A Marketing Report on INDIAN HOTELS COMPANY LTD

Submitted by:

Kundan Kumar 070901203 Batch

MBA(IS)2nd

1. EXECUTIVE SUMMARY .. 2. OBJECTIVE. 3. INDUSTRY PROFILE. 6 5

4. SWOT ANALYSIS. 8 5. MARKETING STRATEGIES. 6. FINANCIAL PROJECTION.. 7. RECOMMENDATION..15 8. REFERENCES.16 11 13

Executive summary

Report

: Indian Hotels Company Ltd.

Introduction: Taj is a strategic Business unit of TATA. And it is the largest Hotels Company in Asia .Tata which is the parent company of Taj is not just a company but it is treated as pride of the nation. Taj has played important role for development of tourism place. Taj has basically categories of Hotels 1)Luxury Hotel 2)Business Hotel 3) Leisure Hotel .But now a days they are also moving to new segments of the market .so they have successfully launched the Ginger hotels. Taj has also different business in several area of hospitality. It has Taj Sats for air catering services. They have Taj Air for providing the charter planes for business organization. Purpose of the study: The purpose of the study is to give light on the every aspect or every application of marketing. So here in this study I have choosen the hospitality industry and as a organization I have choosen a Taj hotel

because they are number one in the country as well as they are the most effective in the Asias Hotels industry. So by this study I have learned that how they are applying marketing mix for their marketing development. How they are doing segmentation .How they are planning or targeting to cover those segments. What are their pricing strategies? And lastly how they are promoting their service industry. Result of study: By this study I have found all type of data related to marketing plan. I have done SWOT analysis first to analyze what are the strength and weakness they have .What are the opportunities and Threats they have. Then I have analyzed the several type of threats with the help of Porters five force model .After that I assessed all type of growth strategies which is right now following by the Taj hotel. I found two type of growth strategy they are following. First they are applying intensive growth and then for future growth they are applying integrative growth. They are doing several alliances with several leader hotel companies for their integrative growth. I have also done the financial study about the Taj Hotel. How was the performance in last year and how is the performance in current year and also what is growth rate of Taj hotel. What are the effect is taken place after strategic alliances . Conclusion: The whole study of the analysis shows that several things related to tourism industry in the world, our country hospitality and also the performance of Taj hotels in current and booming scenario. First tourism is going well and it will be better in future also not in the world only for our country point of view it is growing with very rapid pace. It is also providing the very good employment opportunities. It is giving 4

valuable amount in the development of Indian economy and playing a good role for Country GDP.And for the company point of view Taj is doing very good business and it is performing like a leader. And they really moving their steps with good strategy either in the country or outside the country.

OBJECTIVE The topic of the project is Marketing Strategies and Analysis on Indian Hotel and Catering Limited. The essence of this project is to get the information regarding the company performance in market and the area in which it needs further improvement. Moreover to search out the reasons for the customers needs and preferences. The main purpose of such type of project is too familiar with theoretical ideas in the real work place. It will give idea to learn how to 5

develop himself or herself by applying their theoretical views in the real life and also analyze the market on any field. Training is essential to improve skill; to tackle unfamiliar situation; to talk with difference personalities; thereby to create a good manager. So by completion of this project , we can adopt the situation of the concern quickly based on his learning about all type of marketing research and also how to develop our strategies in unrelated environment. The present study gives comparative ideas that what strategies Taj Hotels uses and its competitors are adopting what strategies to compete with Taj Hotels . And this project also help to find out out the factors which are influencing them to make marketing plans for competing with other companies. The purpose of the study is to find how the various factors and the reasons which can affect the business of Taj Hotels.

INDUSTRY PROFILE: In India Tourism sector in Indian economy is playing vital role in country's GDP and it is about 5.9 percent of the GDP .Also this sector 6

has provided employment to 41.8 millions. The Indian tourism industries has good rank in the world and it is now in the second position after china. Between 1991 to 2007 the total cumulative FDI has been around 517.83 million, and it is about 1.18 percent of the Indian total FDI.Indian Tourism industry is now performing so well and they are actually outperforming the global tourism industry. They are outperforming the global trousim industry not in the number of international tourists but also in terms of revenue also. The WTTC which is the acronym of World Travel and Trousim Council has told that Indian and China will be the hot spot of trouism industry not only for current scenario but also for coming 10 to 15 years. WTTC has projected that Indias trousim industry will grow to current postion like 39 billion US dollor to 90 billion US dollor in coming 10 years.(source:http://www.ciionline.org)

INDIAN HOTELS LTD COMPANY PROFILE

An Indian hotel is established in 1903, and it is also known as Taj Hotels and Palace. It is part of the Tata group, which is a well known and Indias leading premier business house.

