Marketing Mix and 4 P's Overview

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Questions and Answers

What distinguishes specialty wholesalers from single line wholesalers?

They exclusively focus on health foods. (correct)

They typically operate in brick-and-mortar settings.

They offer delivery services for products.

They carry a full line of groceries.

What is a key characteristic of cash and carry wholesalers?

They operate exclusively online.

They provide delivery services to their customers.

They carry a wide range of products.

They require payment in cash without delivery. (correct)

What advantage does the internet provide in electronic commerce?

It creates a limited market reach.

It offers a geographically dispersed market. (correct)

It increases the cost of setup for businesses.

It has high barriers to entry for businesses.

Which trend is likely to continue in the distribution of hospitality services?

Hotels will invest in their websites for direct customer links. Signup and view all the answers

What shift is expected regarding hotel commission payments to intermediaries?

Payments will transition to performance-based incentives. Signup and view all the answers

What is the primary goal of the status quo pricing objective?

To maintain current price levels and profits Signup and view all the answers

Which of the following is NOT a hospitality pricing objective?

Maximize production speed Signup and view all the answers

How does 'service differentiation' influence pricing decisions?

It necessitates different pricing strategies to highlight uniqueness Signup and view all the answers

What might influence pricing decisions from within an organization?

Organizational policies regarding pricing Signup and view all the answers

Which factor is an external consideration in pricing decisions?

Competitor prices Signup and view all the answers

Which pricing objective is most focused on customer retention?

Generate guest loyalty Signup and view all the answers

What is a potential result of maintaining an exclusive image in hospitality pricing?

Higher price points for services offered Signup and view all the answers

Which of the following pricing objectives would likely focus on utilizing resources effectively during off-peak hours?

Use facilities on off-hours and seasons Signup and view all the answers

What is the primary purpose of franchising?

To enable one business to sell another's products or services under a specific name. Signup and view all the answers

Which of the following is NOT a characteristic of franchising?

Independent control over business operations. Signup and view all the answers

In which type of retailing do consumers receive assistance from sales clerks?

Department Store Retailing Signup and view all the answers

How does supermarket retailing primarily operate?

On a self-service basis without direct assistance from employees. Signup and view all the answers

What describes full-service wholesalers?

They carry non-perishable items and serve various retail sectors. Signup and view all the answers

Which example best fits non-store retailing?

A door-to-door selling scheme. Signup and view all the answers

What is generally included in a franchising agreement?

Training and support for new business practices. Signup and view all the answers

Which type of retailing is characterized by direct interaction between consumers and sellers without a fixed store location?

Non-Store Retailing Signup and view all the answers

What is the main role of a retailer in the distribution channel?

To link producers directly to consumers Signup and view all the answers

Which distribution channel involves the use of an agent?

Producer to Agent/Broker to Wholesaler to Retailer to Consumer Signup and view all the answers

What characterizes exclusive distribution?

Products are sold by one middleman in a geographic area Signup and view all the answers

Which of the following best describes general merchandise stores?

Outlets that offer a wide variety of product lines Signup and view all the answers

What is a key characteristic of corporate chain stores?

They consist of two or more outlets that are centrally managed Signup and view all the answers

What type of retailer focuses on a limited number of related products?

Limited line stores Signup and view all the answers

What type of market exposure involves products available at almost all outlets?

Convenience store distribution Signup and view all the answers

Which type of retailer may operate under a franchise agreement?

Independent retailers Signup and view all the answers

Which of the following is NOT one of the original components of the Marketing Mix as developed by Prof. Neil Borden?

Public Relations Signup and view all the answers

What is the primary purpose of the Marketing Mix in a hospitality business?

To effectively market products or services Signup and view all the answers

Which of the following correctly lists the 4P's of Marketing?

Product, Price, Place, Promotion Signup and view all the answers

What does the term 'Target Market' refer to in the context of marketing?

The specific group of buyers targeted by the marketing strategy Signup and view all the answers

What is a key characteristic of the Marketing Mix as it relates to customer needs?

It should be based on the needs, wants, and problems of customers. Signup and view all the answers

How did McCarthy contribute to the concept of the Marketing Mix?

He reduced the original six elements to four essential ones. Signup and view all the answers

Which element of the Marketing Mix is primarily concerned with how much a customer pays for a product or service?

Price Signup and view all the answers

What aspect does the 'Place' element of the Marketing Mix relate to?

