
market to gain customer attention and enhance overall selling. This research paper has been
written with the objective of evaluating customer psychology of evaluating their choices for
luxury hotels and impact of branding behind the same. Customer psychology is greatly
influenced through branding techniques used by companies as it create brand perception in
customer mind about a brand. Customer behavior is a complex concept and so is branding which
has several components to it; it is crucial to evaluate relationship between the two.
This is a research proposal which include a blue print for final dissertation to be executed; it
include brief analyses on each component of dissertation and the way it will be used. It include
information that will be included in different chapters of the dissertation that are introduction,
literature review, methodology, research interpretation, analysis, findings and recommendations
and finally conclusion. Proposal will facilitate in evaluating the extent to which topic is valuable
and viable for large scale research and if any changes required.
Background
Branding plays crucial role in global hospitality industry with high rate of brand penetration
between branded and non-branded hotel properties in UK. Hotel industry in UK is highly varied
and it also include small organizations. Hotel industry in UK is the fifth largest employer as it
provides employment to 2.4 million individuals. Hotel industry in UK has greatly influenced
through poor economic condition. In such tough time period every hotel is trying to create its
unique position to attract customer attention and loyalty towards the brand.
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Research objectives
This research paper has been written with the objective of understanding branding concept,
impact of branding on customer choice, major objectives that researcher aims to fulfil through
this research paper are as follow;
Evaluating concept of branding
Analyzing customer choice of brands out of several brands
Analyzing relationship between branding and customer choice of brand
Evaluating different strategies used by companies for branding themselves
Different elements that impact customer perception and choice of luxury hotels
Significance of the study
Hotel industry in UK is facing trouble due to poor economic scenario, it is also facing high
polarization in performance. There is movement in tariff as rates associated with each room
dropped down to suit the market situation in 2009, however at the same time it has also reached a
record high of 25% in 2010 (PWC, 2012). Hotel industry in UK is witnessing a divergence in
overall performance; in market budgeted hotels blooming and the top hotels suffering from
minor losses. Therefore companies needs to differentiate their market position by creating strong
brand image in customers eye so that they prefer one brand over the other. This study will help
in evaluating factors which customer consider while selecting a luxury hotel and how companies
can use these elements in their favor.
Research question
It is important that researcher decide on research questions with due considerations as it impact
overall findings of the paper, based on these questions data collection methodology will be
executed and framed. Major research questions that will be answered in this paper are as follow;
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What is present luxury hotel scenario in global market?
What is branding and elements of branding?
Do branding impact customer perception regarding a brand?
Di barong impact customer choice about a brand?
What are different factors that impact customer choice of brand and their loyalty?
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Theoretical diagram
The concept diagram demonstrates the structure of the research in a form of flowchart.
Research Objectives
Conceptual framework
To determine the impact of
different elements on deciding
preferred brands of luxury hotels
by UK customers
The impact branding on
customer choice for luxury
hotels in UK
Research Questions
What is present luxury hotel scenario
in global market?
What is branding and elements of
branding?
Do branding impact customer
perception regarding a brand?
Di barong impact customer choice
about a brand?
What are different factors that impact
customer choice of brand and their
Literature Review
Research Methods
Secondary research
Primary research through
questionnaire
Research Results
Theory
Comparison
Triangulation
Methodological
triangulation
Branding and
customer behaviour
theories
Answering research
questions
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Literature review
Several researchers have worked on evaluating the impact of branding and its factors on
customer choice and the way its helps them in making correct choice. According to Kayaman &
Arasli, (2007) several perceived benefits from branding include reduction in search cost by
customers as they judge a hotel on basis of its brand image, it also facility in reduction of
perceived cost. On contrary to this, owner gets benefited by charging premium in the market and
also building its superior image than others in the market. According to Philip Kotler a brand is
defined as a name, symbol, mark, logo, design, symbol or a combination of these elements which
is basically used for identifying the goods and services produced and marketed by a seller and is
used as a tool to differentiate it from the goods and services produced and distributed by its
competitors (Philip Kotler, 2005). It defines quality and ensure authenticity of the offering made
by the company, it facilitate in building customer trust and relationship with the company; it is a
vital tool that can be used to influence customer choice of product or service positively. Though
various tangible factors have been mentioned under brand equity concept but in hotel industry
service elements plays significant role. Branding has unique role in service industry due to
invisibility of certain elements, it can facilitate in building customer trust and reduction in safety
risk. Hotel industry is facing huge trouble in finding strategies through which they can turn the
intangible hotel experience into tangible parameters which customer can take away with them.
