All over the world, the hotel industry is making use of the internet to market and expand their frontiers. Internet marketing offers hotels a distribution channel to showcase their facilities. Majority of hotels in Ghana have taken to the internet with the aim of gaining competitive advantage.
The aim of this research is to investigate the internet marketing strategies among hotels in Ghana. The frame of reference for the research is based on the ICDT model, Sigala (2003) postulated the extended internet marketing mix model which includes the traditional four Ps and Customer relation dimensions. Measuring internet marketing activities based on these five dimensions is argued to be an appropriate, effective and valuable tool that fully exploits the transformational capabilities of the internet (O’Connor, 1999: Sigala, Lockwood, & Jones, 2001; Liu & Arnett’s, 2000).
Findings from the research shows that only 2 dimensions i.e place and product have been developed by all the hotels surveyed in Ghana. Also whereas, price is the least transformed dimension place is the most transformed by Ghanaian hotels. Furthermore, majority of the hotels
are not fully exploiting the full potential of the internet rather they are using the internet as a means to create awareness thereby adopting a globalization strategy.
In conclusion the survey has shown that most hotels in Ghana are under utilizing the potential of the internet despite the fact that many of them have websites. It is suggested that hotels in Ghana should engage the services of internet marketing professionals to develop a comprehensive internet marketing strategy upon which their websites could be developed to enable them take full advantage of the benefits associated with internet marketing.
Keywords: Internet Marketing Mix, Internet Marketing, Strategies, Quantitative research
We are most grateful to the Lord Almighty for sustaining us throughout the period of pursuing this Joint International Masters Programme between Lulea University of Technology - Sweden and University College of Education, Kumasi Campus.
Furthermore we wish to thank all our lecturers and especially our Supervisor Ms. Mana Farshid who carefully guided us through the thesis phase of the programme. Her criticisms benefitted us tremendously as it pushed us to work harder to meet all the required standards for this research.
Our special gratitude goes to our families - Mr. & Mrs John Koku Ogbeh, Mrs Margaret Koku, Joshua Koku and Miss Mary Kpeglar for giving us emotional support throughout the programme.
To all the hotels that participated in this survey and our research assistants who helped us to collect data we say thank you – because without them this research would not have been possible.
To our friends and course mates, group members and all who in diverse ways played meaningful roles during our study on campus we say thank you and God richly bless you.
Table of Contents Abstract . . . . . . . . . 2
Acknowledgement . . . . . . . . 3
Table of Contents . . . . . . . . 4 – 9
List of figures . . . . . . . . . 8
List of tables . . . . . . . . . 9
CHAPTER ONE 10 to 17
Introduction . . . . . . . . . 10
Background to the study . . . . . . 10
Problem statement and Purpose of study . . . . 14
Justification of the study . . . . . . 16
Organization of the Thesis . . . . . . 17
CHAPTER TWO 18 to 33
Literature Review . . . . . . . . 18
Hotel Industry and the Internet . . . . . 18
Advantages and Challenges of Internet Marketing . . . 19
Internet marketing models . . . . . . 20
Internet Value Chain Model . . . . . 21
Inputs from Suppliers . . . . 21
Internal Operations . . . . . 23
Customer Relations . . . . . 23
The Web-Marketing Mix (WMM) Model . . . 24
Scope . . . . . . 25
Site . . . . . . . 26
Synergy. . . . . . . 27
The E-commerce Service Index Framework . . . 27
Information Communication Distribution and Transaction
(ICDT) Model . . . . . . 28
The Internet Marketing Mix Model . . . . 30
Internet Tools . . . . . . . 32
CHAPTER THREE . . . . . . . . 34 to 41
Research Questions and Frame of Reference . . . . 34
Research Questions . . . . . . . 34
3.1.1 Procedure for Answering Research Question . . 35
Frame of Reference . . . . . . . 37
3.2.1 Dimensions of Internet Marketing Mix . . . . 38
