Factors Affecting Average Spending Power Marketing Essay

reckons Affecting Aver hop on Spending Power Marketing auditionIntroductionKrajewski Ritzman (1987) Operation management is the systematic direction and control of the process that transforms inputs into finished goods and services. Operations management involves the responsibility to ensure that phone line operations be efficient in terms of resource use as little as a requisite and effective in terms of customer requirements. At this current age, hospitality has grown up much bigger than even it was expected in last couple of decades. It is one of the most leading business sectors in the business world but in many different forms where efficient service is being offered to the clients using as little resources as mathematical to gain the client satisfaction.Throughout this report we will be finding how the hospitality operations management performs in the practical business market placeplace and necessary theoretical evident discussion will be done to emphasis the aspects of the topic.Part AFactors affecting average outgo exponent (ASP)The average spending power is a compromise or could be c completelyed as a joint decision between equal partners in the pricing process such as between the hotel or eating place and the customers.In the context of hospitality, the customers are usually offered with a wide range of food and beverage items of different scathe labels which actually brings about average spending power. Generally the average spending power is very much depended on the customer or guests whims or impulse.The spending power could be affected by the fol low-pitcheding factors Size of incomeStatusSocio/cultural influencesEconomic situationKey Stages in harvest-home and Service ripeningThere are number of stages in ware and service suppuration process, the key stages are follows Market research,Market segmentation,Idea evaluation,Concept maturationProduct developmentAdvertising objectivesCreateDesireCreate sentienceSellIncrease marke t shareDevelop brand loyaltyCustomer awareness(http//churchill.ac/moodle/file.php/52/Stages_of_Product_Development.ppt)The features, contribute towards customers perception of product and serviceThe features, contribute towards customers perception of product and serviceare follows Marketing ResearchThe market research is a systematic way to meet, to store and to analyze of data in markets, competition, future tendencies and other factors affect the business operational process. It is done more often than not to be to more(prenominal) clients oriented and in other way to advance the efficiency and the effectiveness of the whole operational process.Market segmentationMarket Segmentation could be delineate as the identification of a subset of consumers, so that a combination of the market thinks up to satisfy specifically its demand.Advertising and MerchandisingAdvertising are generally a paid way of non-personal form of presentation and promoting the idea or ideas, goods or serv ices by a particular company or conferrer intended to reach their desired set of customers. It is the leading marketing weapon in the market place. This process requires objectives like other marketing elements.Advertising ObjectivesThe denote objective varies for individual organisation depending on the clock of advertising. Using this process advertiser expect short or long time benefits. Competition, consumer behaviour, revenue and cabbage will all influence the advertising objectives from time to time.Opportunities and Constraints Affecting Product and Service DevelopmentThe following issues are affecting the product and service development Availability of resources human, financial, and physical resourcesstandardisation,style of service,space utilisationA range of Merchandising opportunities for hospitality Products and ServiceThe opportunities are Persuade customers to patronise the hotel or restaurant often.Create desire for product/service in the winds of potential custo mersEmphasise benefits and advantages of the products/ services (http//churchill.ac/moodle/ forward-looking/resource/view.php?id=665)Create an awareness of the productIncrease the market shareImprove revenueInfluence the attitude of the public towards the productImprove brand loyaltyConfirm in the minds of customers that they have made the adjust choiceEnhance the desired image of the hotel or restaurant(http//churchill.ac/moodle/mod/resource/view.php?id=665)Methods of Pricing and summarizeitional Pricing considerationsMethods of PricingCost-orientedCost-oriented pricing involves the determination of all fixed and inconsistent costs associated with a product or service. later the heart and soul costs attributable to the product or service have been determined, managers add a desired profit margin to each unit.Cost-oriented pricing method could be summarized as Cost + Fixed profit percentage = Selling priceMarket-orientedMarket-oriented pricing determines Pricing at the same le vel as the competition. The organization has to assess how its product relates to a competitive product and set its price at a comparable level to stay competitive in the market place.Additional Pricing considerationsService Charge,Cover Charge,Minimum ChargeA system.(http//churchill.ac/moodle/mod/resource/view.php?id=744)Factors in Hospitality Operations affect Revenue Generation and ProfitabilityThe following factors affect Revenue Generation and Profitability in Hospitality Operations Factors affecting revenue generationSales mixIt is a way of mixing the relative set of products together and setting up a comparatively lower price than the sum of individual products together as promotion to raise the organizational total sale, but it is actually less than the total center it could be if it was sold as individual, therefore it affect the revenue generation at the end.Customer turnoverRevenue generation depend on customer turnover, if the customer are not attracted by the product o r satisfied with the service, they would not come back to organization again and therefore sales will be very badly affected and revenue generation at the same time.Average spending power (ASP)Average spending power is completely depend on the customers will customers are free to decide whether to spend extra or not. If the average spending power of the customer or guests lower down, the sales will go down as well therefore the revenue will be affected as where there is no sales there is no revenue.Factors affecting gainfulnessLabour intensityTo produce goods or to delivered service large amounts of human effort is required in particular the industry like hospitality where they are very much people oriented. The larger the human effort against the product or service the larger the amount would