FACTORS INFLUENCING GROWTH OF SALES IN THE

HOSPITALITY INDUSTRY IN KENYA: A CASE STUDY OF NAIROBI

SERENA HOTEL

KIPKIRUI KORIR

A RESEARCH PROJECTSUBMITTED TO SCHOOL OF

MANAGEMENTAND LEADERSHIPIN PARTIAL FULFILLMENT OF

THE

REQUIREMENT FOR THE AWARD OF A DEGREE OF BACHELOR

OF

MANAGEMENT AND LEADERSHIP FROM THE MANAGEMENT

UNIVERSITY OF AFRICA

SEPTEMBER 2018
 DECLARATION
Declaration by the Student

This project is my original work and has not been presented for a degree in any other University

Signature…………………………… Date ……………………… KIPKIRUI KORIR

BML/13/00484/1/2016

Declaration by the Supervisor

This project has been submitted for examination with my approval as University Supervisor

Signature…………………………… Date ……………………… MR. TOM

KAWINO

DEDICATION
This project is dedicated to my wife Mrs. Janet Korir and Mr. Muthoki Usyu-HR Manager
Serena hotel who have always been there for me. May God accord them good health, joy, peace,
long life and above all, God’s everlasting love.

i
 ACKNOWLEDGEMENT
This research project is a result of support from several sources; first I would like to give praise
and honour to the almighty God for giving me sufficient grace and power to write this project. I
would also like to thank my supervisor Mr. Tom Kawino whose comments and advice have been
very useful to me. Lastly I would like to acknowledge the management of Serena Hotels for
allowing me to conduct my study at their institution and the entity of MUA for the good and
conducive learning environment during my study period thanks a lot and God bless you.

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 ABSTRACT
The purpose of the study was to assess the factors influencing growth of sales in the hospitality
industry in Kenya, while the Specific Objectives are: To establish the effect of advertising on
growth of sales in Serena Hotel; To determine the effect of pricing on growth of sales in Serena
Hotel; To find out the effect of customer service on growth of sales in Serena Hotel; To assess
the effect of competition on growth of sales in Serena Hotel. The significance of the study is to
the Management of Nairobi Serena Hotel and Other Hotels. The study adopted descriptive
research design.The target population of the study was 150 of the employee at the Nairobi
Serena Hotel. The sampling technique used was stratified random sampling. Secondary and
primary data was collected using a self-administered questionnaire. The questionnaire was
piloted in order to check for reliability. Questionnaires was administered through drop and pick
method. The data collected was analysed using various statistical tools and instruments such as,
correlation analysis. The findings obtained revealed that the most adopted penetration strategy
was penetration pricing on services, the most adopted marketing strategy was making hotel
brand visible to the niche market, most adopted product development strategy was existence of
promotion strategies while diversification adopted to the largest extent was maintaining of strong
customer relationship. On the relationship that existed between the study variables, product
development strategies, market development strategies and penetration strategies had a positive
relationship implying that the marketing strategies application positively influenced performance
of hotels. Multiple regression analysis obtained a positive coefficient of correlation implying that
product development strategies, diversification strategies, market development strategies and
penetration strategies had a positive effect on organization performance. The study concluded
that marketing strategies positively affects performance of large hotels in Nairobi.From the
findings, several recommendations are made. To begin with, the performance of the organization
may be determined greatly by the type of marketing strategies employed. The study thus
recommends that the implementation process of these marketing strategies should be given top
priority during the strategy formulation process. Particularly, adequate time and resources should
be allocated in ensuring that the strategies are implemented successfully. Further, the marketing
strategies adoption should be supported by an understanding of the hotel industry structure, the
needs of target customer segments, positional advantages being sought, and trends in the
environment. This will consequently improve on the firm’s market revenue, share and
profitability. Additionally, the organizations should focus more on the practices that are likely to
accrue more benefits. This should therefore go a long way in not only boosting but also
improving the organization performance at large.

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Contents
DECLARATION...................................................................................................................... i

DEDICATION.......................................................................................................................... i

ACKNOWLEDGEMENT....................................................................................................... ii

ABSTRACT........................................................................................................................... iii

LIST OF ACRONYMS AND ABBREVIATIONS.................................................................v

CHAPTER ONE...................................................................................................................... 6

INTRODUCTION OF THE STUDY......................................................................................6

1.0Introduction......................................................................................................................... 6

1.1 Background of the Study.................................................................................................... 6

1.2 Statement of the Problem................................................................................................... 9

1.3 Objectives of the Study.................................................................................................... 10

1.6 Scope of the Study........................................................................................................... 11

1.7Chapter Summary............................................................................................................. 11

CHAPTER TWO........................................................................................................................... 12

LITERATURE REVIEW.............................................................................................................. 12

2.0: Introduction............................................................................................................................. 12

2.2 Empirical Literature Review............................................................................................ 15

2.3 Summary and Research Gap............................................................................................ 29

2.4 Conceptual Framework.................................................................................................... 30

2.5 Operationalization of Variables....................................................................................... 30

2.6 Chapter Summary............................................................................................................ 31

CHAPTER THREE............................................................................................................... 32

RESEARCH DESIGN AND METHODOLOGY..................................................................32

3.0 Introduction...................................................................................................................... 32

3.1 Research Design............................................................................................................... 32

3.3 Target Population............................................................................................................. 32

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 3.4 Sample and Sampling Technique..................................................................................... 33

3.4 Instruments....................................................................................................................... 33

3.5 Pilot Study........................................................................................................................ 34

3.6 Data Collection Procedure....................................................................................................... 34

3.7 Data Analysis and Presentation................................................................................................ 35

3.8 Ethical Considerations............................................................................................................. 35

3.9 Chapter Summary.................................................................................................................... 36

CHAPTER FOUR.......................................................................................................................... 37

DATA ANALYSIS AND INTERPRETATION OF FINDINGS..................................................37

4.0 Introduction.............................................................................................................................. 37

4.1 Presentation of Research Findings........................................................................................... 37

4.1.1 Response Rate................................................................................................................... 37

4.2 Limitations of Study................................................................................................................ 49

4.3 Chapter Summary.................................................................................................................... 50

CHAPTER FIVE........................................................................................................................... 50

SUMMARY, RECOMMENDATIONS AND CONCLUSIONS..................................................50

5.0 Introduction.............................................................................................................................. 50

5.1 Summary of Findings............................................................................................................... 50

5.2 Conclusion............................................................................................................................... 53

5.4 Suggestions for Further Research............................................................................................ 54

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LIST OF ACRONYMS AND ABBREVIATIONS

ACIAS Adequate and Competent Internal Audit Staff

AIAC Approved Internal Audit Charter
CFIA Competency Framework for Internal Auditing
IAE Internal Audit Effectiveness
IIA Institute of internal auditors
IA Internal Auditors
MoFED Ministry of employee competence and Economic
Development
MS Management Support
MP Management perception
OLS Ordinary Least Square

OIN Organizational Independence

OAG Office of the Audit General

SAP Statement on Auditing Practice
SPSS Statistical Package for Social Science
3Es Effective, Efficient and Economical

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 CHAPTER ONE
INTRODUCTION OF THE STUDY
1.0Introduction
This study covered investigation on the factors affecting growth of sales in the
hospitality industry in Kenya with reference to Nairobi Serena. This chapter consists
of six sections .i.e. the background of the study, statement of the problem, objectives
of the study, research questions, and significance of the study and the scope of
study.

1.1 Background of the Study

All organizations, hotels included require sales strategies to thrive and remain
competitive in their industries. Considering the dynamic nature of the hospitality
industry, various hotels ought to change their sales strategies quite often to cope
with the changing needs in the market and also remain ahead of competition (Kotler
2000). To attain a sustainable competitive edge, an organization needs to identify its
main strength and position itself in such a manner that is above competition in that
segment (Johnson & Scholes, 2002). So as to create a distinct competitive advantage
over rivals, a firm must select right combination of target markets and sales mix.
Hotels continually seek new ways to acquire, retain and increase business, because
the cost of losing customers is rising. Service is an important factor in retaining
clients. The role of service is more important than ever, and is expected to become
even more critical with time (Choi & Chu, 2011). Hotels that have the ability to
attract, satisfy and thus retain customers are more likely to survive than hotels that
do not do so. Successful customer retention allows the hotel to build relationships
with its customers.

It is very difficult for a business organization to survive and remain competitive in a

dynamic market without injecting various sales strategies to its operations. In this
study, Ansoff growth matrix Model and sales mix strategies shall illustrate the effect
of sales to performance of hotel business organizations. Performance of hotels in
Kenya has been seen to deteriorate in the past few years as evidenced by a number
having to even close down (Najib, et al, 2016). This raises much concern because
tourism contributes largely to Kenyan economy and if the hotels hosting these
tourists do not perform well as expected, the tourism contribution to GDP ultimately
gets affected. Particularly, the recent experienced insecurities in Kenya have geared
the performance of the hotels to the worst. Though measures to improve the security

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in the hotels have been put in place e.g. hotels like Intercontinental and Kempinski
have sniffer dogs at security check points, the tourist levels still remain low. This is
attributed greatly to uncertain situations that had been created by the insecurities,
leading to travel advisories being put across last year 2015 that led to travel
cancellation of most of the tourists from other countries. Hence managers have been
necessitated to come up with new strategies to ensure thriving of their hotels.

Sales strategies in a business acts as key to the business growth and to the customers
satisfaction in terms of achievement made by the organization. The environmental
forces which affect the business in attaining its needs require to be detected in
advance and handled well to enable the business to meet its vision and mission.
Strategies of organizations enable evaluation of the long and short term goals thus
making it possible to achieve the objectives in specified period. A Business or firm
should have a unique strategy for effective competitiveness, growth and profitability
of the business.

Sales department should be updated with recent information; thus should be active
(Cohen, 2011). The organization or firm should be in a position to establish a sales
framework for easier accessibility of frequently updated websites, announcements,
sales presentations, and all other promotional materials. The frequent updates enable
the organization in quick and easy development in different departments which
makes it expand more to the international business, Sales framework is very
essential to the business sector as it gives the continuous flow of the business
information daily, monthly, and yearly. Sales strategy is a method of directing an
organization's energies and resources on a course of action which can lead to
increased sales and dominance of a targeted market niche. A sales strategy combines
product development, promotion, distribution, pricing, relationship management and
other elements (Hose, 2011). These strategies identify the firm’s sales goals, and
explain how they was achieved, ideally within a stated timeframe. Sales strategy
determines the choice of target market segments, positioning, sales mix, and
allocation of resources.