CHAPTER FOUR 42 to 71
Research Methodology . . . . . . . 42
Research Perspectives . . . . . . 42
Research Purpose . . . . . . 43
Research Philosophy . . . . . . . 44
Research Approach . . . . . . . 45
Time Horizon . . . . . . . 47
Research Strategy . . . . . . . 48
Sample Selection . . . . . . . 49
Population . . . . . . . 49
Sampling Frame . . . . . . 49
Sample Size . . . . . . . 51
Sampling Technique . . . . . . 52
Data Collection Method . . . . . . 54
Types of Data Collected . . . . . 54
Questionnaire Design . . . . . . 54
Pre-testing and Final Administration . . . . 57
The Questionnaire . . . . . . 58
Data Presentation and Analysis . . . . . 65
Access Strategies . . . . . . . 67
Credibility of Research Findings . . . . . 68
Validity . . . . . . . 68
Reliability . . . . . . . 69
CHAPTER FIVE 72 to 89
Data Presentation and Analysis . . . . . . 72
General Information . . . . . . . 72
Level of Education . . . . . . 72
Hotel Type . . . . . . . 73
Hotel Category . . . . . . 74
Hotel Size . . . . . . . 75
Hotel Location . . . . . . . 76
Composition/Structure of the Internet Marketing Mix . . 78
Transformation of Product . . . . . 79
Transformation of Price . . . . . 80
Transformation of Place . . . . . 82
Transformation of Promotion . . . . . 83
Transformation of Customer Relation . . . . 84
Dimension of Hotels’ Internet Marketing Mix
and their Degree of Transformation. . . . . 85
CHAPTER SIX 90 to 101
Discussion of Findings, Conclusions and Implications . . . 90
Discussion of Findings . . . . . . 90
6.1.1 Profile of the Respondents . . . . . 90
6.1.2 RQ1. What is the composition/structure of the hotels
Internet Marketing Mix? . . . . . 91
6.1.3 RQ2. Which dimensions of the Internet Marketing Mix are
being transformed by the hotels? . . . . 92
6.1.4 RQ3. What Internet marketing strategies are being pursued
by hotels in Ghana? . . . . . . 92
6.1.5 RQ4. What is the level of sophistication/transformation of
Table 5.11 Frequency and Degree of Transformation of each of the
five Internet Marketing Dimensions . . . . 85
Table 5.12 Case summary statistics of the Hotels Internet
Marketing Mix Dimension. . . . . . 87
This chapter presents the reader with an overview of the study. It includes the background of the study, problem area and purpose of the study as well as justification of the Study. The limitations, delimitation and the organization of the Study are also presented.
1.1 Background to the Study
We live in a global world with an ever changing phase of technology; the role of traditional marketing is being challenged constantly. Local firms are beginning to face competition from foreign firms located both near and very far away in other continents. This trend is expected to continue as long as technology is available to facilitate business between a willing buyer and seller. Traditionally marketing is seen as an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders according to American Marketing Association (American marketing Association 2004).
Traditional marketing has been transformed by the new technological advances creating new business contexts throughout time. First dramatic implication for marketing occurred with the emergence of public press, telegraph, radio, telephone, television, and fax technology (Ngai, 2003).
Today, the Internet not only offers tremendous opportunities for marketers, it brings about a new way of conducting marketing and approaching consumer markets (Sterne, 1996; Hoffman & Novak, 1997; Peterson et al., 1997; Walsh & Godfrey, 2000; Rahman, 2003; Pitt et al., 1999a, b; Lichtenthal & Eliaz, 2003).
The Internet also melts the borders of national markets increasing and shifting the competition into electronic marketplace, where many companies are competing now on an international basis due to the global nature of e-commerce (Hoffman & Novak, 1996; Malhotra & Peterson, 2001). The coming of the Internet and digitalization of information together with the spread of the use of personal computers created the context of e-commerce, in which the core marketing function has acquired new universal characteristics and directions, inducing the development of Internet Marketing as a concept (Watson et al., 2000; Pitt et al., 2002; Ngai, 2003).
