CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The Nigerian Hospitality industry started during the colonial area, with the establishment of rest houses by the colonial administrators at various district areas in Nigeria. Government records shows that by 1923 and 1931, European rest houses at Port Harcourt and Lagos were established respectively (FGN, 1989:67). The earliest catering establishments in the hospitality industry were in initially built and run by government and located at very important seaports, railways terminus or important towns where there seats of government.

The next most important development phase of the hospitality industry brought to being to different institutions, such as guest houses, hotels, staff canteens and staff clubs. Obia (2003:2) states that “there are three most outstanding groups of hotel chains in Nigeria namely: Nigeria

Hotels Plc, Artewa Hotels and Western Hotels with its Lagos Airport Hotel (commissioned in 1942)”. These hotel chains performed uniform functions of development and management of property, sale of management franchise to already established hotels and consultancy services.

Big international hotel chains such as Sheraton, Hilton, Hyatt and Le-meridian have opened in Nigeria.

Upon independence, various regional governments started the development of hospitality outfits such as federal palace Hotel, Lagos; independence Hotel now presidential, Enugu and Premier Hotel, Ibadan. Currently, the private sector owns most of the operating hospitality outfits in Nigeria, government having privatized their holdings in the 90s.

The Nigerian hospitality industry has witnessed in the last three decades a cycle of growth and decline. The unstable condition in the hospitality industry has made it a nightmare for investors, customers and regulators alike. This unstable condition is attributed to lack of marketing planning process in the hospitality industry. Most hospitality centers are set up on ego basis or guess work, without adequate planning on how their service/products will be marketed.

Lack of marketing planning process has affected and will continue to affect the realization of the full potentials of the Nigeria hospitality industry. Marketing is the only item on the profit and loss account that yield revenue, every other item is cost. The neglect of the important managements function by the Nigerian hospitality industry is a major threat to the long-term profitability and sustainability of the industry.

Planning in its simplest form according to Davidson (1987:109) involves answering the following questions:

1. Where are we now?

2. Where do we hope to in the future?

3. How do we get there?

Planning is an important function performed by all managers in organizations, irrespective of specialization and their levels in the organization. Planning could be formal, in which case, it is done regularly and the responsibility is assigned and usually reported in writing.

Marketing planning could be defined as the conscious assessment and projection of an organization’s marketing abilities to achieve the organization’s goals. It involves the application of planning process in the assessment of problems, opportunities and organizational capabilities, the specialization of goals to be achieved and the actions to be undertaken to achieve these goals. Agbonifoh (1988:295) defined marketing planning a “ a systematic managerial process involving the identification an assessment of marketing problems, opportunities and organization capabilities, the selection of target markets mix or mixes designed to achieve the marketing objectives and plans, identification and assessment of marketing opportunities, the formulation of marketing strategy and marketing programme and a pre-implementation review of the resulting plan”. Marketing plan contains a brief review of past marketing performance, assumptions about the environment, environmental opportunities, marketing objectives, programmes in the area of products, price, promotion and distribution, a target market profiles and a control mechanism.

The marketing planning process consists of series of steps outlining the activities, which are performed in the course of formulating a marketing plan. Leppard and Mc Donald (1991:6) stress that corporate culture in an organization is a vital aspect of successful marketing planning. They state further that “while the marketing planning process appears on the surface to be just a series of procedural steps, it does in fact, embrace a series of underlying values and assumptions”. The marketing planning process, depending on the corporate culture should be an integral part of corporate decisions and communication.

1.2 STATEMENT OF PROBLEMS

Most organizations in the Nigerian hospitality industry lack marketing plans. Where it exists, it is not implemented with adequate management attention it deserves. As a result, the following specific problems are prevalent:

i) Non-existence of marketing departments in most hospitality firms to plan, coordinate, implement and manage marketing activities.

ii) Non-existence of marketing objectives to serve as a guide post for implementation and achievement of corporate goals.

iii) Non-existence of budgets for marketing activities, where it exists, the allocation is often too small to make any significant impact.

iv) Non-existence of marketing information system that will assist in providing relevant information for decision-making.

v) Non-existence of formal plan for the development and training of personnel to perform marketing functions.

The above problems are as a result of failure to recognize the importance of marke6ting planning process in the Nigerian hospitality industry. This has inhibited performance, productivity and profitability in the industry.

1.3 OBJECTIVES OF THE STUDY

The objectives of the study are:

i) To access the impact of adequate marketing planning process on the profitability of the industry.

ii) To examine the level of understanding of the marketing planning process by employees of the Nigeria hospitality industry.

iii) To make recommendations on how the Nigerian hospitality industry could introduce and adopt marketing planning process in their operations.

1.4 RELEVANT RESEARCH QUESTIONS

Following form the statement of problems and the objectives of this study, the relevant research questions on the evaluation of the marketing planning process in he Nigerian hospitality industry are:

i) What is the level of appreciation of marketing planning process by employees of Nigerian hospitality industry?

ii) Does the hospitality industry have the necessary structure to carry out marketing planning process in these organization?

iii) Does inadequate marketing planning process affect the profitability of the Nigerian hospitality industry?

iv) Does the non-existence of formal plan for the development and training of personnel to perform marketing function affect the achievement of marketing and corporate goals?

v) What is the effect of the non-existence of marketing information system on the quality of decision making in the Nigerian hospitality industry?

vi) Does the non-existence or adequate budget allocation for marketing activities affect the achievement of corporate goals?

