Try the all-new QuickBooks Online for FREE.  No credit card required.

ENTER 2003 final version22

Document Sample
ENTER 2003 final version22 Powered By Docstoc
					     Modeling and Comparing Internet Marketing:
A Study of Mainland China Based and Hong Kong Based
                   Hotel Websites
                                    Truman Huanga
                                      Rob Lawb
                    HRC WORLDWIDE, Guangzhou, P.R. China
           School of Hotel & Tourism Management, The Hong Kong
                     Polytechnic University Hong Kong

In spite of the relative ease of website design, many hotels do not know how to fully utilize
their websites as a marketing tool, and many hotel websites have been designed to serve as
“electronic brochures” instead of “innovative marketing tools”. In view of this deficiency,
successful factors for conducting web marketing will clearly help hotels improve their efforts
on Internet marketing. This research serves two purposes. First, it makes an attempt to develop
a framework for hotel Internet marketing. Second, the research performs a comparison study
for Hong Kong luxury hotels and Mainland China luxury hotels using the developed framework.
Hotels in Hong Kong are selected for direct comparison with their China counterparts because
the former are generally regarded as having an international standard. Lastly, this research
makes recommendations for hotels to make better use of their websites as an effective
marketing tool.

Keywords: Internet; hotel websites; Mainland China; Hong Kong.

1    Introduction

In order to remain competitive in the Internet era, hotels have to develop a web
marketing strategy and to find an optimal customer-oriented website solution. Having
a successful Internet marketing strategy can provide hotels competitive advantages
since websites are a very important component of Internet marketing. This research,
therefore, aims at offering a WWW marketing solution for the hotel industry,
particularly in China, by comparatively evaluating the performance of hotel websites
from a marketing perspective.

The specific objectives of this research are:

           •   to develop an evaluation framework for measuring hotel website
               performance from practitioners and customers’ perspectives;
           •   to compare and contrast the website performance of Mainland luxury
               hotels and Hong Kong (an international tourism and business center)
               luxury hotels using the developed framework; and
          •   to provide recommendations for Mainland hotels to improve the
              effectiveness of their websites.

2    Related Work

Kotler & Armstrong (1996) pointed out that the marketing mix is one of the major
concepts in modern marketing. Marketing mix is defined as the set of controllable
tactical marketing tools that the firm blends to produce the response it wants in the
target market. The marketing mix consists of everything the firm can do to influence
the demand for its product, which traditionally refers to 4Ps including product, price,
place, and promotion. Morrison (1996) revealed that there are a total of 8Ps in the
hospitality industry according to its unique characteristics, and that the other more 4Ps
are people, partnership, packaging, and programming.

Kotler & Armstrong (1996) commented that the Ps’ theory merely represents the
sellers’ view of the marketing tools available for influential buyers. From a
customers’ viewpoint, however, four Cs also need to be stressed which refer to
customer needs and wants, cost, convenience, and communication (Lauterborn,

Many hospitality companies created their own websites for various purposes, but
mostly used them as a sales and marketing tool (van Hoof et al., 1999). By using the
Internet as a marketing tool, tourism organizations have gained some distinct
advantages in cost reduction, revenue growth, marketing research and database
development, and customer retention (Morrison et al., 2001). Customer expectations
are crucial factors when starting to consider the feasibility of developing a website for
business (Bell & Tang, 1998).

This study investigates marketing mixes of 8Ps from suppliers’ perspective and 4Cs
from customers’ perspective in the context of hotel Internet marketing. Website
promotion is crucial to lead a hotel to the final success of WWW marketing, and for
this reason, website promotion is also included in this study as another dimension of

3    Methodology
In this research, 74 luxury hotel websites including 45 Mainland hotels and 29 Hong
Kong hotels were evaluated. The Mainland hotels selected for analysis were chosen
from the top 100 hotels in terms of revenues in 2000. This study only focused on
luxury hotels in the five-star and four-star categories. In total, 45 Mainland luxury
hotels including 31 five-star hotels and 14 four-star hotels were selected. Though
Hong Kong hotels are classified into three categories as High Tariff A, High Tariff B
and Medium Tariff hotels, which differ from the hotel star-rating system used in
Mainland, High Tariff A and High Tariff B hotels were considered as luxury hotels in
Hong Kong. At last, 29 Hong Kong hotels including 13 High Tariff A hotels and 16
High Tariff B were chosen in study.

