Page 261 - DMGT408DMGT203_Marketing Management

Marketing Management/Essentials of Marketing

Notes

Case Study Taj Hotel

ight from early 1900s, the Taj stood for class and comfort. It was a place where
viceroys of the Empire arrived and departed amidst scenes of splendour, typical of
RRaj. From the very beginning it was one of the wonders of the Orient! Singapore’s
Raffles, Hong Kong’s Peninsula, and Frank Lloyd Wright’s Imperial did not come up to
the level of the Taj in spite of their rich ancestry. The reason the hotel towered over the rest
was because of the amazing attention to detail that was paid by its founder, Jamsetji
Nusserwanji Tata himself. It was a time when Indians were not allowed to enter most of
the prestigious hotels and clubs. Legend has it, that this was one of the reason why Tata
went ahead with the project though he was, at that time, busy with plans to industrialise
India. He made sure that the Taj would have its own laundry, an aerated water bottling
plant, electroplating for its silverware, a Mora silver burnishing machine, a crockery
washing plant and elevators. The hotel was completed at a cost of 500,000 pounds in 1904.
The Taj Intercontinental (the new wing) was built in 1971 and rapidly after that came the
Lake Palace, and Rambagh Palace at Udaipur and Jaipur respectively. The company
pioneered the concept of conversion of century-old palaces into hotels! Today this has
become an USP of the Taj group, and a new logo is being designed to incorporate the
palaces aspect of the product. In mid 1970s, the chain expanded to Chennai (Taj Coromandel
and Fisherman’s Cove) and For Aguada at Goa. Here too, Taj scored over the others with
its timing. At that time, Goa was not a tourists’ paradise.
Around the same time it set up Ganges Varanasi and started international flight kitchens
too. The end of the decade saw the coming up of the Taj at Delhi. This last marked the start
of an ethnic style in hotels with international standards. By this time it appeared that
nothing could halt the phenomenal growth of the Taj. In the 1980s, two more hotels were
built in Delhi, two in Bangalore, and one each in Chennai, Ooty and Agra. Next came
Jaimahal Palace Hotel in Jaipur as well as the New Delhi Flight Kitchen. The new hotels
were built taking the original Taj as the model hotel. The Indian Hotels Co. Ltd. is the
parent company. The chain is managed by the The Indian Hotels Co. Ltd., the Indian
Resort Hotels, Ltd., the Oriental Hotels Co. Ltd., Piem Hotels Co. Ltd., and the Benares
Hotels Co. Ltd.
There was hardly any direct advertising to attract consumers. In fact, this element of
marketing mix was absent till about 1999. The brand being an established one, advertising
was not considered to be necessary. Secondly, the company was conservative and media
shy for many, many years.
But nothing can go forever without a blemish. And so it was with Taj too. Cracks became
evident when recession loomed large over the Indian economy. Excess capacity made
some of the ventures unprofitable, especially overseas ones.
Managing Director Krishnakumar has it pat. “The vision for the Taj Group is for it to be a
select chain, present globally, Asia, perhaps, in character, but absolutely international in
terms of systems and processes and with a strong West European focus. The way forward
was to make sure that the entire Taj team is imbued with the missionary zeal to sell the
brand.” International travellers form the bulk of the market for the Taj, particularly in the
metros. Even the profile of Indian consumers is changing. In smaller cities, such as
Hyderabad, though, the foreign element is a little lower but overall, the Taj has a higher
dollar rate of revenue – approximately 70 per cent comes from international guests.
Contd...

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