The location where the product is sold Signup and view all the answers

Study Notes

Marketing Mix

The Marketing Mix is a combination of tactics used to achieve marketing objectives
The Marketing Mix was originally comprised of six elements: product, planning, pricing, distribution, promotion, servicing, and market research
The Marketing Mix was later simplified to four elements by McCarthy: product, price, place, and promotion
The Marketing Mix is the sum of a hospitality company's offerings for the market to satisfy guest needs
The Marketing Mix consists of the controllable variables a firm uses to pursue a desired level of sales in the target market
The Target Market are the buyers of goods, including both present and prospective buyers

4 P's of Marketing Mix

Product: The good or service being offered to meet a need
Price: The cost of the product or service (consider internal and external factors)
Promotion: Marketing communications used to persuade consumers
Place: Distribution channels used to make products accessible to buyers

Pricing Objectives

Pricing objectives take into account the unique features of hospitality services, such as intangibility, perishability, and heterogeneity
Example objectives include:
- Increasing market share
- Achieving a specified profit level
- Maintaining an exclusive image
- Appealing to new market segments
- Exercising price leadership
- Generating guest loyalty

Factors Influencing Pricing Decisions

Internal Factors
- Organizational policies, which determine pricing strategy based on production and marketing
- Service differentiation, which requires distinctive pricing compared to competitors
- Service cost, which necessitates charging enough to cover costs
External Factors
- Competition: The price charged by competitors influences pricing decisions
- Economic conditions: Inflation and recession affect consumer spending and pricing
- Government regulations: Legislation affects pricing practices, such as setting minimum wages or taxes

Distribution Channels

Producer to Consumer: Direct selling from producer to consumer (e.g., farmer's markets)
Producer to Retailer to Consumer: One intermediary, the retailer, connects producer to consumer
Producer to Wholesaler to Retailer to Consumer: The traditional channel for consumer goods
Producer to Agent/Broker to Wholesaler to Retailer to Consumer: Multiple intermediaries, with agents facilitating negotiation

Types of Market Exposure

Convenience Store: Products available at nearly every outlet
Selective Distribution: Products available at several outlets, but not all
Exclusive Distribution: Products sold through a single middleman in a geographic area

Retailing

Classification of Retailers
- According to Size of Store:
  - Large-scale Retailers
  - Small-scale Retailers
- According to Product Lines Carried:
  - General Merchandise Stores (carry a variety of product lines)
  - Limited Line Stores (carry a narrow range of products or a single product line)
- According to Form of Ownership:
  - Corporate Chain Stores (centrally owned and managed with multiple outlets)
  - Independent Retailers (single ownership and management)
  - Franchise Stores (contractual agreements between franchisers and franchisees)
- According to Method of Operation:
  - Full-Service Retailing (over-the-counter selling)
  - Supermarket Retailing (self-service, offering major product lines)
  - Department Store Retailing (offers more extensive selections than supermarkets)
  - Non-Store Retailing (selling outside a store, including personal selling or home-based sales)

Franchising

A contractual agreement where a franchiser grants a franchisee the right to operate a business using the franchiser's name, brand, and system
Benefits of franchising include standardized products, brand recognition, and reduced marketing costs for the franchisee
Major international restaurant chains often franchise their names to local operators in different countries

Wholesaling

Wholesalers purchase goods from manufacturers and sell them to retailers or other wholesalers
Types of Wholesalers:
- Full-Service Wholesalers (offer a range of services, such as storage, transportation, and financing)
- Limited Function Wholesalers (perform specific functions, like cash-and-carry or drop shipping)

Electronic Channels of Distribution

Internet
- Internet marketing offers a geographically dispersed market, low barriers to entry, and utilization of e-commerce technology.

Trends in Electronic Distribution of Hospitality Services

Hotel chains are investing in their own websites and offering direct links to customers and wholesalers.
Hotels are building business through their websites, but online travel agencies remain popular for leisure travelers seeking diverse options.
Hotel commission payments are being replaced by performance-based programs aimed at market share gain and value-added services.

Electronic Commerce (E-Commerce)

The process of electronically buying, selling, transferring, or exchanging products, services, and information using electronic networks and computers.

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Description

Explore the essential concepts of the Marketing Mix, including its original six elements and McCarthy's simplified four P's. Understand how these factors influence a hospitality company's offerings and their target market. Test your knowledge on product, price, promotion, and place.