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 1.2.1Profile of the Nairobi Serena Hotel
Serena hotels and lodges is owned and operated by the Aga Khan fund for economic
development when the Tourist Promotion Services (TPS) Serena groups was
established in the mid 70s the aim was simple but challenging to become the
leading group in East Africa. Today this goal has been made a reality giving the
Serena hotels an international recognition as a clear market leader offering the
highest standards services in establishing a unique design in prime location
throughout the region. The key aim of the Serena hotels is to assist developing
countries to expand their economies and maintain a development philosophy
focusing on the creation of local employment, design operation paying attribute to
the environment.

The Nairobi Serena hotel in particular is a member of the prestigious hotels of the
world while Zanzibar Serena inn and Kinawira camp are members of small luxury
hotels of the world. Serena has the distinction of being the only purpose built
hospitality network in East Africa and a massive investment programme has ensured
that the group properties offers unveiling standards and facilities. Each property is
enhanced by its unique surrounding and expands horizons for travelers while
respecting local ways of life.

Serena hotel being an ecotourism pioneer, has a mandate of initiating important

environmental programs to protect the continent’s wildlife and fragile habitants,
focusing on smaller, high quality wildlife experiences, Serena promotes sustainably
designed lodges prides itself on good care of wildlife, and people. Its corporate
environmental mission statement states, “we are committed to developing project
that play the highest regards to environmental concern in design planning
construction and operation.

Nairobi Serena hotel was started in 1975; it was officially opened on 1 st February
1976. The hotel is located at the Uhuru Park along Kenyatta Avenue for its
standards of products and services and it’s a member of the leading hotels of the
world. The hotel has conference facilities that can match everyone needs. The
biggest has a capacity of upto 1000 people depending on the setting, other rooms are
Amani, Lantana, Amani and Bambara lounge. There are 183 air conditioned

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bedrooms, 15 suites. Apart from its renowned health club, the hotel has a fantastic
pool. Excursions on offer include game viewing at Serena main safari hotels, visit to
dance and cultural centers. For business travelers the hotel offers a full conference
facilities and a business center with a good well established good customer care
relations.

The guest rooms includes; the standard deluxe rooms which have the most modern
amenities with both executive business traveler in mind. Each of this room is
equipped with an electronic safe minibar, hair dryer, telephone, writing desk. A
hotel courtesy bus operates from Monday to Saturday between the hotel and central
business. Nairobi Serena hotel has unique facilities as borehole and 24 hour
automatic power generator to curb customer’s inconvenience.

1.2 Statement of the Problem

Service Sector forms substantial contribution to Kenyan GDP; about 53.3% as per
2013 Global finance report. Hospitality sector where hotels fall forms a significant
portion of this contribution. In the past couple of years we have affirmed a
significant drop in performance of this sector. There are a number of reasons behind
this mainly; Weak sales strategies adopted by different hotel chains and high level
of insecurity in the country majorly caused by terror attacks. Hotels in Kenya
operate in a dynamic business environment characterized by intense Competition for
resources and market share hence have become more challenging to manage and
sustain their growth rate. Kamau (2008) stated that the Kenya tourism sector which
hotels in Kenya depend on has been facing numerous challenges which have posed a
threat to their survival and growth. These challenges include competition for
resources, skilled labour and market share, socio-cultural changes, technological
changes, economic challenges, changes in Customers’ expectation and preferences
and insecurity due to terrorism an issue that has become major in recent years. The
dynamism of this environment calls for appropriate growth strategies that will
enhance good performance.

Related studies have been done on sales strategies and the performance of
organizations. To begin with, internationally, various researchers have conducted on
the role of strategy in competing successfully with other hotels such as Enz (2011).
McCarthy (2000) in a study on strategies of hotels in USA argued on the

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achievement and growth of organization using Ansoff’s growth strategy. Other
researchers locally, Magunga (2010) in his study on the effects of sales strategies on
performance of
Insurance Industries in Kenya. He further argues that the major contributors to the
sector performance are the sales strategies adopted by insurance companies.
Similarly, Ayele (2012) and Richard (2013) also conducted studies on strategies
adopted to gain competitive advantage. They established differentiation and market
development strategies to be used more.

Though various studies have been conducted in the sector, the available theory is not
sufficient enough in explaining the impact the sales strategies have on the
performance of the organizations. This study will aim to shed more light into this
and aim to answer the research question; what is the relationship between sales
strategies and performance of the Nairobi Serena hotels in Kenya?

1.3 Objectives of the Study

1.3.1 General Objective
The Main objective of the study was to assess the factors influencing growth of sales
in the hospitality industry in Kenya
1.3.2 Specific Objectives
i. To establish the effect of advertising on growth of sales in Serena Hotel.

ii. To determine the effect of pricing on growth of sales in Serena Hotel.

iii. To find out the effect of employee skill on growth of sales in Serena Hotel.

iv. To assess the effect of competition on growth of sales in Serena Hotel.

1.4 Research Questions

i. How does advertising affect growth of sales in Serena Hotel?

ii. To what extent does pricing affect growth of sales in Serena Hotel?

iii. To what extent does customer service affect growth of sales in Serena
Hotel?

iv. How does competition affect growth of sales in Serena Hotel?

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1.5 Significance of the Study
1.5.1 Management of Nairobi Serena Hotel
The management of Serena Hotel can use the recommendations of this study in their
day to day activities which are geared towards improving sales. The
recommendations in this study are considered useful and therefore can be used to
reform various functions within this organization to improve their dominance in the
hospitality industry.

1.5.2 Other Hotels

This study can also be useful to upcoming hotels that have not found proper footing
in hotel business. They can use various contributions from respondents detailing
proper approach by which sales can be improved to attain maximum growth.

1.6 Scope of the Study

The study will focus on factors affecting the growth of sales in the hospitality
industry in Kenya. The researcher chose to do a case study of the Serena Hotel in
Nairobi City. The study was targeting 143 staff at the Serena Hotel in Nairobi
City. Management and staff was the main target in the study. This study was
conducted for five months from May 2018 to September 2018.

1.7Chapter Summary
This chapter contained the background of the study on the general understanding of
growth of sales in the hospitality industry in Kenya. The chapter also covered the
statement of the problem, objectives of the study, research questions, and
significance of the study and scope of the study.

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 CHAPTER TWO
LITERATURE REVIEW

2.0: Introduction
This chapter discusses the theoretical review, the empirical literature review, the
summary and research gaps to be filed by the study and the conceptual framework,
the operationalization of variables and the chapter summary.

2.1: Theoretical Literature Review

2.1.1 The Universal Perspective theory
According to (Pearce, 2008)the universal perspective has been used previously to
give an explanation for the link among HR Management and firm performance
(Delery&Dorty, 2009). The perspective appreciates the price of HR in attaining
sustainable advantage (Pfeffer, 1994). The perspective also acknowledges that the
fee of HR may be carried out through the adoption and implementation of a
particular set of HRM practices within the organization. The regularly occurring
attitude implies a right away courting among a specific HRM method and overall
performance, also called ‘pleasant practices’ or the main outcomes. Implicitly, the
widespread angle provides a prescription of HR practices that are taken into
consideration to offer superior performance the nature of the enterprise or region
however. The first practice, internal profession possibilities, refers to recruitment of
personnel from inside (inner labor market). The second one practice is great
schooling and development of employees. Some corporations opt for obtaining fully
trained employees but others recruit personnel to educate them on the activity. An
appraisal may be behavior or end result primarily based.

Behaviour-based appraisals focus at the behaviors of character vital to carry out the
job successfully, at the same time as results-oriented value determinations
recognition on the outcomes of these behaviours. Fourth, income-sharing plans can
also tie pay to company overall performance. Fifth the ranges to which employees
are given employment safety, both everlasting and pensionable or brief/contractual

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employment. Sixth, voice mechanisms, formal criticism systems and participation in
choice making. In the end, the degree to which jobs are tightly or narrowly
described. Tightly described jobs are the ones for which personnel understand the
contents in their jobs. Such jobs are restricted in scope and incumbents do not
perform obligations out of doors job. The ‘first-class practices’ prescription makes
the familiar attitude inflexible and insensitive to the needs of the changing business
environment (Chen, 2011). This theory provides a speculation on the relationship
between hotels (lodge) overall performance and the way the employee at once
influences into it.

2.1.2 Ansoff Growth Model

This matrix provides a simple way of generating four basic alternative directions for
strategic development. This model explicitly considers growth options and an
organization basically has a choice between penetrating still further within its
existing market, develop new product for existing markets or take its existing
products into new markets or full diversification by taking new products to new
markets. The model provides strategic guidelines that can assist firms identify their
future strategic growth direction and is used when firms are planning for growth.
Ansoff presented a matrix that focused on the firm’s present and potential products
and market (consumers). In this model, potential areas where competencies and
generic strategies can be adopted are provided in four broad alternatives; market
penetration, market development, product development and diversification

Market penetration is where an organization decided to take an increasing share of

its existing markets with its existing product range while product development is
where organization delivers modified or new products to existing markets. On the
other hand market development is where existing products are offered in new
markets while diversification is a strategy that takes an organization away from both
its existing markets and its existing products. A firm can use market penetration to
develop the market with current products. Market penetration in existing markets
aims at encouraging current customers to use more of the current product, to use it
more often, or to use it in new ways. According to Walker et al (1999) penetration
can be achieved through the following two possible strategic objectives: To increase
the customers’ awareness by means of heavy advertising, extensive sales force

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efforts, extensive introductory sales promotions, quick expanding of offerings and
free trial offers. To increase the customers’ ability to buy by means of penetration
pricing, extended credit terms, heavy use of trade promotions and the offering of
engineering, installation and training services.

Through product development, organizations’ can grow by developing new product

line extensions or by means of new product offerings. New products can also be
called innovations. An innovation or innovative product is a product perceived as
new by a potential consumer (Lamb et al, 2000). Existing products can be changed
by means of product modification or current packaging may be changed. Potential
consumers will regard such product as new and different from the existing product.
Market development is a growth strategy where a new market is entered by an
existing product dealing with the ways in which consumers become aware of, test
and eventually accept or reject a new product item. The primary objective of market
development is to secure future volume and profit growth (Walker et al, 1999).