As shown in Figure 1, the research process consisted of 3 phases. The website
evaluation was developed with opinion from industrial practitioners and users, as well
as the promotion of websites. Hence, a framework for hotel website performance was
developed. A content-based analysis was then carried out to examine the performance
of hotel websites on the basis of the proposed framework.

                             Phase one: Attributes Analysis

                                      Analysis of Attributes

                             Ranking of importance of attributes
                                      By Panel Discussion

                                   Website Evaluation Framework

                               Phase two: Content Analysis

           45 Mainland luxury hotels                    29 Hong Kong luxury Hotels

                                         Content Analysis

                            Phase three: Data Analysis & Findings

                              Weight & Calculate the Score

                              Comparison of hotels Website:
                               Mainland Vs. Hong Kong

                                    Results and Discussion

                                    Fig. 1. Research Process

Each component of 8Ps, 4Cs and website promotion was evaluated according to the
attributes as listed in Table 1.
        Table 1. Website Attributes from the Industry’s perspective

      Components                                    Attributes
   Hotel Introduction     Hotel history (background), hotel milestones, maps
       Guestroom          Room type, in-room facilities & service,
                          check-in/check out time
   Restaurants & Bar      Cuisine type, menu, hours, contact
                          Capacity, layout, area, style,
                          service & facilities provided, meeting planner, contact
      Entertainment       Introduction, type, hours, contact
     Transportation       Vehicle type, service provided, contact
    Business Service      Services provided, hours
    Shopping Service      Introduction, types, hours
     Aesthetic Effect     Photos in each facility, animation aspects
  On-line Distribution    Available product category, distribution for target market
                          Reservation policy, on-line search, on-line available check,
                          on-line reservation form, on-line reservation retrieval,
                          on-line cancellation, real-time processing, create/modify
                          profile and e-mal reservation
                          Credit card type, security payment system, payment
         Room             Room rate of different types, breakfast price
         F&B              Price for banquet, dishes or set menu
       Convention         Room rental rate, facilities rental rate
     Transportation       Vehicle rental fee
                          Discount for Internet bookers,
     Special Offers
                          special offers for niche market
      Advertising         What’s new, press release
                          360 panoramic photo, virtual hotel tour, audio/video on
                          homepage, picture zoom-in/out
                          Employee opportunity and benefits
        Email             Email with own domain suffix
Internal Information      Mission statement, company policy, staff information
        Packages          On-line package
        Marketing Research     On-line survey
                               Other booking channels, travel service, points with other
         Affiliate Program
             Linkage           Linkage to travel partners, linkage to other websites
                               Customer Needs and Wants
                               City introduction, local attractions, shopping guide, cuisine,
             City Tour
            Local news         Activities, exhibitions, arts
            Travel tips        Exchange rate, weather reports, world clock, transportation
                               timetable, custom polices, calendar
        Security & Privacy     Credit card security, privacy policy
                                     Cost to customer
            Room Rate          Comparison of Internet rate and walk-in rate
                               on-line enrollment, restricted frequent guest area, on-line
         Frequenter Plan
                               account review, create/modify customer profile, members
         (Members Club)
                               benefit, special offer for members
          Loading Speed        Homepage download time
            Language           Number of language choices, currencies, date formats
           Design Skill        Navigation, site map, fact sheets
                               FAQs, Feedback forms, chat rooms, on-line talking, e-mail
                               and automated response, e-mail updates on latest
                               development, on-line request, comments from satisfied
                               customers, update date, visitor number
                               Customer registration, personal web page, address web
      Customized Web Pages
                               visitors by name, welcome message, and guest book
        Contact Information    Telephone number, fax number, e-mail address
                                    Website Promotion
          Search Engines       Registration in main engines
              Links            Links with other sites
                               Bookmark, email newsletter, ‘email this to a friend’
           Useful skills
                               notices, announce site update, hit counter
           Management          Refresh website weekly

At the initial stage of framework development, a panel discussion was adopted to rank
the importance of each component in 8Ps, 4Cs, and website dimensions. The
discussion group consists of 4 respondents including senior hotel managers and
Internet users. Next, the average weighted scores were calculated for each component
based on a proportion of 100 percent using to the following approach:
D1 = 8Ps      D2 = 4Cs      D3 = Website Promotion
SDiRj = Important Score given by respondent i =1,2,3 R = Respondent j = 1, 2, 3, 4
WDi = Average weighted score of marketing mix; i = 1, 2, 3

