Hospitality and Tourism Marketing Chapter 1

Introduction to Hospitality and Tourism Marketing

• Marketing is about satisfying customer needs and creating value for customers and society
• The marketing process involves understanding consumers, creating customer value, and building strong customer relationships

Understanding the Marketplace and Customer Needs

• Needs are the fundamental human necessities, such as food, clothing, and safety
• Wants are shaped by culture and individual personality
• Demands are wants backed by buying power and willingness
• Market offerings include tangible products, services, and experiences

Customer Value and Satisfaction

• Customer value is the difference between the benefits and costs of a product
• Customer expectations are based on past experiences and market information
• Meeting customer expectations leads to customer satisfaction

Exchanges and Relationships

• Marketing involves exchange, where people obtain desired objects by offering something in return
• The goal is to build desirable exchange relationships with target markets

Markets

• A market is a set of actual and potential buyers of a product
• The tourism market reflects the demands of consumers for travel and hospitality products

Hospitality Marketing

• Hospitality marketing deals with tangible products, like hotel rooms, and intangible aspects, like customer experiences
• It is critical to the success of hospitality and tourism products, organizations, and tourist destinations

Hospitality Marketing Mix

• The traditional 4Ps (Product, Price, Place, and Promotion) are expanded to 8Ps in hospitality marketing
• The additional Ps are People, Packaging, Programming, and Partnership

The 8Ps of Hospitality Marketing Mix

• First P: Product - the tangible and intangible offerings that fill customer needs
• Second P: Place - the distribution channel and location of the product
• Third P: Promotion - the communication and sales strategy
• Fourth P: Price - the monetary value of the product
• Fifth P: People - the employees who provide good service
• Sixth P: Packaging - the combination of related and complementary hospitality services into a single-price offering
• Seventh P: Programming - the development of special function activities, events, or programs that stimulate customer spending
• Eighth P: Partnership - cooperative promotions and marketing efforts with other hospitality companies

Implementing the Marketing Approach

• Operational marketing strategies include target market, product, competitive, market, and positioning strategies
• These strategies are used to implement marketing actions that move an organization from its current position to where it wants to be

Tourism Marketing

• Tourism marketing involves stimulating travel demand, creating tourism products, and promoting destination images
• It requires understanding consumer behavior, market trends, and competitor analysis

Service Systems

• Services are intangible commodities that create value for customers
• Service culture is an environment where employees are obsessed with providing superior customer service
• Developing a strong service culture is crucial for hospitality businesses### Characteristics of Service Marketing
• Service products are intangible, making it difficult for customers to evaluate before purchase
• Four unique characteristics of services:
  • Intangibility: Cannot be seen, tasted, felt, heard, or smelled before purchase
  • Inseparability: Produced and consumed simultaneously, requiring customer and service provider presence
  • Service variability: Quality depends on who provides the service and when/where it is provided
  • Perishability: Services cannot be stored or inventoried

Intangibility

• Service products are experiential, and quality is unknown until after experience
• Example: Restaurant customer doesn't know how good the meal is until after consumption
• Service marketers should provide tangible evidence to help customers evaluate the service (e.g., promotional materials, employee appearance, physical environment)

Inseparability

• Service providers and customers are part of the product
• Both must be present for the transaction to occur
• Implications:
  • Customers and employees must understand the service delivery system
  • Employees are part of the product, and customer-contact employees are critical

Service Variability

• Causes of service variability:
  • Produced and consumed simultaneously, limiting quality control
  • High degree of contact between service provider and customer
  • Fluctuating demand
  • Dependence on service provider's skills and experience
• Three steps to reduce variability and create consistency:
  • Invest in good hiring and training procedures
  • Use service blueprints to map out the service process
  • Use suggestion and complaint systems, customer surveys, and comparison shopping

Perishability

• Services cannot be stored or inventoried
• Example: Unsold hotel rooms or airline seats cannot be resold
• Implications:
  • Revenue lost from unsold services is gone forever
  • Service providers may charge for guaranteed reservations or no-shows

Management Strategies for Service Businesses

• Good service firms use marketing to position themselves strongly in target markets
• Service marketing requires additional marketing approaches to manage profitability and quality
• Strategies:
  • Service differentiation: Distinguishing a service offering from others
  • Internal marketing: Effectively training and motivating customer-contact employees
  • Interactive marketing: Quality of the buyer-seller interaction during the service encounter
  • Service quality: Focus on employee satisfaction, customer satisfaction, and loyalty
  • Service productivity: Efficient use of resources to deliver services

Service Differentiation

• Strategies to differentiate a service offering:
  • Unique features
  • Customization options
  • Superior customer service
  • Brand image and reputation
  • Convenience and accessibility
  • Price-performance ratio
  • Segmentation and targeting
  • Partnerships and collaborations

Service Quality

• Dimensions of service quality:
  • Reliability
  • Responsiveness
  • Assurance
  • Empathy
  • Tangibles
• Importance of service quality:
  • Customer satisfaction and loyalty
  • Positive word-of-mouth
  • Competitive advantage

Service Productivity

• Importance of service productivity:
  • Efficient use of resources
  • Control costs
  • Meet customer demands
• Factors influencing service productivity:
  • Utilization of resources
  • Process efficiency
  • Capacity management
  • Technology adoption
  • Employee training and development
  • Quality improvement
  • Customer involvement### Quality Goals and Customer Expectations
• A manufacturer's quality goal might be zero defects, but a service provider's goal is zero customer defections
• Service providers need to identify and understand customer expectations to deliver quality service
• Customer expectations need to be clearly defined and communicated to employees and customers

Virtues of Well-Managed Service Companies

• Customer obsession: satisfying customer needs to win enduring loyalty
• Top management commitment to quality
• Setting high service-quality standards
• Continuously monitoring service performance, including comparison shopping and customer surveys
• Communicating service quality concerns to employees and providing performance feedback

Managing Employees

• Employees are a critical part of the product and marketing mix in the hospitality industry
• Human resources and marketing departments must work together to hire friendly and capable employees
• Personnel policies should support positive relations between employees and guests
• Even minor details related to personnel policy can have a significant effect on product quality

Recommendations for Improving Service Quality

• Listening: understand customer expectations and perceptions through continuous learning
• Reliability: deliver on promises and maintain high service quality
• Basic service: keep promises, use common sense, and provide value to customers
• Service design: develop a holistic view of the service
• Recovery: respond quickly and personally to customer complaints
• Surprising customers: exceed customer expectations with uncommon swiftness and courtesy
• Fair play: demonstrate fairness to customers and employees
• Teamwork: improve employee motivation and capabilities
• Employee research: conduct research with employees to identify and solve problems
• Servant leadership: inspire leadership throughout the organization

Managing Perceived Risk

• Risk management in hospitality involves identifying, evaluating, prioritizing, and controlling risks
• Types of risk include operational risk, project risk, and other types of risk

Managing Capacity and Demand

• Demand management: identifying potential demand variations
• Capacity management: ensuring resources are available to meet demand
• Managing capacity and demand is crucial for business success

The Services Marketing Triangle

• The services marketing triangle consists of the company, customers, and providers
• Three types of marketing: internal marketing (orienting and motivating employees), interactive marketing (buyer-seller interaction), and external marketing (making promises to customers)

Service Marketing Mix

• The services marketing mix includes the traditional four Ps (product, price, promotion, and place) plus three additional Ps: people, physical evidence, and process