This objective has become even more important in recent years due to the rapid
advancement in technology and more intense competition globally. A steady flow of
new products and services and the development of markets, including those in
foreign countries, are essential for the continued growth of most organizations. The
marketing function plays a pivotal role in the development of the market by means
of speeding up innovations, and by utilizing marketing strategies during the different
product life cycle phases. Chances for new market entry success by using current
products are dependent upon the management of the new product development
process (Jenkins, Forbes, Duranni and Banerjee, 1997). Organizations can develop
markets and seek growth by diversifying their operations. Diversification is
typically more risky or it involves learning new operations and dealing with
unfamiliar customer groups. According to Walker et al (1999) diversification can
happen through: Vertical or horizontal integration and related or unrelated
diversification.

2.1.3 Resource-Based View/theory (RBV)

The RBV states that a firm develops aggressive benefit by way of not handiest
obtaining but also growing, combining, and efficaciously deploying its physical,
human, and organizational assets in methods that upload unique cost and are hard

15
for competition to imitate (Barney, 1991). The RBV indicates that companies should
look internally to their assets, each bodily and highbrow, for resources of
competitive benefit. The resource-primarily based view has grow to be the
fundamental theoretical foundation on which an awful lot of the modern-day
strategic and employer overall performance management studies concerning
knowledge-based totally views of the firm (supply, 2016), human capital ((Hitt,
2001), and dynamic capabilities are derived. In fact, Priem, & Butler, (2012)
mapped RBV research against eighteen strategy research topics, demonstrating the
breadth of its diffusion in the strategic control area (Allen, 2007). Regardless of the
huge recognition of the RBV, it isn't always without grievance. (Butler, 2001) Have
suggested that the RBV does now not represent a true concept,their argument
focuses by and large on basic troubles. First, they endorse that the RBV is basically
tautological–that its primary assertions are genuine via definition and, as a
consequence, not subject to empirical verification. In different words, without
definitional dependence (i.e. ‘precious assets’) the diametrical statement – that
precise companies own competitive advantage – does now not logically observe.

2.2 Empirical Literature Review

2.2.2 Advertising on growth of sales

Promotion strategies are concerned with the planning, implementation, and control
of persuasive communication with customers. These strategies may be designed
around advertising, personal selling, sales promotion, or any combination of all
these. Kotler etal (2006) advices of well laid objectives and a sharp focus on target
customers are necessary for an effective promotional program. An integrated
communication plan consisting of various promotion methods should be designed to
ensure that customers in a product/market cluster get the right message and maintain
a long-term cordial relationship with an organization. Promotional perspectives must
also be properly matched with product, price, and distribution perspectives.
Strategies for development of promotional strategies include promotional
expenditure strategy. Practitioners have developed rules of thumb for determining
promotion expenditures that are strategically sound: either takes the form of a
breakdown method or they employ the buildup method. Another approach regards
marketing mix factor; the promotion decision should be made in the context of other
aspects of the marketing mix (Porter, 1976).

16
The price and quality of a product relative to competition affect the nature of its
promotional perspectives. Higher prices must be justified to the consumer by actual
or presumed product Superiority. Thus, in the case of a product that is priced
substantially higher than competing goods, advertising achieves significance in
communicating and establishing the product’s superior quality in the minds of
customers. An empirical study on this topic has shown that consumers prefer
incentives other than price. Price cuts also appear to have little lasting effect on sales
volumes.

Gibson (1991) talks of advertising strategies being concerned with communication

transmitted through the mass media. Promotional mix strategy involves
determination of a judicious mix of different types of promotion. Its objective is to
adequately blend the three types of promotion to complement each other for a
balanced promotional perspective. Media selection strategy entails choosing the
channels (newspapers, magazines, television, radio, outdoor advertising, transit
advertising, and direct mail) through which messages concerning a product/service
are transmitted to the targets.

The relationship between advertising strategies and organization performance can be

described by the four P’s of advertising. Some scholars argued that a firm pursuing
product adaptation strategy in a global market achieves increased sales performance
(Leonidou et al, 2002). An empirical study conducted by Cavusgil and Zou, (2014)
validated that product adaptation is not only linked to sales growth but financial
performance of companies such as profitability and return on investment. Product
adaptation as a global advertising strategy therefore positively affects overall
business performance. It is therefore suitable strategy toward market responsiveness
as it offers the development of new products that meet the needs of a changing
marketplace. There is a strong positive link between pricing and firm’s performance.
Pricing strategy may vary market to market because of many reasons associated
with the PESTEL model such as political, economic, social, technological,
environmental and legal forces. However, the argument is valid to the extent that
pricing strategy success is measured in terms of proportion of sales and profit level,
and customer satisfaction.

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Sales, financial and customer performance is achieved through promotional mix by
gaining experience in the opportunities and problems arising in specific markets,
boosting communication, personalizing relationships, and cultivating a team spirit
with customers, and providing timely response and immediate support to the various
needs (Kaynak and Kothari, 2014). The six related promotional mix is advertising;
sales promotion, personal selling, trade fairs, personal visits, and promotion
adaptation were found to be positively linked to firm performance (Styles and
Ambler, 2014). With sound advertising procedures, the firm can communicate
information, constantly remind, and persuade customers to buy the products and,
therefore, generate more sales. The study results by Cateora and Graham, (1999)
verified that advertising positively influence sales performance and other
organization performance greater than other promotional mix variables.

Distribution strategy carries a critical role in dealing with delivery time that
influences the performance of the firm. The effectiveness and efficiency in the
delivery time of the products constitutes a key to total firm performance in the
market as it affects the firm's operations in terms of competitiveness and success
(Piercy et al., 1997). The results of the study by Keegan, (1995) exhibited a positive
correlation between distribution channel and sales performance. In addition,
significant findings on delivery time which is a result of distribution structures put
in place by a firm were also observed to be related to sales volume, proportion of
sales, and certain composite performance measures. Many studies are in support of
distribution adaptation toward achieving and improving firm performance.

Various studies have been conducted trying to establish the relationship that exists
between advertising strategies and performance of organizations. To begin with, the
study by Zott & Amit (2007) examined the fit between a firm’s product market
strategy and its business model. The study manually collected dataset and found that
novelty-centered business models—coupled with product market strategies that
emphasize differentiation, cost leadership, or early market entry—can enhance firm
performance. Data suggested that business model and product market strategy are
complements, not substitutes. The study was however limited in addressing how
business models evolve and in particular how they co-evolve with the product
market strategy of the firm. Arasa, and Gathinji, (2014) conducted a study to
determine link between competitive strategies and organizational performance

18
among firms in the mobile telecommunications industry in Kenya. The study
identified the competitive strategies adopted by firms in the industry in Kenya,
assessed the different levels of implementation of competitive strategies within the
firms and examined the relationship between these strategies and firm performance.
The research revealed that competition is high in the industry and product
differentiation and low cost leadership are the most commonly used strategies. Other
strategies include strategic alliance strategies and specific market focus strategies.
The study concludes that the strategies adopted improve the overall firm
performance. The key performance indicators influenced by these strategies include
sales and market share, customer retention, profitability and product innovation.

Ge and Ding, (2011) conducted a study on manufacturing firms in China and

evidence found that the three dimensions of market orientation exert different
effects on competitive strategy and performance. Among them, customer orientation
has the strongest association with competitive strategy and market performance. The
results of structural equation analyses indicated that the mediating effect of
competitive strategy is mainly revealed in innovation strategy, the most vital factor
in creating superior value for the company in the emerging market. Njeri et al,
(2015) investigated the advertising strategies and competitiveness of four and five
star hotels in Kenya. A comprehensive view of the advertising strategies of the
hotels was provided by mapping out the place, product, pricing, people and
promotion strategies. Clear links were also established between these strategies and
the hotels’ competitiveness. Dzisi and Ofosu (2015) investigated the effect of
advertising strategies on the performance of SMEs in Ghana in terms of their
profitability, brand awareness and market share. The overall results of this study
suggest that strategic advertising are drivers of organizational positioning in a
dynamic environment, and that it helps to enhance the development of new
product/service for existing markets. Results of the study also reveal that the SMEs
in Ghana mostly use traditional form of advertising to reach potential customers
and also to entrench their brands.

Marketing is a continually evolving discipline and as such can be one that

companies find themselves left very much behind the competition if they stand still
for too long. One example of this evolution has been the fundamental changes to the
basic Marketing mix. Where once there were 4 P’s to explain the mix, nowadays it

19
is more commonly accepted that a more developed 7 P’s adds a much needed
additional layer of depth to the Marketing Mix with some theorists even going
further. McCarthy (1960) explains Marketing Mix as a tool used by businesses and
Marketers to help determine a product or brands offering. He reduced the marketing
mix into four elements namely product, price, place and promotion. In the late 70’s
it was widely acknowledged by Marketers that the Marketing Mix should be
updated. This led to the creation of the Extended Marketing Mix by Booms & Bitner
(1981) which added 3 new elements to the 4 P’s Principle. This now allowed the
extended Marketing Mix to include products that are services and not just physical
things. They include, People, Processes and Physical evidence.

2.2.2Pricing on growth of sales

Of all the aspects of the marketing mix, price is the one, which creates sales revenue
all the others are costs. The price of an item is clearly an important determinant of
the value of sales made. In theory, price is really determined by the discovery of
what customers perceive is the value of the item on sale. Researching consumers'
opinions about pricing is important as it indicates how they value what they are
looking for as well as what they want to pay. An organization’s pricing policy will
vary according to time and circumstances. Price Theory is concerned not with
economic problems in the abstract, but with how a particular society solves its
economic problems. Philip (1776) describes that it is also concerned with explaining
economic activity in terms of the creation and transfer of value, which includes the
trade of goods and services between different economic agents. A puzzling question
addressed by price theory is for example: why is water so cheap and diamonds are
so expensive even though water is critical for survival and diamonds are not.

Milton (2007) explains that in economics, the major division is between monetary
theory and price theory. Monetary theory deals with the level of prices in general,
with repeated and other fluctuations in total output, total employment, and the like.
Price theory deals with the allocation of resources among different uses, the price of
one item relative to another. Prices do three kinds of things. They transmit
information, they provide an incentive to users of resources to be guided by this
information, and they provide an incentive to owners of resources to follow this
information. Milton Friedman's classic book provides the theoretical underpinning

20
for and understanding of prices. Roughly a fifth of the cost of a product goes on
getting it to the customer though figures vary widely from product to product

When suggesting that people may judge quality by price, Scitovsky (2014) pointed
out that such behavior is not irrational; it simply reflects a belief that the forces of
supply and demand would lead to a "natural" ordering of products on a price scale,
leading to a strong positive relationship between price and product quality.
Empirical attempts to verify this strong actual correlation have concluded that,
generally, there is a positive correlation; however, though statistically significant,
this correlation varies considerably across product-markets, producing an average
correlation (Tellis and Wernerfelt 2015).