          ∑ SDiRj
WDi =   j =1

                         3                   ∑ SDiRj
Total Score = ∑                                        (Total Score • 100)

Next, the average weighted score of each element of the marketing mix is calculated
based on the given score (WDi ) of the first step. The calculation results use the
following approach:

Pi = Elements of 8Ps, i = 1,2,3, …7
SpiRj = Importance Score for Elements of 8Ps given by respondent j=1,2,3,4
Ci = Elements of 4Cs, i = 1,2,3,4
SciRj = Importance Score for Elements of 4Cs given by respondent j=1,2,3,4
SPrRj = Importance Score for Web Promotion given by respondent j=1,2,3,4
WE = Average weighted score of each element
               7               ∑ SPiRj
WD1 =        ∑

               4             ∑ SciRj
WD2 =        ∑

                   ∑ SPrRj
WD3 =

Having calculated the average weighted score for each component, a five-point
judgmental scale was used to evaluate the attribute performance of each component in
the category as depicted in Table 2.
                   Table 2. A five-point judgmental performance scale

         1               2                  3                      4                  5
    Very bad/Not
                        Poor            Neutral               Good               Very Good

                                     Possess half of     Possess most of
                                         the listed        the attributes      Possess all the
                                       attributes or             or            attributes with
     No listed     Possess only a
                                     Possess most of      Possess all the           Good
     attributes      few listed
                                    the attributes but     attributes but       organization
     available       attributes
                                    bad organization           neutral         and Aesthetic
                                      and Aesthetic      organization and           Effect
                                           Effect        Aesthetic Effect

The performance mean score for each component was then calculated by combining
the average weighted score and the attribute’s score using a five-point judgmental
scale. To directly reflect the website performance, the mean score was transferred to a
performance percentage score. In other words, the performance percentage score was
obtained by dividing the average weighted score with the performance mean score
according to the following approach:
    PC = Performance score of component
    WEC = Average Weighted score of component
    As = Score of attributes by a 5-point judgmental scale
    PC = WEC * As

A 100-point judgmental scale was then used to rate the score’s performance. The
performance rating was divided into 5 categories ranged from very unsatisfactory to
very satisfactory (See Table 3).

                   Table 3. A 100-point judgmental performance scale

       Point            0-20              20-40           40-60        60-80              80-100
 Performance           Very                                                               Very
                                    Unsatisfactory       Average       Satisfactory
  Category         unsatisfactory                                                     Satisfactory

An independent-samples t-test was used to test the significant difference between
Mainland hotel websites and Hong Kong hotel websites.

4            Findings
Having evaluated the performance of websites using attributes from the developed
framework, significant differences were found between the Mainland hotel websites
and the Hong Kong hotel websites.

In terms of evaluation from the 8Ps, Hong Kong hotels received higher performance
scores than Mainland hotels. For Hong Kong hotels, Product, Place, Price, Promotion,
and Partnership all performed satisfactory; whereas Packaging & Programming, and
People had an average performance. For Mainland hotels, the Product and Price
dimensions performed satisfactory but Place, Promotion, People, and Partnership only
achieved average performance scores. Unfortunately, Packaging & Programming fell
in the unsatisfactory level. Table 4 shows the results for the 8Ps.

                 Table 4. Overall Perceived Performance Score of 8Ps

                                                                        Perceived Performance Score
                                                                        Mainland             Hong Kong


  Components                                                                                                  Sig.



    Product                     12                   70.27        8.12400         67.70             74.25    0.031*
     Place                       7                   54.13       3.14222          44.89             68.47    0.000*
     Price                       9                   64.80       5.52556          61.40             70.10    0.016*
   Promotion                     6                   57.49        2.90167         48.36             71.67    0.000*
    People                       5                   46.19        2.10889         42.18             52.41    0.018*
 Packaging and                                                                            2.0965
                                 4                   40.14        1.28889         32.22             52.41    0.000*
 Programming                                                                                 5
  Partnership                    5                   49.05       2.04444          40.89             61.72    0.002*
    *significant at•= 0.05