1.5 SIGNIFICANCE OF STUDY

The study would provide empirical evidence on the application of the marketing planning process in the Nigerian hospitality industry, it’s impact on profit and make recommendations on how to improve its application in the Nigerian hospitality industry. Marketing is the only item in the profit and loss account that generates sale/revenue, others are cost. It is therefore, important that organizations plan the marketing process in order to enhance revenue.

1.6 SCOPE OF THE STUDY

The study of the marketing planning process in the Nigerian hospitality industry is therefore restricted to the following hospitality firms: grand Hotel and Resort, Asaba, Federal Palace Hotel Lagos and Royalton Hotel, Abuja. These firms were chosen based on their operations of comprehensive hospitality business, management, location and being true representation of the industry in Nigeria.

1.7 LIMITATIONS OF THE STUDY

The study is restricted by the vast nature of Nigeria. The Nigerian hospitality industry operates in urban and rural areas of Nigeria, thereby making it humanly and materially impossible to cover the whole country. This limitation is not only applicable to Nigeria, but worldwide, as the hospitality industry by their nature is very vast and extensive in their locations. Again, finance, Time and dearth of literature did not in any way help matters.

1.8 DEFINITION OF TERMS

ADVERTISING: Any paid form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor.

AFFILIATED HOTEL: One of a chain, franchise or referral system, the membership of which provides special advantages, particularly a national reservation system.

AUGMENTED PRODUCT: Additional customer services and benefits built around the core and actual product.

BOOKING: selling hotel space, either to an individual or to a group needing a block of rooms.

CLASS: The quality of the hotel with average room rate criterion.

CUSTOMER SATISFACTION: Customer satisfaction with a purchase depends on the product’s performance relative to buyers’ expectations. If performance matches expectations, the customer is satisfied.

DIRECT MARKETING: Direct marketing is an interactive system of marketing that uses one or more advertising media that interact directly with consumers, to affect a measurable response and/or transaction at any location.

HOSPITALITY INDUSTRY: Hospitality industry is made up of those business that do one or more of the following: provide accommodation for travelers, prepare food and beverages services and provide entertainment fore the traveler.

HOSPITALITY MARKETING MIX: contain four major sub-mixes: product/service mix, presentation mix, communications mix and distribution mix.

HOTEL: A commercial establishment that provides lodging, food and other services to the public. The hotel business is an important industry in many countries especially in those attracting a large tourist trade. Hotels are classified according locations, facilities, services offered and clientele served.

HOSPITALITY MARKETING: Is a social and managerial process by which individuals and groups obtain what they need and such, the central goal of hospitality marketing is customer satisfaction leading to profit.

INSEPERABILITY: A major characteristics of services, they are produced and consumed at the same time and cannot be separated from their providers, whether the Providers are people or machine.

INTANGIBILITY: A characteristics of services, they cannot be seen, tested, felt, hard or smelled before they are bought.

MARKETING: Means working within markets to bring about exchanges for satisfying human needs and wants and can be defined thus “human activity directed at satisfying needs and wants through exchange process”.

MARKETING INFORMATION SYSTEM: A structuring of people, equipment and procedures to gather, sort, analyze and distribute needed, timely and accurate information to marketing decision makers.

MARKETING DATA BASE: An organized set of data about individual customers or prospects that can be used to generate and qualify customer’s needs, sell product and services and maintain customers relationship.

PERISHABILITY: A major characteristics of services, they cannot be stored for later use.

POTENTIAL MARKET: The set of customers who have professed some level of interest in a particular product.

PRICE: The amount of money charged for a product or service, or the sum of the value, customers exchange for benefits of having or using the products or service.

PRODUCT: anything that can be offered to a market or attention, acquisition, use or consumption that might satisfy a want or need. It included physical objects, services, persons, places organization and ideas.

RELATION SHIP MARKETING: This involves creating, maintaining and enhancing strong relationship with customers and other stakeholders.

RESERVATION: A mutual agreement between the guest and the hotel. The former to take accommodation at a given period and the later to provide it.

SERVICE: Any activity, benefit or satisfaction that is offered for sale. It essentially intangible and does not result in the ownership of anything. Its production may or for not be tied to a physical product.

SERVICE CULTURE: A system of values and benefits in an organization that reinforce the idea that providing the customers with quality services is the principal concerns of the business.

TANGENT MARKET: A set of buyers, sharing common needs or characteristics that a company decides to serve.

TELE MARKETING: Using the telephone to sell directly to consumers.

TRANSIENT HOTEL: A hotel catering to short stay guests, who stop en-route to other destinations.

VARIABILITY: A major characteristics of services, their quality may vary greatly depending on who provides them, when and where and how they are provided.

REFERENCES

Agbonifo, Ogwo and Nnolim (1998): Marketing in Nigeria: Concepts. Principles and Decision; Afritowers Limited Publisher.

Davidson, J.E (1987) Offensive Marketing; London: Pelican Publisher.

Federal Government of Nigeria (1989): Report of National Hotels Classification and Grading Exercise; Lagos Federal Government Press.

Kotler, P, Bowen J. and Makens J. (1996): Marketing for Hospitality and Tourism; New Jewsy, USA: Prentice Hall Inc.

Obia, E.C (2003): “Hospitality management” NIHTOURS Lecture; Kano: Nigeria Institute for hospitality and Tourism Studies.