Pricing is the measure of what must be exchanged in order to obtain a particular

product or service. Pricing goes by many other names; rent fees, fare, interest,
premium, salary and even wages. All this name add up to one thing; what a
customer’s pays for a product or a service. In good marketing of an organization is
to know what competitors charge when the competitors’ information Pricings are
available. This is not necessarily benchmarking Pricings with those of the
competitors. The marketing manager may decide to his Pricings lower or higher
than competitors by a certain percentage. The important feature of this pricing
method is that the hotel tries to maintain a rigid relation between its Pricings and its
costs or demand. The hotel will change theirs even if it’s own costs have not altered.
Kibera (2014)

According to Vernon R. Stauble (2014), pricing is an ethical concern, particularly

when Pricing is set at a higher level in order to suggest higher quality. This stems
from customers perceptions that higher quality is associated with higher Pricings.
Raised Pricing can affect customers buying decisions, sending customers the
messages that they can expect to get more for the money, since they are paying
higher Pricings. This is not always true even though there is some truth saying “You
get what you paid for”. Customers react negatively to unethical attempts that use
pricing to mislead them. To prevent this from happening honest pricing should be
used to reflect the benefits available in satisfying customers’ requirements. He also
stressed that customers are always interested in getting bargains but do not like
sacrificing quality for the Pricing. When the initial Pricing of a service or a product

21
is set low could convey to the buyer that the product or the service must be inferior.
The customers’ decisions are perceived according to the value of the offer and what
they are willing to pay. Therefore, involvement of customers in cases of best
discounts is essential. However, lower Pricings lower than competitors Pricings may
lead to customers doubting the value but also it might seem to be a better value or
perceived as of less quality.

Kottler (2013) stresses that a hotel must set its Pricings in relation to the value
perceived and delivered to the customer. He says a hotel must set a Pricing for the
first time when it develops a new service or a product. And when is put into
practice, a hotel has to consider several factors namely; selecting the Pricing,
objectives of the Pricing, competitors cost and consumer assessment. He further
stresses that the Pricing decisions are subject to arrangement of complex
environment and competitive forces. A hotel set a not just a single Pricing but sets a
pricing structure that covers various items in its line. Pricing changes as product and
services advances and the hotel adjust the Pricing according to the demand and to
account for variation in buyer’s situation (customer). Customers will base their
judgment of a service or a products value with the Pricings charged. These have a
great impact on customer pricing sensitivity. Customers were more sensitive if they
see few differences between competing services or products. Customers will go for
services which costs least. Product and service comparisons help customers to assess
the value of different options and to decide what Pricings they are willing to pay.
Customers were more Pricings sensitive if they can easily switch to an alternative
service which satisfies them. Therefore, the firms in the hotel industry should
consider and be certain to give customers superior value for that considerable
Pricing.

Harper (2015), Pricing can be used as a tool to induce customers to acknowledge

additional points of differentiation. Pricing can be an indicator of quality of a
product or a service and also assist a hotel to gain a sales growth in the hotel
industry in that; the low pricing will attract and induce customers to purchase the
hotel product and higher Pricings will create quality image. There has been a
difficult in applying the basic pricing theory in practice though it serves as a useful
starting point. The theory states that the hotel should seek the Pricing which
maximizes profits and will thereby obtain the most efficient use of the economic

22
resources held by the firm. By applying this theory it will mean that a hotel pursues
selling concept rather than marketing concept that aims at satisfying customer needs
and wants efficiently and profitably.

The pricing of a product plays two major roles in market. Pricing firstly influence
how much of a product consumers or buyers purchase. Generally speaking potential
customers look for a Pricing that reflects the benefits they think they will receive
from the product. They also consider Pricing of a product relative to that of
competitive offering. Pricing secondly, the Pricing was profitable to the marketer or
the seller or in the case of non-profit making organizations, whether enough money
was raised to enable the organization to carry out its tasks. These two roles make
setting of Pricing of a product one of the most important marketing decisions.
Strydom and Cant (2014)

The consumer/ customer plans for a product or a service he / she is willing tro buy
and judges the Pricings comparatively with reference Pricings in order to determine
whether the Pricing is acceptable or not ( Alvarez and Casiellles, 2014). They also
said that a result of consumer comparison between the Pricings and the reference
Pricings. The consumer perceives gain when the preference Pricing is higher than
the observed Pricing and if the observed Pricing is higher than the reference pricing
the customer experiences a loss. The more the quality of the product/ service
possesses the more the utility it contains and the more pricing should be in the
market. Pricing is also the process of determining what a hotel will receive in
exchanged for its products and services. Pricing is also an indicator of quality
participating for the first time buyer and while remains so subsequent purchases are
more concerned with judgment of value for money. Many companies stress on low
Pricings and discounts in their advertising to capture the interest of Pricing-
conscious customers. Christopher Groening (2011) contends that improving
customer satisfaction is the better way to drive sales. Customers who are satisfied
are more likely to spread the word,’ come back for one more time and pay for
quality products and services.

According to J Paul Peter (2014), pricing decisions concern primarily the nature of
the target market and expected reactions of a customer to given Pricing or changes
in Pricing. Buyer subjective perceptions of Pricing concluded that very little is

23
known about how Pricings affect buyers’ perceptions of alternative purchase offers
and how these perceptions affect purchase response. However, some tentative
generalization about how buyers perceive Pricing has formulated. For example,
research has found out that person who chooses high Pricing items usually perceive
large quality variations within product quality and person who select low Pricing
items usually perceive small variations. Therefore, when setting pricing objectives
and developing pricing strategies, it is worth the effort to do pricing research to see
what Pricings the customers are willing to pay.

2.2.3Employee Skill on growth of sales

Researchers have emphasized the importance of the ability to identify skills,

knowledge factors and competencies required by personnel as they attempt to ensure
their firm’s competitiveness and success in today’s fast-changing business
environment (Chung-Herrera, Enz, & Lankau, 2014; Kay &Moncarz, 2004).
Personnel employed in the hospitality sector, due to the nature of the industry have
to possess a variety of skills. They also tend to be more inclined to value work
enjoyment (Brauer &Leischning , 2016). In today’s global economic setting of
dynamic changes and increased competition, it is important for hospitality students,
educators and managers to understand the competencies needed for success by
tomorrow’s industry leaders (Tomatzky & Klein, 1982).

Organizations should find efficient ways to assign workers to jobs (Brilon, 2015). In
most organizations, the performance of a worker depends on many things, such as
one’s expertise level, one’s concentration and organizational capacity, as well as
one’s analytical and communication skills. As workers move up in the pecking order
or switch jobs, the relative importance of each of these skills changes. Yet,
organizations frequently can only detect a collective performance measure on which
to base their decisions when deciding on promotions or allocating tasks. Therefore,
presented with such a scenario, only specific workers should get reassigned or
promoted and performance in one job may act as an indicator for performance in
another job (Brilon, 2015).

In order to allocate tasks or decide on promotions, organizations need to concentrate

on learning the skill portfolio of its employees. Organizations also need to abstract
from any considerations concerning wage costs or workers' incentives and instead,

24
focus on the task assignment problem when workers vary in their skill levels where
different tasks require different combinations of skills (Gathmann & Schonberg,
2010). This allows the organization to focus optimal assignment rules for workers
and how different jobs should be categorized within a job hierarchy or rotation
scheme.

Waldman (2014) and Bernhardt (1995) assume that the ability of a worker is
observed only by his present employer, but not by potential competitors. As
Waldman (2014) has revealed, competition for highly skilled employees then may
lead to an inefficient assignment of workers to jobs since firms was unwilling to
disclose confidential details about the worker's ability by promoting them. As
discussed in Bernhardt (1995), this may assist in giving an explanation on a given
number of observations typically made in the labor market. Overall, organizations'
unwillingness to promote will intensify the greater the discrepancy between their
private and the publicly available data on an employee, as shown by his schooling
and past promotion path.

Similar to Waldman and Bernhardt (Waldman, 2014; Bernhardt, 1995), most

research on job assignment assume that workers' abilities vary along a unitary
dimension (“universal ability”) but do not contemplate that employees may possess
many skills that matter for their performance. Others note that employees may have
relative advantage in one task. By considering several skills, organizations can
capitalize on the concept of task-specific skills introduced by Gibbons & Waldman
(2004; 2006).

Lazear (2009) proposes a prototype with two abilities that are utilized with varying
intensity in different organizations, thus reassessing the denotation of firm-specific
skills. Gathmann and Schonberg (2010) analyze empirically to what extent skills are
transferable across jobs, the fundamental idea being that different professions
combine tasks and thus task-specific skills in different ways. They utilize the notion
that workers have numerous skills and that their skill profile matters for their
performance in different tasks. They then derive conditions under which employers
prefer to recruit workers within the same organization and this can either work in
favor or against the performance of a hotel.

25
There are numerous empirical proofs that organizations indeed tend to hire
internally, as shown by Agrawal et al., (2006), DeVaro and Morita (2009), and
Lauterbach et al., (1999). Theoretical literature has proposed several justifications
for this occurrence. For example, Chan (2016) emphasizes the enticements
generated through promotions as a cause for restraining external hiring which would
reduce the chances of promotion of current employees. Another explanation is
provided by Greenwald (1986), who recommends a model where employers prefer
internal hiring since they are conversant with the skill of workers they have
employed for one period.

Demougin and Siow (2014) demonstrate that, with mounting hiring expenses,
organizations may opt to train and screen workers themselves. However it is
sufficient that the company has marginally better data about current employees
compared to new ones. Employer learning is also considered in Meyer (1991) who
proposes bias competitions amongst workers in order to have more understanding
about their respective abilities. The author mentions the possibility of producing a
bias through task differentiation. But the notion is selected by Carrillo (2014) who
evaluates how work assignment can be used as a screening device.

In Fairburn & Malcomson (2011), rewarding workers for good achievement is

deputized to managers who are bound to yield and be influenced by activities of
employees. The use of promotions instead of bonus payments assists in mitigating
this problem. However, if workers are without any risk, promotion choices may be
distorted and result in inefficient assignments. In particular, the performance
magnitude for promotion may be reduced and too many employees was promoted.
Koch & Nafziger (2012) have a similar result. In their model, the chances that little
effort leads to greater output decreases as employees move up in the hierarchy.

