Chekitan S. Dev

Market orientation and performance in service firms: role of innovation

There is wide acceptance of the precept that market orientation is associated with superior firm performance. However, empirical support for the proposition in prior literature is weak. This study examines the relationship between market orientation and performance with data from 201 international hotels and finds that market orientation is positively associated with both judgmental measures of performance – service quality, customer satisfaction, and employee satisfaction, and objective measures of performance – occupancy rate, gross operating profit, and market share. Specifically, the study finds that the immediate impact of market orientation is to spur innovation, which, in turn, enhances judgmental performance, which, in turn, enhances objective performance.

Managing Marketing Channel Opportunism:The Efficacy of Alternative Governance Mechanisms

The authors examine three governance mechanisms according to how well they mitigate opportunism in marketing channels. Using the U.S. hotel industry as the research context, the authors investigate how opportunism is limited by (1) ownership, (2) investment in transaction-specific assets, and (3) norms of relational exchange. They also investigate how various combinations of these governance mechanisms affect opportunistic behavior in hotel channels. Overall, the results generally support emphasizing relational norms in managing opportunism in marketing channels. The results also indicate that opportunism can be exacerbated when ownership or investments in transaction-specific assets are accentuated as governance mechanisms.

Looking Beyond RevPAR: Productivity Consequences of Hotel Strategies

A study of 396 North American properties operated by two hotel companies indicates that decisions about a hotels size, its service orientation, its strategic orientation, its ownership arrangement, and its management arrangement significantly affect a number of labor-and capital-productivity measures. Capital productivity is defined as total sales, gross operating profits, and income before fixed charges per available room; labor productivity is defined as those same measures per full-time equivalent employee, for a total of six productivity measures in all. The hotels size, its service orientation, its ownership arrangement, and its management arrangement affect productivity. Large hotels, it seems, use their labor more productively, and generate the most income from their capital investments. Upscale hotels are inclined to be more productive overall than mid-market hotels, while hotels operated by branded management companies use their capital and labor resources more efficiently than do hotels operated independently or by independent management companies. Finally, company-owned properties tend to employ their labor more productively than do franchised hotels.

Managing Marketing Relationships Making Sure Everyone Plays on the Team

Much of the literature relating to managing marketing relationships focuses on limiting opportunistic activities by one or both partners in a relationship. Opportunistic behavior occurs when one partner seeks a short-term gain in a way that may damage the other partner or the relationship. In the case of a hotel belonging to a network or chain, such actions might include falsifying or suppressing monthly sales data. A study of over 400 individual hotels belonging to two hotel chains investigated the extent to which opportunism of individual hotels is limited by three governance mechanisms. Those mechanisms are (1) ownership by chain headquarters, (2) a hotels investment in transaction-specific assets (e.g., reservation-system software), and (3) shared norms of relational exchange. Of the three, taken either singly or together, only the shared norms of relational exchange were at all effective in managing hotel opportunism. Hotel opportunism declined with higher degrees of relational exchange. Hotel opportunism was exacerbated, however, when ownership or investments in transaction-specific assets were emphasized as governance mechanisms.

Improving Productivity in a Service Business Evidence from the Hotel Industry

Achieving increased productivity remains an important issue with many service firms. Therefore, the objective of this study was to gain insights as to how managers can improve the productivity of their service businesses. The context of the study was the hotel industry, in which the authors examined empirically the impact of labor and capital as well as selected strategic and organizational inputs on the dollar value added by the hotel. They found that regardless of hotel size, value added rose significantly with an increasing number of employees. Expanding the number of rooms available for sale as well as upscale positioning generated significantly greater value added for medium-sized hotels. The value added by large hotels was significantly enhanced when they were managed by a branded management company and were company owned. Constant returns to scale characterized the hotels. Relative to capital inputs, labor accounted for the bulk of value added.

To Look or Book: An Examination of Consumers’ Apprehensiveness toward Internet Use

In a series of three studies, a two-factor measure of apprehension toward Internet use was developed and tested among three independent samples of consumers. The relationship between general Internet apprehensiveness (GIA) and transactional Internet apprehensiveness (TIA) was examined in concert with the relationship between consumers’ online information seeking, purchasing intentions, and behaviors. Results indicated that (1) a two-factor measure of GIA and TIA demonstrated construct validity across three independent samples of potential Internet users, (2) GIA is more strongly related to perceptions of Internet use for information seeking compared to online purchasing, and (3) TIA is more strongly related to perceptions of online purchasing activities and reported online purchasing behavior compared with perceptions of online information-seeking behavior. Implications for management practice and further research are presented.

Brands Across Borders: Determining Factors in Choosing Franchising or Management Contracts for Entering International Markets

Abstract Should hotel companies expand internationally through management contracts or franchising? It depends on a companys core competencies—as well as the resources available in the market itself.

The Franchisor-Franchisee relationship: A key to franchise performance

A study of 331 general managers with two major U.S. hotel chains found that a strong relationship between a franchisee and a franchisor meant better hotel performance compared to competing hotels and to other hotels in the chain. The properties with a strong relationship to headquarters had higher quality-assurance and guest-satisfaction ratings than did other hotels in the chain. Compared to competitors, hotels with a strong partnership with their franchisor enjoyed higher occupancy, room rates, and gross profit. The benefits to the franchisee are self-evident, and the franchisor also benefits from having a string of high-performing hotels.

Marketing Challenges for the Next Decade

A 1998 think tank that examined marketing issues facing the hospitality industry for the next decade concluded that the information-technology function should be merged with marketing. The idea wou...

Hospitality Marketing: A Retrospective Analysis (1960-2010) and Predictions (2010-2020)

Looking at the evolution of marketing as recorded in the pages of the Cornell Hospitality Quarterly , one sees a continual increase in the complexity of the marketing issues for the hospitality industry. Each decade’s articles have been marked by an emphasis on a particular aspect of marketing, generally representing the leading edge of marketing research and thinking. The 1960s, for instance, was the decade of promotion, with numerous articles explaining how to respond to increased competition with an intentional marketing program. The 1970s saw the development of new lodging products and the beginnings of market research, with a greater focus on the customer and on continual product development. The explosion of brands and product tiers in the 1980s ushered in an era of brand management, and the decade also saw the initial lodging industry applications of revenue management, adapted from the airline industry. Following the brutal shakeout of the early 1990s, the lodging industry turned to customer satisfaction and loyalty as key elements of operations, with numerous articles examining ways to measure and manage customer satisfaction. The eruption of the internet dominated the first decade of the twenty-first century, as hospitality companies and guests alike sought to understand how to use this amazing tool. Going forward, the 2010s will continue the changes wrought by electronic media, most particularly the eclipse of printed media and the rise of social media.