Indian Hotels

is one of the finest and largest hotels

group .They have 61 hotels and they have covered 42 location through the nation. They have also several hotels across the international location like Australia,Maldiv,Italy,Srilanka,Malaysia,Africa and in the Middle East also. They have total of 17 hotels in outside of the country. Taj hotel is not just a hotel but actually the presented themselves in India as a innovator .They have first introduced several international cuisines like Californian, Sichuan, Mexican, Thai and Italian cuisines in the country. They opened 24 hour coffee shop in Taj hotel, Mumbai and this was the first 24 hour open coffee shop in the country in 1972. There was a period between 1970 to 1990 ,Taj had played the significant role to promote and developed the several Indian tourists destination and at that time government gave the enough support for that development .And government also made the infrastructure for that tourists destinations like rail road to roadways. Taj hotels group has very good presence in international arena through their Taj network regional sales and also they have PR office in several countries like UK, Germany , Singapore, Dubai, Italy, Sydny, USA and Tokio . During the last few years Taj has also given the concentration on Indian ocean rim . So they have successfully launched the Taj Exotica Resort & Spa ,in Mauritius.

Taj is also operating in the field of aviation sector so they have right now 2000 falcon aircraft .They provide the chartered flight to the business people. Taj is also operating largest south Asia airline catering services through Taj Sats.It is joint venture with Singapore Airport Terminal services which is subsidiary of Singapore Airlines. http://www.tajhotelscom) (Source:-

SWOT Analysis Strength: Good brand name Tata :Tata is a big name in India and it is the oldest company in hotel industry .And Tata brand is well known for Reliability. Good Market Share : Taj has very good market share and also it is leading hotel industry. Wide variety of Hotel in different different range:Taj has different range of hotels so they target different segments of people. Better Infrastructure :Taj has very good infrastructure and very good culture. They have several alliances with several national and international players. Weakness: Very - very costly:-

Taj hotels are very costly .Its lowest cost hotels is Ginger Hotel but that hotel is also cost 1000 rs per night .So for Indian lower class people do not feel comfort about it. They have hotels in only 42 locations.

Opportunity: 10 millions tourists are expected to come. JBIC declared that Right now India is the one of the most attractive destination for investment and it is now fifth position. A magazine which is most celebrated traveling magazine named Conde Nast Traveler has ranked India in the top 10 tourist. This tourism industry is within the top third highest earner the highest number of manpower now a days (Source:http://www.ciionline.org) Threats: Dawnay Day is going to invest US$ 300 million in setting up Ten Hotels in India Dan Hotels has Plan to enter in Indian Market. Four Seasons, a Canada-based high-end luxury hotel chain operator, will launch its first Indian property in Mumbai in March (Source:http://www.ibef.org) PORTERS MODEL foreign exchange for the country and this sector has contributed

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Threat of competitors Though TAJ Hotels has the highest market share presently, it has many competitors namely Leela Hotels, East India Hotels, ITC Hotels. Threat of new entrants A lot of new players both International and Domestic are entering into the Indian Hotel industry. International: Four Seasons, Shangrila. Domestic : Ista hotels, Chancery group. Threat of substitutes A new segment of service apartments and guest houses pose a threat to Taj Hotels and as a result may loose a major share of their business class customers. Eg- Infosys has built hotels and apartments for their employees and delegates. Bargaining power of customers Customers tend to have too many choices with regard to the prices and as result the customers tend to gain. Threat of suppliers: All the long-term Department supplies come from Central purchasing

Eg: BedSheet, Crockery, Foreign Liquor, furniture

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TAJ`S MARKET STRATEGIES Intensive Growth:1>Market Penetration Strategy Taj hotels has three type of hotels: 1) Luxury Hotels 2) Business Hotels 3) Leisure Hotels So for different need of peoples different range of hotels is there. So it increases the Market Penetration. 2>Product Development Strategy It launched the Ginger Hotel for current market with new product to cover the middle class family. And right now they have 11 Ginger hotels through the country. And right now they are also going to open Ginger hotel in Jamshedpur, Mangalore, panji, Ludhiyana, Tirupur etc. IHCL has successfully opened the Taj Spa in their Mumbai located Taj Mahal Palace & Tower. And also they are going to open their Spas in several hotels of their group. 3>Market Development Strategy Taj GVK Hotels & Resorts Limited and their associates hotels group Oriental Hotels Limited are planning for operating their

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business in Bangalore and Chandigarh so they are going to set up properties. And right now they are also going to open Ginger hotel in Jamshedpur , Mangalore ,panji, Ludhiyana ,Tirupur etc 4>Diversification Strategy Taj Hotels Resorts and Palaces has taken luxury and hospitality to the skies with TajAir.They provide the private chartered aircraft to the business need. And they have 2000 aircraft. Taj Sats is right now offering the flight catering and related services .It is operating on four metro city in India.. TajSATS caters to over 26 international and domestic airlines, and is the leader in the Indian flight catering market. ITHC has formed Inditravel in 2002, and then post acquisition of 18 year old agency Stallion Travel Services Pvt. Ltd. It has management institution.