Higher level jobs are more enlightening about employees' effort, thus decreasing the
cost of incentives. This may outweigh the cost of a lesser success chance that a
wrong assignment of the agent could have. As a result, the principal lowers the
promotion threshold. Lazear (2004), conversely, expounds on the Peter Principle as
the outcome of a statistical process that displays regression to the mean: A worker
benefiting from a high temporary productivity shock will have higher yield and be
more likely to become promoted. Nevertheless, over time, his productivity will

26
return to its average value, therefore giving the impression that the employee's
output fell after promotion which was tied to how the organization performs as
whole.

Mounting competition amongst regions and cities in an information economy has

turned skills and creativity into a much sought-after strategy for progression in
tourism and hospitality. Increasingly inventive content has made its way into
hospitality and tourism products, consequently transforming tourism and hospitality
into an innovative arena(Richards, 2011). Most notably, creativity and skills have
given providers of hospitality and operators in the tourism sector with a business
antidote to deal with intense competition coming up from mass tourism, a type of
tourism that encompasses the transport of large groups of people in a short period of
time to places of leisure interest. Multivariate Skills and Employee Work
Assignment have a positive association with organization performance. Personnel in
the hospitality industry are usually required to have customer relation skills together
with work related skills in order to do their duties effectively(Suh, West, & Shin,
2012).

Happy employees are a major source of competitive advantage. Brauer and

Leischning (2016)tested whether a balance of challenges and abilities at advanced
levels of underlying components is essential and/or sufficient for work enjoyment in
hotels in America. The results of this fuzzy-set Qualitative Comparative Analysis
indicated an asymmetrical causal relationship between balance of challenges and
abilities at advanced levels and work satisfaction. Furthermore, post hoc analyses
reveal complex configurations of job demands and resources that lead to work
enjoyment.

Companies need talented and engaged people to achieve performance goals and
create competitive gain (Crook, Todd, Combs, Woehr, & Ketchen, 2011).
According to a Gallup (2013) study, only 13% of workers universally are engaged at
work, 63% are not, and 24% even feel actively disengaged, signifying that they are
unhappy at their place of employment and liable to spread negativity to co-workers.
Employee wellbeing embraces a new perspective that considers necessary and
sufficient conditions of work enjoyment. Work enjoyment refers to employees'
assessments of work-life quality (Peters, Poutsma, Van der Heijden, Bakker, & de

27
Bruijn, 2014) and describes the degree to which workers experience their job as
intrinsically interesting or pleasurable (Graves, Ruderman, Ohlott, & Weber, 2012).

Prior research in various academic disciplines indicate several beneficial effects of

positive emotions, such as a broadening of thought–action repertoires (Fredrickson
& Joiner, 2002), more creative thinking and problem solving (Estrada, Isen, &
Young ,
2014), heightened likability and cooperation (Barsade, Ward, Turner, & Sonnenfeld,
2000), increased pro-social behavior (George, 1991), high work performance
(Hsiao, Jaw, Huan, & Woodside, 2015), and better physical well-being and coping
strategies (Diener, 2009). These effects have important implications for companies
because they relate to employee, group, and firm-level outcomes and encompass a
spectrum of managerial actions, as well as management of human resource (e.g.,
teamwork), sales management (e.g., personal selling), and innovation management
(e.g., ideas for new product development).

2.2.4 Competition on growth of sales

Every industry has an underlying structure, or a set of fundamental economic and

technical characteristics, that gives rise to these competitive forces. The strategist,
wanting to position his company to cope best with its industry environment or to
influence that environment in the company’s favor, must learn what makes the
environment tick. Chandra (2006), this view of competition pertains equally to
industries dealing in service and to those selling products principles apply to all
types of business. New entrants to an industry bring new capacity, the desire to gain
market share, and often substantial resources.

Hicks (2014) says companies diversifying through acquisition into the industry from
other markets often leverage their resources to cause a shakeup. While a company
must live with many of these factors – because they are built into industry
economics – it may have some latitude for improving matters through strategic
shifts. For example, it may try to raise buyers’ switching costs or increase product
differentiation. A focus on selling efforts in the fastest-growing segments of the
industry or on market areas with the lowest fixed cost can reduce the impact of
industry rivalry. If it is feasible, a company can try to avoid confrontation with

28
competitors having high exit barrier and can thus sidestep involvement in bitter
pricecutting.

In competitive environment, or in an environment in which it is difficult to

differentiate between products or services, the factor that may persuade a consumer
to buy from one supplier or another is the level of service they receive. The delivery
of service is therefore a critical factor in the success or otherwise of businesses. The
important of service delivery is such that consumers are often prepared to pay a
premium price for a better service. The view that consumers will, when products are
exactly the same, choose the lower priced product is too simplistic. In a highly
competitive market it may be dangerous to compete on price alone. If one
organization cuts their prices then a chain reaction may occur as other competitors
also cut their prices. In such a price cutting war there may be no winners. Some
enterprises will go out of business, others may have profits substantially reduced,
and the number of surviving service providers in the market place was reduced
leaving the consumer with less choice (Abernethy, 1999).

Competition between business or organizations can cause a phenomena known as

"convergence". Each supplier in the market place maintains a watch on what other
competitors do. If one supplier improves their product or service, the innovation
creates only a temporary advantage. Steenkamp (2002) other competitor will move
quickly to copy the innovation and thereby eliminate the advantage of that supplier.
It therefore becomes increasingly harder for consumers to differentiate or
distinguish between suppliers. A competitive market place suppliers aim to create
customer loyalty. This occurs when consumers continue to prefer a particular
supplier even when there is evidence of prices being lower elsewhere or other
products in the market place that may be better. Customers often continue to prefer a
particular supplier because they believe they receive good service. It does not take
much however for customer loyalty to be broken. This may be caused by reasons
such as a faulty product, an impolite employee or being incorrectly charged.

Firms that are winners at the market place are different. These firms have unique
capabilities and ability to provide superior value to customers on a continuous basis.
They call themselves winners of the market place because they claim that they have

29
the ability to do things that others cannot do. Mizell (2007) pose differences in the
value of competitions prodded to consumer are based on differences in skills and
resources and business systems. They could include special knowledge about
technology or markets the ability of people from different functional area to work
together or attitudes about the important of the consumers. Good customer care
gives customer satisfaction and companies must watch on the customers rising
expectations all the time, if they have the slightest chance of surviving in this
competitive market.

Many organizations and their leaders are habitually fixated on sales, marketing,
advertising and promotion desperately striving to attract new customers while
paying scant regard to the many customers that are leaving, just for the want of
some simple effective customer service and care. We see this particularly in highly
competitive and profitable sectors, where new customers are commonly extended
better terms and attention than existing customers. Leaders and spokespeople will
blame the competitive market, and the fickleness of customers, but ultimately when
a customer leaves a supplier it's because they are unhappy about the service they are
receiving (Kroes, 2002).

As a general rule therefore a focused strategy is often best suited to smaller firm
since it is typically these which have flexibility to respond quickly to specialized
needs to the small segments. Benefits include a more detailed understanding of
particular segment, creation of barriers to entry, a reputation for specialization and
the ability to concentrate their efforts. Olima (2014) competitive differentiation
occurs when a firm somehow differentiates its product or service from that of
competitors. Competitive differentiation may be an actual difference, such as a
longer warranty or a lower price, but often the difference is only perceived.
Difference in perception is usually accomplished through advertising, the purpose of
which is to convince consumers that one company's product is different from
another company's product. Common ways to differentiate a product or service
include advertising a better-quality product, better service, better taste, or just a
better image.

30
One product may cost twice as much as similar products on the market, chances are
most consumers will avoid buying the more expensive product and buy the
competitors' products instead. There can be few or many competitors (typically
many) in a monopolistic industry, and it is somewhat difficult to enter or leave such
an industry. An oligopoly exists when there are few sellers in a certain industry.
This occurs because a large investment is required to enter the industry, which
makes it difficult to enter or leave. The type of products sold in an oligopoly can be
similar or different, and each seller has some control over price, examples of
oligopolies include the automobile, airplane, and steel industries (Cannon, 2011).

2.3 Summary and Research Gap

Organizations ought to be attentive with what is going on in the external business
environment to be able to curb the challenges the business environment poses.
Every business operates in a particular environment that includes general
environment and competitive environment. In this case, the general business
environmental factors for organization includes, political, economic, social,
technological, environment, legal. The competitive business environmental factors
include customers, creditors, suppliers, competitors, and substitutes. The hospitality
industry is a major source of tourism revenue in Kenya. It however faces various
challenges like, insecurity, technological advancement, political and economic
instability. Previous studies conducted in other industries and hospitality industry
were response strategies adopted by the organizations to changes in environment as
a whole. However, the interdependent relationship between marketing strategies and
performance of large hotels has not been brought out clearly. This study seeks to
understand the interdependent relationship that exists between organizations and
their external business environment and marketing strategies adopted for growth and
success.

2.4 Conceptual Framework

The framework below is adopted in the study to show the relationship between
independent and dependent variables. The following variable has some relation with
the factors affecting Growth of sales in the hotel Sector in Kenya.

Independent Variables Dependent Variable

31
 Advertising

Pricing Growth of sales in the hotel

Sector
Employee Skill

Competition

Figure 2.1 Conceptual framework

2.5 Operationalization of Variables

32
 Advertising
Sales promotions
Sales efforts
Direct marketing

Pricing
Penetration pricing
Growth of salesin the hotel Sector
Visibility of the brand
Increase in hotel bookings

Employee Skill

Training and development

Performance evaluations
Employee capacity

Competition
Niche customization
Customer base
Customized services

Figure 2.2Operationalization of Variables

2.6 Chapter Summary

This chapter reviewed the theoretical aspect of the study, it’s the secondary data of
the research and it is carried out to give the theoretical account of the study where it
had three theories;The Universal Perspective theory, Ansoff Growth Model and
ResourceBased View/theory (RBV), . It focuses on the review of past studies on the
topic of the research study from a global and local perspective. It also covers the
objectives of the study acknowledging the sources of the information about the
objectives, the critical analysis of the theoretical review and the summary of the
research study.

33
 CHAPTER THREE
RESEARCH DESIGN AND METHODOLOGY

3.0 Introduction
This chapter presents the methodology used in the study. It discusses methods used
to gather information relevant to the hypothesis, which guides this study. It
discusses aspects such as research design, target population, sampling design and
sample size, data collection methods and procedure of data analysis employed in the
study.