The internet is a very important tool for gaining strategic advantages in business the world over. Several hotels have made attempts to capture some of the growth potential of the internet, by creating their websites and are using the internet for various purposes. It is used mostly as a sales and marketing tool. (Murphy et., 1996; Walle 1996)
Internet marketing has been defined in different ways by different authors. According to Ngai, (2003) internet marketing is “The process of building and maintaining customer relationships through online activities to facilitate the exchange of ideas, products, and services that satisfy the goals of both buyers and sellers”
Buhalis, (1998) state that “Marketing on the Web is multidimensional content marketing that requires the following paradigm shifts: from traditional advertising to interactive marketing; and from developing and managing one-way information flows to computer-mediated empowerment of users, consumers, and entrepreneurs who will be engaged in electronic commerce in the information age” According to Laudon & Traver, (2002) “Internet marketing is to use the Web – as well as traditional channels – to develop a positive, long-term relationship with customers (who may be online or offline) and thereby create a competitive advantage for the firm by allowing it to charge a higher price for products and services than its competitors can charge”
Ghana was amongst the first countries in Africa to achieve connection to the internet. The internet was introduced into Ghana in 1998 by NCS Network Computer Systems. Broadband ADSL services were introduced in 2003. In 2004 alone almost 100 new ISPs were licensed bringing the total at the end of that year to more than 140. The rapid growth in this sector in recent years is set to continue.
Table 1.1 Ghana’s Internet Usage and Population Growth
Source: internet world statistics 2010
Ghana can be located in West Africa and attained independence from the British on 6th March 1957. Since then the country has been governed by a mix of military and democratically elected governments. Since 1992, Ghana has pursued its developmental agenda under constitutionally elected governments. It borders Côte d'Ivoire to the west, Burkina Faso to the north, Togo to the east, and the Atlantic Ocean to the south. Accra is the capital and largest city in Ghana.
Hotels have existed and operated in Ghana since independence. Hotels come in a variety of ranges, from low budget to high-end accommodation. Hotel class is essentially a measure of both the quality and the number of services provided by the hotel (Fortanier & van Wijk, 2010).
“A hotel is a commercial establishment providing lodging, meals, and other guest services. In general, to be called a hotel, an establishment must have a minimum of six letting bedrooms, at least three of which must have attached (ensuite) private bathroom facilities.
General (lot. generalis - umumiy, bosh) - qurolli kuchlardagi harbiy unvon (daraja). Dastlab, 16-a.da Fransiyada joriy qilingan. Rossiyada 17-a.ning 2-yarmidan maʼlum. Oʻzbekiston qurolli kuchlarida G.
Although hotels are classified into 'Star' categories (1-Star to 5-Star), there is no standard method of assigning these ratings, and compliance with customary requirements is voluntary” (online Business dictionary, 2011).
In the 1980s until the implementation of the economic recovery programme (ERP) all the big hotels that met international standards belonged to the government of Ghana. Although there were several other hotels operating in the country, most of them were small in size and did not have adequate facilities to meet international standards. During the implementation of the ERP, all the state owned hotels were divested to private individuals. Today the hotel subsector in Ghana is flourishing due to the privatization which took place many years ago. Governmental role in the sector is mainly relegated to policy making and crafting regulatory framework for the sector.
Although the landscape in the hotel subsector has changed with the springing up of many small sized hotels and guest houses there still are only a handful of hotels that meet international standards. New major international luxury hotels are being built or renovated and are mostly concentrated in Accra. These include Hilton, Marriot, Sheraton, Movenpick Hotel and Resort, and Ambassador Hotel (Ashitey, 2008).
United States based New Dawn Resorts (Holder Hospitality Group) is expected to build an international resort complex on a 60-acre stretch of coastline in Accra, including at least four hotels, restaurants, a casino, playgrounds, and other facilities. Holiday Inn was also newly opened in June 2008 and a Golden Tulip hotel was built in Kumasi (Ashitey 2008).