Another study has been conducted by researchers to evaluate the impact of branding on
customers choice to evaluate whether it really makes any difference or not. According to
researcher, three main goals are kept behind branding, which include gaining attention,
recognition and retention of customers (Barlow & Stewart, 2006). First element is gaining
customer attention towards the offering, branding facilitate in receiving customer attention as
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what is not seen that cant be sold; while evaluating products or services customer consider only
those brands which has gain their attention. Another important factor for consideration is
recognition, it should focus on building such an experience or memory that customer can
recognize it in the crowd or ask for it. This element can be built by companies by providing
excellent services, responding customer query, information processing optimally; further it
should also be evaluated on regular basis using strategies such as speeded response, visual search
process; this would also facilitate in understanding the level brand recognition among customers.
Branding facilitate in impacting customer choice through several ways, it act as a motivational
and influential factor on customer choice. Branding plays significant role in service industry than
product industry as it is strongest visible element to rely upon (Aaker, 1996).
Authors have presented a range of different elements that impact customer choice of product, it
include a unique and memorable name, and according to authors a successful branding strategy
requires a unique name, slogan and easily recognizable logo so that customer can easily
remember the name (Aaker & Joachimsthaler, 2000). Customers tries to relate to an organization
or service provider through tag line, logo and other branding elements, if these elements are
missing, then customer might fail to get associated or recognize the brand effectively. Another
author claimed color as significant factor to impact customer perception regarding brand.
Another approaches that help in developing strong branding strategy include focus of the
audience, message that the brand aims to deliver to its customer and factors that creates the
brand. Further, strong relationship has been seen between three concepts that are brand
Popularity, Country Image and Market Share. However different element of branding have
different impact on customer choice (jahangir, parvez, bhattacharjee, & ahamed, 2009). Below is
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the diagram that can be used by the researcher to evaluate the way branding influence customer
choice for the brand:
Above diagram shows strong influence of brand perception biasness on customer choice and the
way it creates overall buying behavior. Oliver claimed that a deeply held commitment to
repurchase a preferred product or service consistently in the future, cause repeating the same
brand or same brand-set purchase, despite of situational influences and marketing efforts. Author
has provided specific and special reference on the impact as per the situation which effectively
generates the last phase and the very action which is characterized by differentiated commitment,
consistency as well as preference in knowing the very dynamic aspects of the environment of
marketing (McMullan & Gilmore, 2008); therefore branding can facilitate in gaining high brand
loyalty, therefore increase in business. Another concept which holds importance in this
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discussion is a hotels brand equity. As per Aaker, brand equity refers to a set of assets and
liabilities attached to a brand, its symbol as well as name and refers to the value added or
subtracted by the product or services provided to another firm or the firms customers (DA
Aeker, 1991).
Brand equity as a concept provides greater value to the customers by enhancing the customers
ability to interpret and process information regarding the services provided by a hotel and
thereby increasing their confidence in their purchasing decision and thereby increasing the levels
of customer satisfaction (Keller & Lehmann, 2006). Though brand equity is concerned with
customers perceptions rather than being objective indicators, it has the ability to influence
customers choice of hotel and thereby affect the financial performance of a hotel chain. The
value of the brand is basically based on three factors being brand awareness, the perception of
the quality of services provided and the overall level of satisfaction experienced by the
customers. The customers who are satisfied with the services tend to buy more in future, become
less price conscious and are willing to pay more for the services and also generate positive word
of mouth about the hotel which definitely adds to the bottom line profits of the company (E.
Anderson, 2000). In todays highly competitive and crowded market place, the strategic
management of the level of customer satisfaction has become a factor of utmost importance,
where the customers have number of hotel and lodging options to choose from. In the past few
years, it has been seen that the overall percentage of franchised properties have shown a
considerable growth over the years.
With a shift of focus in their growth strategies on franchised properties rather than on actual
property management, the hotels may experience a lower level of customer satisfaction which
may result in affecting their revenue success. The reason behind this could be that as new
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franchise contracts are executed, the average age of older franchised properties tends to increase
(J.L.Harris, 2003).Therefore, when there is functional obsolescence of older hotels, further
capital investments shall fail to generate sufficient return for their owners, thus financially
demotivating them to make further investments in order to improve existing property irrespective
of the high branding standards. Though size of a brand does play an important role in the
branding strategy with larger brands characterized by high occupancy levels, largely franchised
properties tend to exhibit low occupancy levels and therefore there is a need for franchisors to
determine a tradeoff between meeting the service need of customers versus the short term goal of
generation of franchising fees. Focus, therefore needs to be more on providing premium quality
guest service which has a more long term positive effect on the overall health of a hotel brand.