3.1 Research Design

Research design is the plan and structure of investigation so conceived as to obtain
answers to research questions. The plan is the overall scheme or program of the
research (Mugenda, 2014). Descriptive research design was employed in this study,
As per Kombo and Tramp (2006); descriptive research design is an intense type of
subjective examination and includes a watchful and finish perception of a social unit
being a man or family. This research design is fundamental in light of the fact that
the researcher has no impact over the variable and can report what has happened and
what is happening and use investigation instruments like surveys. Drawing in
investigation setup is moreover tremendous in light of the fact that it limits biasness
and saves time.

3.3 Target Population

Kombo and Tramp (2006) characterizes target population as all inclusive
arrangement of the investigation of all individuals from genuine or speculative
arrangement of individuals, occasions or protests which a researcher wishes to sum
up the outcomes and make references. The investigation targeted a population of
three hundred (300)which is the total employees working at Nairobi serena hotel in
kenya.

34
Table 3.1 Target Population
Category Target Population Percentage

Management 21 14%

Supervisors 42 28%

Support staff 87 58%

Total 150 100%

Source: Nairobi Serena hotel, (2018)

3.4 Sample and Sampling Technique

Purposive sampling procedure was used to identify the sample population of 150
which the researcher felt was manageable in terms of study and cost effective. To
come up a fair representation stratified random sampling technique was adopted to
ensure all categories are equitably represented in the sample. Respondents were
chosen at random from the strata. The technique is appropriate because it allows the
researcher to divide the population and reach the required size that provides reliable
detailed information. Kothari, (2012) notes that when comparing stratified random
technique with other techniques, it is appropriate as it allow examining of variance
within and among the possible stratifications. (Mugenda, 2014) Notes that stratified
random sampling ensures inclusion in the sample sub-group that would be
committed entirely by other sampling method because of their small number in the
population.

3.4 Instruments
The study used primary data which target the employees of the organization and its
management under study. The questionnaires were completed by key decision
makers involved in the human resource management. Bee, (2012) notes that use of
questionnaire ensured that confidentiality is upheld, saves on time, it is very easy to
administer. The questionnaires included organized and unstructured inquiries and
were directed through drop and pick strategy to respondents who are the
representatives of the firm. The organized inquiries were utilized as a part of a push
to save time and cash and in addition to encourage in less demanding examination as
they are in quick usable frame; while the unstructured inquiries was utilized in order

35
to urge the respondent to surrender inside and out and felt reaction without feeling
kept down in uncovering of any data.

3.5 Pilot Study

Piloting is done to test the reliability of the instruments.In this examination,
reliability was achieved by pre-testing the questionnaire with a choice from non-
respondent. The results of the pilot study were not incorporated into the findings.
Harper, (2012) contends that for a survey to deliver valuable outcomes, it must have
legitimacy and unwavering quality. The pilot test sample population should be 10%
of the target population. The questionnaires were pre- tested on five respondents.
These respondents were not included in the final study. The questionnaires were
then corrected before the final distribution is done.

3.5.1 Validity
Trochim (2006) defines validity as a result of the degree to that a check lives what
it's purported to measure. Its miles uncommon, if nearly unfeasible, that questioner
tool be 100% valid, therefore validity is usually measured in tears. As a fashion,
validation includes assembling and analyzing facts to assess the accuracy of an
instrument. To verify validity, the questionnaires had been confirmed by the
supervisor. The validating tests were on right construction of form and therefore the
contents of the questions. This was performed by means that of formulating the form
and gift to the supervisor for a review and steering.

3.5.2 Reliability test

Reliability analysis was done to work out the reliability of the form. The study used
the Cronbach’s Alpha. Gliem and Gliem (2013) established the Alpha value
threshold at 0.7, therefore forming a benchmark for the study. The Cronbach's alpha
was to verify the reliability of each objective. The findings as shown in table 3.3
indicate that Employee skills with an alpha value of 0.764, innovation as with an
alpha value of 0.723, managerial efficiency as an alpha of 0.842 and Geographic
Location an alpha of zero.817. This shows that Managerial efficiency is reliable.

3.6 Data Collection Procedure

The researcher administered the research instruments individually to the staff upon
authority. While exercising care and control to ensure all questionnaires were issued
to the respondents are received, the researcher maintained a register of

36
questionnaires, Questionnaires used in the study were hand-delivered and they were
collected after two days. The type of questions to be used included both open and
closed ended. Closed ended questions were used to ensure that the given answers are
relevant. The researcher phrased the questions clearly in order to make clear
dimensions along which respondents was analyzed. In open ended questions, space
was provided for relevant explanation by the respondents, thus giving them freedom
to express their feelings. This method was effective to the study in that; it created
confidentiality. The presence of the researcher was not required as the questionnaire
were selfexplanatory.

3.7 Data Analysis and Presentation

According to Kothari, (2012) data analysis procedure includes the process of
packaging the collected information putting in order and structuring its main
components in a way that findings can be easily and effectively communicated.
After the fieldwork, before analysis, all questionnaires were adequately checked for
reliability and verification. Editing, coding and tabulation were carried out. The data
collected were analyzed using simple qualitative and quantitative methods and were
presented using tables, figures and charts.

3.8 Ethical Considerations

Confidentiality of the data to be gathered through the questionnaires and anonymity
of the respondents was guaranteed. The respondents were required not to indicate
their names on the questionnaires. The secondary data gathered from outer sources
were not modified, kept confidential and was utilized with the end goal of this
examination only. The respondent consent was looked for and they were not
compelled to respond to the questions on the off chance that they were not willing to
do as such.

3.8.1 Informed Consent

Before conducting the research, the researcher did a pre visit to the organization and
seeked information from the organization management. The researcher was involved
the management on the extent and what information the researchers seek.

37
3.8.2 Voluntary Participation
The research was voluntary and none of the respondent was cowered to take part in
the research however the researcher took time to explain to the respondents the
importance of this research to them and to the research and any participation was
highly appreciated.

3.8.3 Confidentiality
All data that was collected in the organization was only for education purpose and
no information was reproduced without the consent of the organization and the
researcher. All the questionnaires that were distributed were attached with a copy of
the introductory letter and a copy of the student identification card.

3.8.4 Privacy
The respondents were assured that the information they shared was confidential and
all respondents were not allowed to give their personal details and all information
was coded. All the questionnaires that were distributed were attached with a copy of
the introductory letter and a copy of the student identification card.

3.8.5 Anonymity
A “strictly anonymous” study design is one in which it is impossible to trace data or
information back to the research subject from whom it was obtained. In other
words, the data cannot be identified to any particular research participant, not even
by the researcher. The research did a total separation, the study design involved in
the creation of a code linking the subject’s identity to a pseudonym, as the identity
of the subject can be traced to the data, written consent form was collected, and this
consent form has to be separated from the data that the subject provides.

3.9 Chapter Summary

This research methodology chapter provides a research methodology; research,
target population, sample and sampling technique, instruments, pilot study, data
collection procedure, data analysis and presentation, ethical considerations and
chapter summary. The next chapter provides the research findings and discussion
that were used by the study.

38
 CHAPTER FOUR
DATA ANALYSIS AND INTERPRETATION OF FINDINGS
4.0 Introduction
This chapter covers data analysis and interpretation of findings. The chapter
addresses the general information about respondents, the findings generated from
the study, descriptive and inferential statistics.

4.1 Presentation of Research Findings

4.1.1 Response Rate
Table 4.1: Response Rate
Response Frequency Percent
Returned 45 100
Unreturned 0 0
Total 45 100

A total of 45 respondents were involved in the study from which 45 of the

respondents filled the questionnaire and returned with a percentage rate of 100%
whereas 0% of questionnaires were not returned. For this reason, the study
established that the response rate was considered excellent. From the analysis it can
be concluded that majority of the respondents were able to participate in the study.
According to Schein (1992), above 60% is an excellent response rate, 50% response
rate is good while 30% is not viable. This is as shown in Table 4.1

4.1.2 Gender of respondents

The researcher sought to find out the gender of the respondent. Table 4.2 and figure
4.2 show the response.

39
Table 4.2 Gender of Respondents
gender Frequency Percent Cumulative Percent

32 71.1 71.1
male
female 13 28.9 100.0
Total 45 100.0

Figure 4.1 Gender of Respondents

The respondents were asked to indicate their response on gender According to the
findings, 71.1% of the respondents were male while 28.9% were female respondents
and was shown on table and figure 4.2. The interpretation derived from the study
revealed that there was gender imbalance.

4.1.3 Highest Educational Level

The researcher sought to investigate the education level of employee at Kevian

Kenya
Ltd the findings were as follows

Table 4.3 Highest Educational Level

Frequency Percent Cumulative Percent

40
 PHD 3 6.7 6.7
masters 5 11.1 17.8

degree 12 26.7 44.4

secondary certificate 16 35.6 80.0
Others 9 20.0 100.0
Total 45 100.0

Figure 4.3 Highest Educational Levels

The table 4.4 and figure 4.3 shows that the majority of respondents have college
level of education with 54% confirming,46% of the respondents said they had
university education, none of the respondents said they had secondary level of
education still none of the respondents had primary level education. This showed
that majority of the respondents had diplomas from college and were educated.
Based on the research findings it interpreted most of the employees at Nairobi
Serena hotel hence able to meet performance target highly contributing to a high
sales growth rate

41
4.1.4 Analysis on Number of Years Worked in the Organization

Table 4.4 Number of Years Worked in the Organization

Frequency Percent Valid Percent Cumulative Percent

below 2 years 1 2.2 2.2 2.2

3-8 years 7 15.6 15.6 17.8
9-13 years 22 48.9 48.9 66.7
14-18 years 15 33.3 33.3 100.0
Total 45 100.0 100.0

Figure 4.4 Number of Years Worked in the Organization

From the table 4.4 shows that majority of the respondents 48.9% of the respondents
have a work experience of 9 to 13 years, 2.2% of the respondents had work
experience of less than two years, 15.6% of the respondents had a work experience
of 3 to 8 years while the remaining 33.3% had a work experience of 14 - 18year and
above. This showed that majority of the respondents had a work experience of 9 to
13 years.

4.1.5 Management Level

42
Table 4.5 Analysis on Management Level

Frequenc Percent Valid Percent Cumulative

y Percent
Top Level Management 7 15.6 15.6 15.6
Middle Level
Management 25 55.6 55.6 71.1

Operational Level
Management 13 28.9 28.9 100.0
Total 45 100.0 100.0

Figure 4.5 Analyses on Management Level

Based on the research findings from table 4.5 the respondents were asked to indicate
their management level 15.07% of the respondents indicated there in the top level
management, 55.60% of the respondents indicated that they are in the middle
management level, while the majority of the respondents were in the operational
level management as indicated by 28.90%.

