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PURCHASING OF HOTEL SERVICES

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND TO THE STUDY

In this nation today, as economic activities advance, purchasing activities are changing fast. New markets are emerging, trading blocks are extending, and communication channels are diversified. Even selling of services are changing at revolutionary pace. However, for any business organization to keep to pace, it must incorporate some element of purchasing programmes into its programmes and policies. There fore , for us to effectively appreciate purchasing of hotel services, it become imperative for us to understand what purchasing, services and hotels are all about. Purchasing could be seen as a process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individuals and organizational goals.

According to Kotler the second European Edition, principle of Purchasing, Purchasing is a social and management process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others. These would say purchasing is living for customer through a firm and being sustained such firm. A service is any activity or benefit that one party can offer to another which essentially intangible and does not result in ownership of anything. Activities such as rendering or rending a hotel, depositing money in a bank, traveling on an aero plane, visiting a doctor, getting a hair cut having a car repair. It is also important to note that many manufacturers also supply a range of services alongside their product, like distribution and delivery, equipment repair and maintenance, training programmes, technical consultant and maintenance. building where meals and rooms are provided for travelers. These services are usually offered and in return customers pay money for such services. Quality halls and rooms suite are provided such as swimming pools, complete business center, laundry services to mention few. Hotels in Nigeria offer important services and facilities such as lodging, accommodation (presidential suite, executive suite and master bedroom).

The word restaurant is used synonymous with hotel, both the basic difference is that a restaurant is a place where meals are prepared, served and eaten. Some restaurant are well equipped having television sets, musical sets etc, where customers can have relaxation and comfort. The increased challenges in hotel services has made it necessary for hotels to be more purchasing oriented in thej cause of rendering their services. They aimed at satisfying customer’s needs and want as well as fulfilling their own organization goals. Hotel  management therefore can be defined as the application of purchasing concept in the hotel industry so as to achieve more effective services to customers. There have been many changes and development in the hotel industry over the past years. Some of these change reflect on the economic, political and social life of customers.( with other change like technology). It was recently that hoteliers become more transformed and re – engineered to meet this present day trend hotel management.

Hotel industries are confronted with drastic competition to determine who will concern or win the customers patronage based on goods oriented services. In view of these, any hotel wishing to survive in the present day competition should endeavor to provide good and result oriented services to its vast customers and as such create better image of their organization. This help to boast the promotional activities of the company (to succeed in satisfying customers and building good will, for the organization) A prepared application of purchasing concept by any organization in its operation is very vital to the successful existence of such organization such as Mac –davos hotel. Purchasing concept as a commercial process starts before production sets in it continues even after sales if form of after sales services long after the production have been sole and transferred to the customers. As concept, purchasing philosophy focus more on the customer’s satisfaction as against other concept like the selling concept or production or product concept. Purchasing concept coloring expresses the following

Purchasing needs profitability

Finding want and fulfilling them

Love the customers not the product.

To satisfy customers prepare, purchasing must be put into place. But customers cannot satisfy effectively without knowing their needs. The essence of knowing customers is to be able to formulate purchasing strategies (game plan) to create quality services that will lead to satisfaction and profitability for the customers and the organization respectively. One of such services industry is the hotel service industry. Hotel may appeal to one or more customers segment among different levels of service. Hotel business as a tourist industry renders services to traveler and other customers as they go about their business and tourism.

1.2 STATEMENT OF PROBLEMS

It is no exaggeration to say Mac – Davos Hotel, is one of the leading Hotels in Enugu. Although many hotels in Enugu are performing below standard, thereby making average performance appear magnificent this is not meeting the required patronage by numerous customers and probably Mac – Davos is not an exception. One may be forced to believe that the low performance among various hotels in Enugu Metropolis may likely be as a result of non-application of effective purchasing principles and strategies. Mac Davos in an attempt to increase the rate of patronage by offering better service and promotional activities has increased her cost without necessarily increasing the profitability of the hotel. Note so, the hotel industry is becoming highly attractive and competitive. There are lots of big hotels in Enugu, operating on the same strategies with Mac Davos. The question now is how, how can (Mac Davos) Hotels improve its operation through purchasing strategies. These and many other related question are the focus of this research work.

1.3 OBJECTIVE OF THE STUDY

The aim of this research is as follows.

To find out if Mac-Davos Hotel is truly experiencing  high percentage of customer patronage.

To find out what purchasing strategies Mac-Davos Hotel is applying that attracts more customer

To find out why Mac-Davos Hotel is doing relatively well in creating awareness.

To determine the effect of high charge of services on customers at Mac-Davos.

To determine the impact purchasing strategies used by Mac-Davos Hotel on its operations

To determine the impact quality of service offer by Mac-Davos as it influence patronage

To make recommendations of how to improve hotel management in Enugu.

1.4     HYPOTHESIS FORMULATION    

In order to give focus to the study the following hypothesis were formulated.

Ho: The quality of services render by Mac – Davos Hotel Ltd dose not lead to increased customer patronage.

Hi: The quality of service render by Mac-Davos hotel Ltd lead to increase customer patronage.

Ho: The cost of charges on services by Mac-Davos Hotel to customer.

Hi: The cost of charge on services by Mac-Davos Hotel to customer

Ho: The purchasing strategies applied by Mac-Davos Hotel  lead to customer patronage.

Hi: The purchasing strategies applied by Mac-Davos Hotel does not lead to customer patronage.

1.5  SCOPE OF THE STUDY

This research work is directed toward the purchasing of hotel services. Emphasis will be placed on the application of purchasing strategies on a services industry such as the service industry. The institution of the study is Mac-Davos Hotel. Since the research is designed to assess how best purchasing strategies can lead to increase satisfaction and maximization of profit for the customer and the hotel respectively.

1.6     SIGNIFICANCE OF THE STUDY      

The finding of this research are expected to contribute to the following

(a}     It will enable the researcher to how best to market hotel service

(b}     It will be of great importance to researcher on the related topic

(c}     To provide needed information to improve on the strategies 
available to Mac-Davos.

1.7     LIMITATION OF THE STUDY

This work has been limited to Mac-Davos Hotel Enugu due to the short duration required to complete the research. Secondly the limitation of finance on the part of the researcher has also lead to restriction of this work to a hotel in Enugu. (Mac – Davos) However, a conclusion drawn from a hotel in Enugu can as well be applicable to other Hotel within Enugu Metropolis.

1.8     DEFINITION OF TERMS PURCHASING

Purchasing could be defined as management process responsible for identifying customers requirement satisfactory and profitably for the customers and the organization respectively.

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