be paid and would lower the profitability.Shelf-lifeSelf-life determines the length of time a product may be stored or preserved without deterioration the length of time it dust usable. I f the product or service is not suitable to use it will be left as waste and therefore it will affect the profitability very badly.Elasticity of demandIf the availability against demand is not met properly the profitability will go down as sales will go down.The aspects of hospitality operations which are commonly appraisedStructuring the discussionBuilding trust and rapportObjectivityBalancing praise and criticismSetting objectivesGetting buy-in make them motivationalCareer plansFollow up and action(http//churchill.ac/moodle/file.php/52/Appraisal_and_improved_performance.ppt)Two of the aspects of hospitality operations which are commonly appraisedStructuring the discussionThe organizations take decisions time to time to carry on developing their products or to improve the service they usually offer. This sort of decision should be taken based on their management and development strategy set by the organisation earlier. The set of decisions has to be structured or arranged in a sort ed manner so that they fucking be used in the future to keep their standards of the product or services.Setting objectivesIn order to produce or offer a smell service the organisation must set the objectives targeting the goal which they are intended to achieve. The objectives could couple in numbers depending on the organisation and the label of their product and services. After setting up the objectives the organisation will follow the production or operation strategy to achieve the objectives for that particular stage.Reasons for AppraisingTo identify areas for improvement on operations.Identify areas where products and services are thriving as well as areas of failure.To improve on performancesTo identify constraints and capitalise on opportunities (http//churchill.ac/moodle/file.php/52/Appraisal_and_improved_performance.ppt)Definition and comment of PricingMethod adopted by a firm to set itsselling price. It usually depends on thefirmsaverage costs, and on thecustomerspercei ved value of the product incomparisonto his or her perceivedvalueof the competingproducts. Different pricingmethodsplace varying degreeof emphasis onselection, estimation, andevaluationof costs,comparative analysis, andmarketsituation. See in like mannerpricing strategy. (http//www.businessdictionary.com/definition/pricing.html)In other word, Pricing is a fundamental aspect of financial modelling, and is one of the four Ps of the marketing mix. The other three aspects are product, promotion, and place. Price is the only revenue generating element amongst the four Ps. Pricing is the manual or automatic process of applying prices to purchase and sales orders. (http//churchill.ac/moodle/file.php/52/price_and_profitability.ppt)To develop the price for a new product the following strategy would be followed Developing marketing strategy perform marketing analysis, segmentation, targeting and positioning. draw and quarter marketing mix decision pay back the product, distribution, and p romotional tactics.Estimate the demand curve understand how quantity demanded varies with price.Calculate Cost include fixed and variable costs associated with the products.Understand environmental factors evaluate likely competition actions, understanding legal constraints etc.Set Pricing Objective for example, profit maximization, revenue maximization, or price stabilization.Determine Pricing Using information collected in the above steps, select a pricing method, develop the pricing structure and define discounts (http//churchill.ac/moodle/file.php/52/price_and_profitability.ppt)Part BIn this part of the report, I will be discussing the relevant practical issues required by the project and presenting some significant information found throughout my individual research on TESCO PLC, Hancock Road, Broomly -By Bow, London E3 3DA.BackgroundTescoplcis a British international grocery and general marketing retail chain founded byJack Cohenin 1919. The brand first appeared after Cohen bought a shipment ofteafromT.E. Stockwelland he used those initials and added the first two letters of his own surname. The first Tesco store was opened in 1929 inBurnt Oak,Edgware, Middlesex. During the 1950s and the 1960s Tesco grew organically, and also through acquisitions, until it owned more than 800 stores. in the beginning specialising in food and drink, it hasdiversifiedinto areas such as clothing, electronics,financial services,telecoms, home, health, car and dentalinsurance, retailing and rentingDVDs, CDs,music downloads,Internetservices andsoftware. It is the largest Britishretailerby both global sales and domestic market share, with profits exceeding 3 billion, and the third largest global retailer based on revenue, afterWal-MartandCarrefourand second largest in profit behind Wal-Mart. (http//www.thefree4all.com)Figure and information extracted from (http//en.wikipedia.org/wiki/Tesco)Figure The Current information about TESCO PLCNature of the ProductTesco Brooml y-By-Bow offers Food, Beverage, and quality services. They also offers non-food items including holiday accessories, travel insurance etc. The food range comprised with frozen, chilled, regular item. Fresh produce (Fruit, Vegetable) items are even offered there.Range of ProductClothes, World Foods, Asian, Halal, Afro Caribbean, Greek, closeDifferent Influences affecting Patterns of DemandThere are number of influences affecting the patterns of demandExternal FactorSeveral National customers Several different aspectReligious aspects on foods Halal FoodCompetitive price offered by the competitorRange of productCurrent financial crisis etc.Internal FactorProduct PackagingCompetitive Price offered by TescoMulti buy product mix offeredProduct designValue product to attract the customer with low spending budgetTescos backlog PolicyCustomer expectations and requirementsThe profile of the client could be defined as description of client that includes demographic, geographical, and chara cteristics of psychographic, buying guideline, the reliability, and the history of purchase.A complete survey been done to the TESCO Broom-By-Bow branch among the customer and the details are bellow Research MethodPrimary research (Field research, fresh data)Questionnaire survey (Close ended) take in (Selecting set of customer from a larger number of customers)Location Broomly-By-BowSecondary research (Existing data)InternetAfter surveying 100 customer of different age group the following result is been found Figure Top chart describes the likings on different age group Bottom Chart shows the overall product expectation to the TESCO Broomly-By-Bow.