4.1.6 Age of the Respondents

43
Table 4.6 Analysis on the Age of the Respondents
Frequency Percent Cumulative Percent

18-25 years
2 4.4 4.4
26-33 years 16 35.6 40.0
34-41 years 26 57.8 97.8
50 years & above 1 2.2 100.0
Total 45 100.0

Figure 4.6 Analyses on the Age of the Respondents

Tables 4.6 indicate analysis on age brackets of the respondents. Based on those
respondents, majority of the respondents were in the age bracket of 34-41 years,
4.40% of the respondents indicated they were between the age of 18 years and 25
years, while 35.60% of the respondents indicated they were within the age bracket
of 26 year and 33 years, lastly 2.20% of the respondents indicated were within the
age bracket of 50 years and above.

44
4.1.7 Advertising

Table 4.7 Analysis on advertising on growth of sales in the hospitality industry in

Kenya
N Mean Std. Deviation
Making hotel brand visible to our niche
market 45 3.3778 .91176

Having employees develop the mind

sets and capabilities behind the niche 45 3.4000 1.43654
customer-centric agenda

Establishing an organizational structure in

place that enables niche customer 45 3.8667 .78625
centricity in business decisions

Establishing new market segments based

45 4.0222 1.19637
on psychological/prestige

Valid N (listwise) 45

The respondents had been asked to indicate their level of agreement with statements
pertaining to advertising on growth of sales in the hospitality industry in Kenya. The
findings are presented in table 4.7. According the findings the respondents stated
Making hotel brand visible to our niche market had a mean of 3.3778, Having
employees develop the mind sets and capabilities behind the niche customer-centric
agenda was represented with mean of 3.4000, Establishing an organizational

45
structure in place that enables niche customer centricity in business decisions was
presented via a mean of 3.8667, while lastly Establishing new market segments
based on psychological/prestige via a mean of 4.0222 based on the research findings
it was concluded that Establishing new market segments was the key strategies
adopted by the hotel to growth of salesthis study finding concurs with Gibson (1991)
talks of advertising strategies being concerned with communication transmitted
through the mass media. Promotional mix strategy involves determination of a
judicious mix of different types of promotion. Its objective is to adequately blend
the three types of promotion to complement each other for a balanced promotional
perspective. Media selection strategy entails choosing the channels (newspapers,
magazines, television, radio, outdoor advertising, transit advertising, and direct
mail) through which messages concerning a product/service are transmitted to the
targets.

4.1.8 PricingStrategies

Table 4.8 Analysis on PricingStrategies on growth of sales in the hospitality industry

in Kenya
N Mean Std. Deviation

Extensive introductory sales 45 3.1333 1.21730

promotions

Extensive sales force efforts 45 3.4667 1.05744

Penetration pricing on services 45 3.4444 1.32383

Extended credit terms on services

given 45 3.3111 1.22144

Direct marketing on services and

products 45 3.6444 1.29957

Valid N (listwise) 45

The respondents had been asked to indicate their level of agreement with statements
pertaining to pricing strategies on growth of sales in the hospitality industry in
Kenya. The findings are presented in table 4.8. According the findings on the

46
statement Extensive introductory sales promotions as a way of growing of sales in
the hospitality industry in Kenya was represented via a mean of 3.1333, Extensive
sales force efforts as a way of growing of sales in the hospitality industry in Kenya
was represented via a mean of 3.4667, Penetration pricing on services as a way of
growing of sales in the hospitality industry in Kenya was represented via 3.4444,
Extended credit terms on services given as a way of growing of sales in the
hospitality industry in Kenya was presented via a mean of 3.3111 and lastly Direct
marketing on services and products as a way of growing of sales in the hospitality
industry in Kenya was presented with a mean of 3.6444 the study findings concur
with Kottler (2013) stresses that a hotel must set its Pricings in relation to the value
perceived and delivered to the customer. He says a hotel must set a Pricing for the
first time when it develops a new service or a product. And when is put into
practice, a hotel has to consider several factors namely; selecting the Pricing,
objectives of the Pricing, competitors cost and consumer assessment. He further
stresses that the Pricing decisions are subject to arrangement of complex
environment and competitive forces. A hotel set a not just a single Pricing but sets a
pricing structure that covers various items in its line. Pricing changes as product and
services advances and the hotel adjust the Pricing according to the demand and to
account for variation in buyer’s situation (customer).

4.1.8 Employee Skills

Table 4.9 Analysis on Employee Skills on growth of sales in the hospitality industry
in Kenya
N Mean Std. Deviation

Hotel offers training to its employee 45 3.4889 1.29021

on improving customer service

training is basically to bridge the gap

between job requirement and present 45 3.4222 1.30539
competence of an employer

47
 Employee skill in service delivery
and responding to customers directly
impacts hotel performance 45 3.8667 1.17937

Valid N (listwise) 45

The respondents had been asked to indicate their level of agreement with statements
pertaining to employee skills on growth of sales in the hospitality industry in Kenya.
The findings are presented in table 4.9. According the findings on the statement;
Hotel offers training to its employee on improving customer service in an aid to
promote of growth of sales in the hospitality industry in Kenyaas presented by a mean
of3.4889, training is basically to bridge the gap between job requirement and present
competence of an employer as shown by a mean of 3.4222, Employee skill in
service delivery and responding to customers directly impacts hotel performance as
shown by a mean of 3.8667 this study findings concurs with (Brilon, 2015) that
stated Organizations should find efficient ways to assign workers to jobs. In most
organizations, the performance of a worker depends on many things, such as one’s
expertise level, one’s concentration and organizational capacity, as well as one’s
analytical and communication skills. As workers move up in the pecking order or
switch jobs, the relative importance of each of these skills changes. Yet,
organizations frequently can only detect a collective performance measure on which
to base their decisions when deciding on promotions or allocating tasks. Therefore,
presented with such a scenario, only specific workers should get reassigned or
promoted and performance in one job may act as an indicator for performance in
another job.

4.1.9 Competition

Table 4.10 Analysis on Competition on growth of sales in the hospitality industry in

Kenya

N Mean Std. Deviation

Customization/niche in offering

48
 45 4.4222 6.14036
services
45 3.5333 1.34164
Offering incentives to the employees

Ensuring customer satisfactory is

achieved 45 2.8667 1.21730

Increasing diversity of the hotel’s

45 3.3111 1.14460
culture

Clients receive customized services 45 3.2889 1.32497

Valid N (listwise) 45

The respondents had been asked to indicate their level of agreement with statements
pertaining to competition on growth of sales in the hospitality industry in Kenya.
The findings are presented in table 4.10. According the findings on
Customization/niche in offering services as a strategy to promote on growth of sales
in the hospitality industry in Kenya was shown via a mean of 4.4222, Offering
incentives to the employees as a strategy to promote on growth of sales in the
hospitality industry in Kenya was shown via a mean of 3.5333, Ensuring customer
satisfactory is achieved strategy to promote on growth of sales in the hospitality
industry in Kenya was shown via a mean of 2.8667, Increasing diversity of the
hotel’s culture as a strategy to promote on growth of sales in the hospitality industry
in Kenya was shown via a mean of 3.3111, Clients receive customized services as a
strategy to promote on growth of sales in the hospitality industry in Kenya was
shown via a mean of 3.2889.based on the analysis of findings it was established that
the study finding concurs with Steenkamp (2002) other competitor will move
quickly to copy the innovation and thereby eliminate the advantage of that supplier.
It therefore becomes increasingly harder for consumers to differentiate or
distinguish between suppliers. A competitive market place suppliers aim to create
customer loyalty. This occurs when consumers continue to prefer a particular
supplier even when there is evidence of prices being lower elsewhere or other
products in the market place that may be better. Customers often continue to prefer a
particular supplier because they believe they receive good service. It does not take

49
much however for customer loyalty to be broken. This may be caused by reasons
such as a faulty product, an impolite employee or being incorrectly charged.

4.1.10 Correlations

Table 4.11 Correlations of Variables

advertisin pricing employee competition
g skill

Pearson 1 .199 -.219 -.459**

Correlation
advertising
Sig. (2-tailed) .189 .149 .001

N 45 45 45 45

Pearson
.199 1 -.042 .071
pricing Correlation
Sig. (2-tailed) .189 .782 .641

N 45 45 45 45

Pearson
-.219 -.042 1 .068
employee skill Correlation
Sig. (2-tailed) .149 .782 .657

50
 N 45 45 45 45

Pearson -.459** .071 .068 1

Correlation
competition
Sig. (2-tailed) .001 .641 .657

N 45 45 45 45
**. Correlation is significant at the 0.01 level (2-tailed).

The study used Pearson correlation to determine whether there is relationship

between the variables. Person correlation coefficient determines the linear
relationship between variables which is between +1 to -1. The correlation is
considered significant when the probability is below 0.05. From the table 4.21 there
is strong relationship between advertising, pricing, employee skill, competition and
growth of sales in the hospitality industry.

4.2 Limitations of Study

4.2.1 Bureaucracy
Organizations have various procedures that are outlined publicly to govern
movement of people to the organization and from the organization. However some
procedures are usually too tedious to the dislike of visitors/researchers. This was
characterized by long procedures and regulations that were expected to be followed.
Despite such challenges, the researcher was adequately prepared to abide by all the
regulations so that a successful research study could be carried out.

4.2.2 Inaccessibility to the Company

The researcher had initially been denied access based on the restrictive policies
against external researchers and especially private research studies. This was due to
the recorded history of exploring and exposing inefficiencies in various
organizations. However, the researcher overcame this challenge by using an
introduction letter from Management University of Africa which showed the
purpose of this study so that gaining accessibility could be achieved.

51
4.2.3 Lack of Cooperation
The researcher still experienced challenges on lack of cooperation. Some of the staff
within this organization had reluctantly declined to participate in this research in
pretence of not very genuine reasons. As a result, quite a number of respondents
would have failed to provide the data. However, to counter this challenge, the
researcher had to assure the respondents that this study was only covering the
academic goals.

4.3 Chapter Summary

This chapter was about data analysis. The chapter first introduces information about
information from the respondents in terms, gender of Respondents, Years of work
experience of respondents and Education Level of Respondents. The chapter was
further categorized in to quantitative analysis that revolved around discussing the
objectives of the study, The chapter also addressed the limitations of the study.