Integrative Growth Strategy: Taj Hotels Resorts and Places has done the agreement for acquirement of the Boston based hotels and resorts RITZCARLTON. They have also entered in the Strategic partnership in Doha with Qatar Sports for manage the Taj Exotica Golf Resort and Spa. They have also done the marketing alliance with Shilla that will provide portfolio of nineteen hotels. And among these 19 hotels 17 hotels will operate under the Taj Luxury Hotels portfolio and two hotels will operate under Shilla group.

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They have also done the partnership with the Raffles so with help of these alliances the company will operate 29 hotels with that Raffles. So among these 29 hotels 14 Hotels will operate under the Luxury Taj Portfolio and 15 hotels will operate under the Rafles Hotels & Resort.

They have done the Strategic alliance with Abu-Dhabi based properties ALDAR properties .So they will operate some hotels and resorts .So for that they have already taken a first step that they are making a Resort in the Yes Island.

Taj Hotels Resorts and Palaces has involved alliance with Okura Hotels & Resorts. Alliance with silversear cruise,a europian cruise company. (Source:http://www.tajhotelscom)

Taj has taken the 10 percent stake in Orient Express Hotels which is well known hotel and also it is listed in NYSE list. And for this stake they have paid 850 crores. (Source:-

http://www.ibef.org)

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Financial Projection

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(Source:http://www.tajhotelscom)

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Analysis:Revenue:-The company income has increased by 40 percent from 1154.80 crores to 1618.83 crores .And due to amalgamation of five companies into Taj ,so they are responsible for 148.93 crores increases .The room revenue has also increased by 50 percent from 563.44 crores to 845.10 crores .And here merging companies also play a vital role for that growth and they contributed 88.59 crores.The average room rate has also increased by 29 percent from 7186 crores to 9234 crores.The food and beverage revenue has increased by 28 percent from 406.60 crores to rupees 521.20 crores. Here merging companies are responsible for 41.90 crores. Operating Expenses:-operating expenses has increased to 804.64 crores to 983.14 crores.Means 22 percent increase and also 37.63 crores due to merging companies. Here this increase mainly due to intence competition and increase in advertisement and general expenses.And Taj has also giving advertisement operating expenses is increasing due to establish Taj as a global brand and create awareness of its rapid international expansion. Interest costs and depreciation:-It has increased from 20.36 crores to 71.89 crores due to acquisition of loans of rs 414.03 crores from merging companies. Profit before Tax:-This has increased from 272.00 crores to 474.64 crores ,so it has gained 75 percent growth and also managed 47.87 crores due to mergers.

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Profit After Tax:-It has increased from 183.78 crores to 322.29 crores so it has increased 75 percent growth.

Recommendation They have right now hotels in only for 5 star segments so they should Venture into other segments in the hotel sectors like 3-star or 4 -star. Because our most of the population are belong to the middle class families so there is a huge market for that segment .And so for this they should deeply think over it. Else another big player can use this segment for their strategic plan. Due to Expand on international acquisitions-last quarter net profit was up 46.22 crores revenues could be used to expand further. (Business line November 1,2006).So they should give more attention for their strategic growth to international alliances and merger for international hotel market. Right now they have only 11 Ginger hotels so they should open Ginger hotel to more location for people. In India, Ginger type hotel have more demand. Thats why our small hotels industry player are getting very much profit.

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In India .Medical tourism is not very popular but in western nation it is hugly popular So Taj should also give importance to this medical tourism.

Taj has hotels in 42 locations in India. But India is a big country so they should set up more hotels in our country .It will give advantage to Taj as well as it increases the employments also.

They should discover and open new properties, which are not ventured into by other large players.

References 1. Tourism. (11-04-2008). Retrieved 14 june, 2008, from http://cii.in/menu_content.php?menu_id=237 2.. The Indian Hotels Company(2008). Retrieved 13 June, 2008 from http://www.tata.com/indian_hotels/index.htm 3. Hotel(2008). Retrieved 14 June,2008 form http://www.itcportal.com/sets/hotel_frames.html 4. Marketing Alliances(2008). Retrieved 13 June,2008 from http://www.tajhotels.com/PartnersAffiliates/default.htm

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5. Campton Place Luxury Hotel in San Francisco(2008). Retrieved 13 June,2008 from http://www.steptours.com/article.cfm/id/171211 6. Taj Hotels Announces A Golf Resort Project In Doha(13 Dec 2006).Retrieved 11 June,2008 from http://www.hsmaieconnect.org/news/154000320/4028812.html 7. Taj Hotels Resorts and Palaces join Skywards (03rd November, 2005).Retrieved 7 June,2008 form http://srilankan.aero/aboutus_news/news135_taj_hotels.shtml

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