Though, higher levels of guest satisfaction do come at the cost of higher operating charges for
the owners, empirical evidence does suggest that higher levels of customer satisfaction do result
in economic rewards for the hotel in the long run.
Another aspect that can be focused upon is whether marketing strategy of the luxury hotels has
an impact on customer preference and whether it should be a customer oriented strategy or a
competitor oriented strategy. Empirical studies conducted show when a lodging company is
operating in a market where customers are very demanding in nature, in that case it would be
more useful for the company to follow a market oriented or customer oriented strategy with their
focus being solely on continuous satisfaction of the needs of its consumers and complete focus
on acquisition, management and satisfaction as well as retention of customers. On the other
hand, in a market where the firm faces fierce competition, with a more docile customer base, the
focus of their marketing strategy should be competitor oriented with the strategic focus on
constant monitoring, managing and out ranking or out flaking competitors. Moreover, another
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conclusion drawn from the research studies is that where a customer oriented strategy provides a
higher pay off than a competitor oriented strategy, going for the latter would result in loss of
revenue and will diminish the performance of the company. Similarly, in a market where the
payoff is higher with the implementation of a competitor oriented strategy, implementing a
customer oriented strategy will have a negative impact on financial performance and will reduce
the overall performance of the firm (Chekitan Dev, 2009).
Thus, discussions above indicate that the power and size of a hotels brand and brand equity does
influence the perception and decision making process of the customer while making his/her
choice among various luxury hotels. The operating ratios such as occupancy rate and the return
on investment are driven by the hotels brand image which in turn is positively correlated to the
market value of a hotels property. The returns of various brands differ with some hotel brands
posting higher net operating income in comparison to others while others posting higher average
daily rates in comparison to its peers. Though the average daily rate is considered as a better
indicator of the performance of a hotel considering its top line revenue while the net operating
income considers on its bottom line revenue/ profits, hoteliers strive to drive both the indicators
in order to ensure sufficient financial performance. Further examinations have revealed that
brand affiliations do affect and influence a hotels revenue. The literary review conducted
indicates that consumers do give importance to brand image and it is considered as an important
cue for expected quality of services for the brand affiliated hotel chain. Thus, consumers while
evaluating their options among various luxury hotels are also willing to pay a premium price for
services of a hotel which in their perception is of high quality. Research studies conducted
revealed that brand affiliation, franchising, branding and mane recognition combined with
premium and high quality of services ensuring customer satisfaction can lead to a contribution of
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20 to 25 percent to the going concern value of a currently operating hotel. Moreover, a wellmanaged brand through strategic implementation of marketing and branding strategy can give a
long term competitive edge to maintain customer base and market share and keep competitors at
bay (J. W. O'Neill & Q. Xiao, 2006).
Methodology
This chapter of the dissertation will help in understanding the methodology that will be used by
the researcher for collecting data. It will provide blue print on research methodology and data
collection process for the research.
Research design
Flexible research design will be used for this research paper as it helps in using different research
tools simultaneously. Epistemology design of research will be used in this paper as researcher
needs to link it with ontology concept. Deductive approach will be applied in this paper, it is a
top down method, under this strategy first hypothesis is formed and then through research set
hypothesis is being confirmed by the researcher (Babbie & Rubin, 2010).
Research methods
Both qualitative and quantitative method of research will be used in this paper, quantitative
analysis help in collecting facts and figures for the research which can be used to proof findings
presented in the paper; this method does not require any generalization therefore no perception or
biases can take place by the researcher (Bynner & Stribley, 2010). This methodology involve less
time and cost as huge data can be collected in less time by distributing instrument among
research participants. However, in qualitative data analysis data are collected directly by
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integrating each participants, here generalization is done by research by compiling information
collected from various respondents.
Hypothesis
Null Hypothesis (H0): Branding strategies does not help in attracting favourable responses and
business in case of luxury hotels
Alternative Hypothesis (Ha): Branding strategies helps in attracting favourable responses and
business in case of luxury hotels
Research instrument
The data collection instrument known as the research instrument shall be effective only if it is
properly inclined with the objectives behind the research. For the purpose of our research we use
the questionnaire format with the scorecard approach for the purpose of conducting our
quantitative analysis. Each questionnaire shall consist of a set of questions with answers to each
of the questions assigned appropriate scores and the total tabulated score shall be used for
conducting statistical analysis and drawing appropriate conclusions (Kothari, 2009). The total
tabulated scores and statistical results shall form the basis for participant selection and also
provide guidance for preparation of case studies for the purpose of the qualitative analysis for
further in depth study and complete understanding of the topic under scrutiny (Creswell, 2003).
