Tom Oliver, the CEO of Holiday Hospitality Corp, was struggling to differentiate among the variety of facilities offered under the Holiday brand - Holiday Inn Select, Holiday Inn Express, and Crowne Plaza Hotels. A customer survey found that consumers did not understand the differences between the three types and complained about poor quality and service. Franchisees also resisted a proposed name change to better differentiate the facilities.
Oliver developed a theoretical framework to understand how differentiation and cooperation from franchise owners could impact revenue. He hypothesized that: 1) differentiation would positively impact revenue, 2) improved customer service would positively impact revenue, 3) a customer's ability to differentiate would moderate the impact of differentiation on revenue, and 4)
Tom Oliver, the CEO of Holiday Hospitality Corp, was struggling to differentiate among the variety of facilities offered under the Holiday brand - Holiday Inn Select, Holiday Inn Express, and Crowne Plaza Hotels. A customer survey found that consumers did not understand the differences between the three types and complained about poor quality and service. Franchisees also resisted a proposed name change to better differentiate the facilities.
Oliver developed a theoretical framework to understand how differentiation and cooperation from franchise owners could impact revenue. He hypothesized that: 1) differentiation would positively impact revenue, 2) improved customer service would positively impact revenue, 3) a customer's ability to differentiate would moderate the impact of differentiation on revenue, and 4)
Tom Oliver, the CEO of Holiday Hospitality Corp, was struggling to differentiate among the variety of facilities offered under the Holiday brand - Holiday Inn Select, Holiday Inn Express, and Crowne Plaza Hotels. A customer survey found that consumers did not understand the differences between the three types and complained about poor quality and service. Franchisees also resisted a proposed name change to better differentiate the facilities.
Oliver developed a theoretical framework to understand how differentiation and cooperation from franchise owners could impact revenue. He hypothesized that: 1) differentiation would positively impact revenue, 2) improved customer service would positively impact revenue, 3) a customer's ability to differentiate would moderate the impact of differentiation on revenue, and 4)
For the following case titled Sleepless Nights at Holiday Inn (published in Business Week
and adapted here!
a" Identify the proble# b" $e%elop a theoretical fra#ework c" $e%elop at least four hypotheses Sleepless Nights At Holiday Inn &ust a few years ago' (o# )li%er' the *hief +,ecuti%e of Holiday Hospitality *orp"' was struggling to differentiate a#ong the %ariety of facilities offered to clients under the Holiday flagship-the Holiday Inn Select designed for business tra%elers' the Holiday Inn +,press used by penny pinchers' and the *rowne .la/a Hotels' the lu,urious hotels #eant for the big spenders" )li%er felt that re%enues could be 0uadrupled if only clients could differentiate a#ong these" 1een on de%eloping a %iable strategy for Holiday Hospitality' which suffered fro# brand confusion' (o# )li%er conducted a custo#er sur%ey of those who had used each type of facility' and found the following" (he consu#ers didn2t ha%e a clue as to the differences a#ong the three different types" 3any co#plained that the buildings were old and not properly #aintained' and the 0uality ratings of ser%ice and other factors were also poor" Further#ore' when word spread that one of the conte#plated strategies of )li%er was a na#e change to differentiate the three facilities' irate franchises balked" (heir #i,ed #essages did not help consu#ers to understand the differences' either" )li%er thought that he first needed to understand how the different classifications would be i#portant to the se%eral classes of clients' and then he could #arket the heck out of the# and greatly enhance the re%enues" Si#ultaneously' he recogni/ed that unless the franchise owners fully cooperated with hi# in all his plans' #ere face lifting and i#pro%e#ent of custo#er ser%ice would not bring added re%enues" SLEEPLESS NIGHTS AT HOLIDAY INN a. Identify the problem How clients could diferentiate and cooperative franchise owners afect the diferentiation? b. Develop a onept!al model
Improvement Customer Service Diferentiation Gain more revenue
Cooperative franchise owners
Client could diferentiate (+ (+ (+ (+ I" I" #" #" D" ! "evenue is the total amount of mone# received $# the compan# for %oods sold or services provided durin% a certain time period& (www&investorwords&com& ' Diferentation is the process of distin%uishin% a product or oferin% from others( to ma)e it more attractive to a particular tar%et mar)et& *his involves diferentiatin% it from competitor+s products as well as a ,rm-s own product oferin%s (www&en&wi)ipedia&or%& .roduct diferentiation creates customer preferences which allow companies to ma)e a$ove normal pro,ts& /ccordin% to the a$ove e0planation( there will $e a positive relationship $etween diferentiation and %ainin% revenue& 1 Customer service is all interactions $etween a customer and a product provider at the time of sale( and thereafter& Customer service adds value to a product and $uilds endurin% relationship& (www& 2usinessdictionar#&com& 2ased on the theor# of customer service( customers will %et not onl# the products $ut also additional value that ma)e them $e more satis,ed in products and companies& Since the companies %ive a %ood service to customers( the possi$ilit# that customers will $e satisfied and lo#al to the compan# is hi%her& Conse3uentl#( satisfaction and lo#alt# of customers will lead the compan# %ainin% more revenue& 4 Client could diferentiate& *he a$ilit# of clients to see diferences $etween products oferin% $# one compan# and the product of one compan# compare to other companies& If customers could diferentiate products in $oth wa#s( the# will $e a$le to choose the $est product that suit them from all choices the# have& Customers+ satisfaction and lo#alt# will $e a %ood conse3uence from it which help companies %ain more income& *hat is the reason wh# the a$ilit# of customers to diferentiate will ma)e diferentiation has positive efect to %ain more revenue& 5 Cooperative franchise owners& 6ver# strate%# in the compan# alwa#s need support from its sta)eholders& In this case( *om 7liver needs a support from franchise owners to ma)e his strate%# sucessfull# and achieve its %oals (%ain more revenue& *he support from all of sta)eholders and franchise owners will support the positive relationship $etween diferentiation and %ain more revenue& $ Develop at lea%t fo!r hypothe%e% H!& Diferentiation positivel# related with %ain more revenue& H'& Improvement customer service positivel# related with %ain more revenue& H1& Client could diferentiate will moderate the relationship $etween diferentiation and %ain more revenue& H4& Cooperative franchise owners will moderate the relationship $etween diferentiation and %ain more revenue&
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