CHAPTER FIVE
SUMMARY, RECOMMENDATIONS AND CONCLUSIONS
5.0 Introduction
This chapter presented a summary on findings, conclusion and recommendations.
This was based on factors influencing growth of sales in the hospitality industry in
Kenya,

5.1 Summary of Findings

5.1.1 How advertising affect growth of sales inHospitality industry

According the findings the respondents stated Making hotel brand visible to our
niche market had a mean of 3.3778, Having employees develop the mind sets and
capabilities behind the niche customer-centric agenda was represented with mean of
3.4000, Establishing an organizational structure in place that enables niche customer
centricity in business decisions was presented via a mean of 3.8667, while lastly
Establishing new market segments based on psychological/prestige via a mean of
4.0222 based on the research findings it was concluded that Establishing new
market segments was the key strategies adopted by the hotel to growth of salesthis
52
study finding concurs withGibson (1991) talks of advertising strategies being
concerned with communication transmitted through the mass media. Promotional
mix strategy involves determination of a judicious mix of different types of
promotion. Its objective is to adequately blend the three types of promotion to
complement each other for a balanced promotional perspective. Media selection
strategy entails choosing the channels (newspapers, magazines, television, radio,
outdoor advertising, transit advertising, and direct mail) through which messages
concerning a product/service are transmitted to the targets.

5.1.2How pricing affect growth of sales in Hospitality industry

According the findings on the statement Extensive introductory sales promotions as

a way of growing of sales in the hospitality industry in Kenya was represented via a
mean of 3.1333, Extensive sales force efforts as a way of growing of sales in the
hospitality industry in Kenya was represented via a mean of 3.4667, Penetration
pricing on services as a way of growing of sales in the hospitality industry in Kenya
was represented via 3.4444, Extended credit terms on services given as a way of
growing of sales in the hospitality industry in Kenya was presented via a mean of
3.3111 and lastly Direct marketing on services and products as a way of growing of
sales in the hospitality industry in Kenya was presented with a mean of 3.6444 the
study findings concur with Kottler (2013) stresses that a hotel must set its Pricings
in relation to the value perceived and delivered to the customer. He says a hotel
must set a Pricing for the first time when it develops a new service or a product. And
when is put into practice, a hotel has to consider several factors namely; selecting
the Pricing, objectives of the Pricing, competitors cost and consumer assessment. He
further stresses that the Pricing decisions are subject to arrangement of complex
environment and competitive forces. A hotel set a not just a single Pricing but sets a
pricing structure that covers various items in its line. Pricing changes as product and
services advances and the hotel adjust the Pricing according to the demand and to
account for variation in buyer’s situation (customer).

5.1.3How customer service affect growth of sales in Hospitality industry

According the findings on the statement; Hotel offers training to its employee on
improving customer service in an aid to promote of growth of sales in the hospitality

53
industry in Kenyaas presented by a mean of3.4889, training is basically to bridge the
gap between job requirement and present competence of an employer as shown by a
mean of 3.4222, Employee skill in service delivery and responding to customers
directly impacts hotel performance as shown by a mean of 3.8667 this study
findings concurs with (Brilon, 2015) that stated Organizations should find efficient
ways to assign workers to jobs. In most organizations, the performance of a worker
depends on many things, such as one’s expertise level, one’s concentration and
organizational capacity, as well as one’s analytical and communication skills. As
workers move up in the pecking order or switch jobs, the relative importance of
each of these skills changes. Yet, organizations frequently can only detect a
collective performance measure on which to base their decisions when deciding on
promotions or allocating tasks. Therefore, presented with such a scenario, only
specific workers should get reassigned or promoted and performance in one job may
act as an indicator for performance in another job.

5.1.4 How competition affect growth of sales in hospitality industry

According the findings on Customization/niche in offering services as a strategy to

promote on growth of sales in the hospitality industry in Kenya was shown via a
mean of 4.4222, Offering incentives to the employees as a strategy to promote on
growth of sales in the hospitality industry in Kenya was shown via a mean of
3.5333, Ensuring customer satisfactory is achieved strategy to promote on growth of
sales in the hospitality industry in Kenya was shown via a mean of 2.8667,
Increasing diversity of the hotel’s culture as a strategy to promote on growth of sales
in the hospitality industry in Kenya was shown via a mean of 3.3111, Clients receive
customized services as a strategy to promote on growth of sales in the hospitality
industry in Kenya was shown via a mean of 3.2889.based on the analysis of findings
it was established that the study finding concurs with Steenkamp (2002) other
competitor will move quickly to copy the innovation and thereby eliminate the
advantage of that supplier. It therefore becomes increasingly harder for consumers
to differentiate or distinguish between suppliers. This occurs when consumers

54
continue to prefer a particular supplier even when there is evidence of prices being
lower elsewhere or other products in the market place that may be better. Customers
often continue to prefer a particular supplier because they believe they receive good
service. It does not take much however for customer loyalty to be broken. This may
be caused by reasons such as a faulty product, an impolite employee or being
incorrectly charged.

5.2 Conclusion
It was concluded that advertising influence the growth of sales in the hospitality
industry in Kenya.From the findings majority of respondents that pricing strategies
have influenced on growth of sales in the hospitality industry in Kenya. This implies
that Pricing Strategies has an influence on growth of sales in the hospitality industry
in Kenya.The analysis shows most of respondents were in agreement that employee
skills has a great effect on the growth of sales in the hospitality industry in Kenya.
This implies that employee skills have growth of sales in the hospitality industry in
Kenya.
From the findings majority of the respondents agreed that competition has an
influence on growth of sales in the hospitality industry in Kenya while a few of the
respondents disagreed. It was concluded that competition has an influence on
growth of sales in the hospitality industry in Kenya.

5.3 Recommendations

i. The performance of the organization may be determined greatly by the type

of marketing strategies employed. The study thus recommends that the
implementation process of these marketing strategies should be given top
priority during the strategy formulation process. Particularly, adequate time
and resources should be allocated in ensuring that the strategies are
implemented successfully.

ii. Further, the marketing strategies adoption should be supported by an

understanding of the hotel industry structure, the needs of target customer
segments, positional advantages being sought, and trends in the
environment. This will consequently improve on the firm’s market revenue,
share and profitability. Additionally, the organizations should focus more on
55
 the practices that are likely to accrue more benefits. This should therefore go
a long way in not only boosting but also improving the organization
performance at large.

5.4 Suggestions for Further Research

The study was only limited to Nairobi Serena hotels in Nairobi County. So as to
enable generalization of the findings, the study suggests that further study to be
conducted on hotels in other parts of the country. Additionally, a study could be
conducted on other organizations other than the hotels such as the manufacturing
sector so as to establish whether the similar phenomena prevail in these
organizations.

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APPENDIX 1: Introduction letter to Nairobi Serena Hotel

Kipkirui Korir

Management University of Africa,

P.O Box 29677-00100, Bellevue, South. C, Nairobi. Tel: 020-

2361160/1: Mobile: 0723478326

15th July 2018

The Human Resources Manager

Nairobi Serena Hotel

Dear Madam,

RE: RESEARCH PROJECT

I am a student at the Management University of Africa pursuing a Bachelor’s degree

in Management and Leadership. I am currently conducting a research project as
part of the fulfillment of the requirement to attain the degree. My topic of study is
to investigateTHE FACTORS AFFECTING THE GROWTH OF SALES IN THE
HOSPITALITY INDUSTRY: THE CASE OF NAIROBI SERENA HOTEL : My target
population include senior management and all employees at Nairobi Serena. I
would like to request the management to allow me administer the attached
questionnaire which I intend to give to respondents and collect later. The
information that will be provided by your staff is strictly for academic purposes and
shall not be used for any other purposes. I promise you confidentiality under the
academic ethics act in Kenya. Your input will go a long way to facilitate this
research study which will be useful to your organization and the government in
policy formulation.

I will appreciate your help in my research effort

Yours sincerely

Kipkirui Korir
Tel: 0723478326

Admission. NO: BML/13/00484/1/2016

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Appendix II: Questionnaire
This study seeks to highlight the relationship between marketing strategies and
performance of large hotels in Kenya. All information received was treated
confidentially and be used for academic purposes only. Answer by writing in
the spaces provided or by ticking in the appropriate box.

SECTION A: BACKGROUND INFORMATION

1. What is your highest level ofeducation?

a) PHD ( )

b) Masters ( )

c) Bachelors’ Degree ()

d) Diploma ()

e) Secondary Level ()
f)Any Other (Specify)
…………………………………………………………….

2. Kindly indicate how long you have served in thisorganization

a) Below 2 years ( )

b) 3-8 Years ( )

c) 9-13 years ( )

d) 14-18 years ( )

e) Over 19 years ( )

SECTION B: Advertising

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 5. Advertisingstrategies
This section aims at establishing the advertising adopted by the hotels. Kindly use
a scale of 1 to 5 where 1 is to very small extent, 2 to small extent, 3 to moderate
extent, 4 to large extent and 5 to very large extent to rate the following statements.

Statement 1 2 3 4 5

Making hotel brand visible to our niche market

Having employees develop the mind sets and capabilities

behind the niche customer-centric agenda

Establishing an organizational structure in place that

enables niche customer centricity in business decisions

Establishing new market segments based on

psychological/prestige

5. Pricingstrategies

This section aims at establishing the pricing strategies adopted by the hotels.
Kindly use a scale of 1 to 5 where 1 is to very small extent, 2 to small extent, 3
to moderate extent, 4 to large extent and 5 to very large extent to rate the
following statements.

Statement 1 2 3 4 5

Extensive introductory sales promotions

Extensive sales force efforts

Penetration pricing on services

Extended credit terms on services given

Direct marketing on services and products

3. Employee skill
This section aims at establishing the employee skill in relation to growth of sales by
the hotels. Kindly use a scale of 1 to 5 where 1 is to very small extent, 2 to small
extent, 3 to moderate extent, 4 to large extent and 5 to very large extent to rate the
following statements.

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 Statement 1 2 3 4 5

Hotel offers training to its employee on improving

customer service
training is basically to bridge the gap between job
requirement and present competence of an employer

Employee skill in service delivery and responding to

customers directly impacts hotel performance

7. Competition

This section aims at establishing the competition strategies adopted by the hotels.
Kindly use a scale of 1 to 5 where 1 is to very small extent, 2 to small extent, 3 to
moderate extent, 4 to large extent and 5 to very large extent to rate the following
statements.

Statement 1 2 3 4 5

Customization/niche in offering services

Offering incentives to the employees

Ensuring customer satisfactory is achieved

Increasing diversity of the hotel’s culture

Clients receive customized services

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