The two important attributes about a research instrument for quantitative analysis is reliability
and validity as these attributes minimize the errors in data collection and analysis arising due to
problems of measurement during the course of conduct of the research study. Here, reliability
refers to the accuracy or precision of the measurement instrument or procedure on the other hand
validity of a research instrument refers to the extent to which the measurement instrument chosen
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is in line with the objectives and purpose of the research topic and how accurately and efficiently
does it measure and access the specific concept. There are three types of validity analysis which
involves content, construction, and criterion related validity analysis of the survey instrument
chosen (Kumar, 2011). The content validity shall determine to the extent to which the questions
included in the questionnaire are reflective and cover the major areas or factors of the topic under
analysis. For the given case, the questionnaire should be able to cover all areas and factors that
determine that whether a brand image of a hotel can influence the choice or preference of the
customers among various luxurious hotels. The criterion validity or predicative validity involves
comparing a given instrument or procedure with another already established instrument or
procedure to determine the chosen instruments prediction ability. Lastly, construct validity refers
to the linkage or establishing an agreement between a theoretical concept under review and the
chosen analytical research instrument or procedure.
Population and sampling
The aim of the research being conducted is to provide an in depth understanding of the research
topic through analysis of a population with various classification and diversity. The population
should include customers from different age groups, occupations, income groups as well as
varied preferences in order to provide a more detailed and accurate statistical analysis. A sample
of 100 shall be drawn from the population which should represent all the various categories of
age, occupation, income groups and preferences. Though the analysis could be conducted on the
entire population but it is neither time effective nor cost effective. Therefore, drawing a sample
shall be of critical importance by the researcher ensuring that the sample drawn represents all
categories and is an efficient representation of the population. A wrong sample selection can
render the entire dissertation process to be ineffective. The method of sample selection shall be
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random sampling method where each of the components of the population shall have equal
probability of getting selected and included in the sample. The dissertation is proposed to be
conducted on 100 randomly selected participants with the proportion of the population remaining
equal across all the sections.
Ethical consideration
With rising ethical scandals and misuse of data, rising consideration is being given to research
ethics in the market, according to this researcher needs to give proper consideration to ensure
that high moral and ethical standards are maintained while data collection. This can be censured
by preparing consent form by the researcher and get it signed by the respondents, apart from this
other ethical parameters which research must ensure are as follow;
Free consent of all participants in the research as no one must be forced to
participate in the research, they should participate with free will
All researcher must inform participants about purpose of the research, the way
collected information will be presented and used
Anonymity of researcher should be ensured
Confidentiality of data (if required) must be maintained
Data analysis
Data will be collected through primary and secondary research; secondary data will be presented
in literature review section. However in primary data, information collected through
questionnaire will be evaluated using excel sheet; all data will be included in excel sheet and
then evaluated using statistical techniques such as mean, median, mode and graphs will be
prepared. Apart from this qualitative data will be used using generalization technique by the
researcher by compiling all collected data. All analyzed data will be presented in graphs and
elaboration format in analysis section of the dissertation.
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Expected outcome
Though presently no data have been collected so it is difficult to provide information on exact
findings of the paper, however expected outcome from this research is information on hotel
industry scenario in UK, impact of branding on customer choice, how branding helps in selecting
luxury hotels in UK by customers.
Timeline
As researcher needs to present final paper within limited time period so they are responsible for
optimum utilization of this period; timeline helps in implementing disciplined approach of time
management for doing task, timeline for this paper has been given below;
Expected outcome
Expected time (in
Stages of research
weeks)
Preparing research framework
Research proposal will be
prepared
Review of relevant literature
2 weeks
Understand secondary data
analysis
3 weeks
Data Collection & Preparation
Primary research
4 weeks
Preparing final Report
Preparing final report for
presentation
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2 week
Limitation
Every research study has certain limitation which impact final findings and extent of research;
these limitations are due to assumptions made by the researcher during research initiation; major
limitation that might impact extent of finding in this paper are as follow;
Financial constraint impact the extent to which sample size will be selected and reviewed
and final findings will be presented.
Time limit is another limit as researcher needs to complete paper within limited time
frame
Research biasness can also occur due to respondents pattern, sample size and sample
selection strategy
Conclusion
Above analysis helped in understanding overall plan for final research; it provide information on
the way research will be conducted. It shows strong interrelationship between brand equity
factors and customer choice in luxury hotels in UK. Customer based brand equity information
will help managers in great way in planning their marketing and branding strategies to gain
utmost customer attention. Different strategies can be build using these information for gaining
higher brand awareness, loyalty and responsiveness.
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