In the 4Cs dimension, Hong Kong hotels also received higher performance scores
than Mainland hotels. For Hong Kong hotels, Convenience was rated satisfactory and
others were rated average. For Mainland hotels, Convenience and Communication
were in the same categories as their Hong Kong counterparts. However, Customer
needs and wants as well as Cost to customers were rated unsatisfactory. Table 5
presents the 4Cs findings.
            Table 5. Overall Performance Score of 4Cs: Mainland vs. Hong Kong

                    Expectati    Overall             Perceived Performance Score
                       on       Performa
 Components         Weighted                    Mainland                 Hong Kong            Sig.
                     Score       Percent    Mean          Percent     Mean         Percent

      Needs            10          33.84   2.50889         25.09     4.74138        47.41    0.000*
      & Wants
      Cost to
                       7           39.11   2.28000         32.57     3.44828        49.26    0.003*
    Convenience        8           71.44   5.81333         72.67     5.56207        69.53    0.280
                       6           57.03   3.32444         55.41     3.57241        59.54    0.152
         *significant at •= 0.05

Lastly, as shown in Table 6, Hong Kong hotels received higher performance scores
than the Mainland hotels in the dimension of website promotion.

       Table 6. Performance Score of Website Promotion: Mainland vs. Hong Kong

                    Expectat                         Perceived Performance Score
    Component                   Performa        Mainland                 Hong Kong
                    Weighte                                                                   Sig.
       s                           nce
                       d                   Mean          Percent      Mean         Percent
                      6.5          77.84   4.82444        74.22      5.42414        83.45    0.104
    Management        5.75         61.08   2.70889        47.11      4.75862        82.76    0.000*
       Links          5.75         35.14   1.66111        28.89      2.57759        44.83    0.014*
    Useful Skills      3           22.61   0.64000        21.33      0.73793        24.60    0.163
* significant at•= 0.05

5       Conclusion

Empirical findings in this research showed that the website performance of Hong
Kong hotels scored higher than Mainland hotels, and statistically significant
differences exist between hotels in these two regions. The findings typically reflect
that the websites of Mainland hotels mainly remain as “electronic brochures”. Hong
Kong hotels, however, obtain higher scores in most attributes, which reflect that the
websites of Hong Kong hotels can serve as “marketing tools”.

The performance of 4Cs on the sites was not satisfactory in both Hong Kong hotels
and Mainland hotels. In reality, the Internet can boast its character of interactivity.
Without the participation of customers, the website is not really interactive. The
website is designed for customers, but not for the industry. Therefore, customer needs
and wants, cost to customer, convenience and communication should be focused
during the website development stage.

Although each hotel website has its own style in location, facilities, star-rating,
management, and target market, the marketing mix of 8Ps and 4Cs should be
applicable to most, if not all, hotels when conducting marketing activities.

In the future, a structure model of website marketing based on marketing mix can be
developed. The model consists of four functional media including Information
Medium, Purchase Medium, Reception Medium, and Traffic Medium. Information
Medium helps visitors to get enough understanding about the hotel such as product,
price, external environment (customer needs & wants), people and partnership. By
Purchase Medium, visitors could select products including hot product (Promotion,
Packaging & Programming) and then make an online purchase. If visitors have any
questions, they may come to Reception Medium and use various interactive tools to
get help. The Reception Medium also helps visitors join some frequent plans to enjoy
personalized service. Traffic Medium helps a hotel generate traffic on the website.
Specified attributes of each component on those four media should be taken into
consideration during website development.

An earlier and abridged version of this paper will appear in JICC2002 Proceedings.


Bell H. & Tang N. (1998). The Effectiveness of Commercial Internet Websites: a User’s
       Perspective. Internet Research: Electronic Networking Applications and Policy 8(3):
Van Hoof H., Ruys H. & Combrink T. (1999). Global Hoteliers and the Internet: Use and
       Perceptions. International Journal of Hospitality Information Technology 1(1).
Kotler P. & Armstrong G. (1996). Principles of Marketing, Prentice-Hall International, Inc.
Law R. & Leung R. (2000) A Study of Airlines’ Online Reservation Services on the Internet.
       Journal of Travel Research 39, Nov: 202-211.
Lauterborn R. (1990). New Marketing Litany: Four P’s Passé; C-Words Take Over, Advertising
       Age, Oct. 1: 26.
Morrison A. (1996). Hospitality and Travel Marketing, Delmar Publishers, 1996.
Morrison A., Jing S., O’Leary J. & Cai L. (2001). Predicting Usage of the Internet for Travel.

Shared By:
Description: ENTER 2003 final version22