Based on information gathered from Ghana Hotels Association website there are approximately 816 hotels in the country currently.
Table 1.2 Members of Ghana Hotels Association and their location by Regions
REGIONS OF GHANA
NUMBER OF HOTELS
Source: Hotels Association of Ghana website 2011
Tourism has a direct impact on the hotel sector in Ghana. The more tourism activities are patronized the more there is the need for hotel facilities to serve the tourists – restaurants, fitness centre, swimming pools, artifacts shops, guarded packing etc.
According to the GNA, international tourist arrivals in Ghana for 2007 were 587,000 while tourism receipts for the same year amounted to US$908 million. The average annual growth rate between 2000 - 2007 was at 5.7 percent (Daily Graphic, 2010).
Tourist’s average expenditure also rose from 1,125 dollars in 2002 to 2010 dollars in 2008. In 2002, expendable money was 1,125 dollars, in 2003 it was 1,344 dollars, 2004 expendable cash was 1,711 dollars, 2005 expenditure 1,950 dollars, 2006 -1985 dollars and 2007 it was 1,998 dollar whereas 2008 was 2,010 dollars. 146,653 business people arrived during 2007 and in 2008 arrivals were 160,556 (GNA, 2010).
The hotel industry in Ghana is a major beneficiary of the tourist expenditure as captured above. Boarding and lodging form a major part of the expenses borne by the tourist although there are other expenses which are outside the hotel industry.
Tourism is a very important sector to Ghana's economy as emphasized by the Ministry of Tourism. It is the fastest-growing sector of the economy and it is expected to grow at an average rate of 4.1 per cent per annum over the next two decades. Furthermore, it is the fourth highest foreign exchange earner for Ghana - the country earned a total of US$1.3 billion in 2008 as confirmed by a former Minister of Tourism, Mrs. Azumah Mensah in an interview with Ghana News Agency. There are major linkages between the tourism sector and the hotel industry. Normally in all-inclusive package tours more than 80% of travelers’ fees go to the airlines, hotels and other services (Dogbevi, 2010).
According to Luigi Cabrini, Director, Sustainable Development of Tourism of the World Tourism Organization (WTO). Ghana is the third most important tourist destination in West Africa. The San Francisco-based Ethical Traveler listed Ghana as the 4th on its select list of 10 developing countries in 2010 that attract tourists based on ethical values and the country's peaceful and progressive democratic practice also makes the country a tourism destination of choice (Greenwald & Hoover, 2010).
All the positive signs in the tourism sector of the Ghanaian economy have a direct positive impact on the hotel sub-sector. All tourists who travel within the borders of Ghana spend money on one hotel facility or another. As Ghana continues to hold its place among the high ranked preferred destinations, hoteliers stand to benefit. Despite the goodwill that Ghana enjoys as a tourist destination, hoteliers need to market their facilities appropriately by taking advantage of the many technologies that exists – especially the internet. The internet is a major platform for enhancing business processes especially marketing activities.
In Egypt, Syria and Lebanon, which are major tourism destinations in the Arab region, the Internet is used mainly as a marketing tool, mostly for promotional activities by the SMEs (El Said & Hone, 2005).
As competition becomes fierce in the hospitality industry many hotels in Ghana are taking to the internet as a means to facilitate their businesses. However, little is known about the internet marketing strategies being pursued by these hotels.
Currently there is escalating demand for hotels that meet international standards especially in the emerging markets. Furthermore, there is urgent need for players in Ghana to adopt the use of the internet as a comprehensive marketing tool in order to survive ahead of the competition.
The use of ICT and the internet in the hotel industry can be considered a relevant innovation that helps increase the competitiveness of the firms because it facilitates the relationship with customers, through better and easier information flow that helps them evaluate and contract the services (Rohm et al., 2004).
In view of the above, the main problem of this study is; are hotels in Ghana taking full advantage of the opportunities the internet offers to market their facilities and services?
For the above problem, the main purpose of the study is to find out what internet marketing strategies are being pursued by hotels in Ghana.