Tourism Marketing: Strategic Planning, Week 6

• Week 6 focuses on "The Role of Marketing in Strategic Planning" for DYCHThm323: Tourism Hospitality and Marketing.
• Upon completion participants should be able to extrapolate the relationship between stakeholders, processes, resources, and organization in a high-performance business; explain the 4 planning activities of corporate strategic planning and understand the process involved in defining a company's mission, goals and objectives; enumerate steps involved in the business strategy planning process and design business portfolios and growth strategies.

Nature of High-Performance Business

• Many companies have tried strategies like mergers, downsizing, financial engineering, and Total Quality Management (TQM) to achieve high performance.
• Overall results have been disappointing, with few approaches leading to sustained success.
• Success requires multiple aspects to work well simultaneously, and continuous improvement is essential for lasting performance.
• Companies need to follow a specific process involving building brand, assessing market potential, choosing target audiences, creating a strategy, putting tactics into action, and reflection of progress.

Corporate Strategic Planning: Defining Marketing's Role

• Strategic marketing planning involves creating an identity, including a corporate vision outlining future direction.
• Also involves a corporate mission to communicate why the company exists.
• Visions focus on the future, and missions address the present.
• Goals express future plans emotionally without specifics.
• Objectives should be measurable and emotionless.
• Example of Corporate Vision (Amazon): To be Earth's most customer-centric company, building a place to find and discover anything to buy online.
• Example of Corporate Mission (Patagonia): Build the best product, cause no unnecessary harm, and use business to inspire and implement solutions to the environmental crisis.
• Example of Corporate Goal: Exponentially increase market share in the United States.
• Example of Corporate Objective: Increase US market share by 2% each quarter for the next three years.

Managing the marketing effort

• Marketing process requires four marketing management functions.
• Includes marketing analysis, strategy development, implementation, and control.

Marketing Analysis

• Begins with analysis, including the marketing audit stage.
• Macro-environment analysis considers factors like inflation rates and political stability.
• Many companies use PEST analysis to explore political, economic, social, and technological factors.
• Micro-environment analysis looks at factors such as suppliers and customers.
• Understanding these factors is crucial for strategy development.
• Market analysis examines growth rates and distribution channels.
• Portfolio analysis looks at product offerings to determine resource allocation.
• SWOT analysis focuses on strengths, weaknesses (internal), opportunities, and threats (external).
• A SWOT analysis can provide valuable insights for identifying niche markets and areas for improvement.

Marketing Strategy Development (Planning)

• All marketing options are considered, followed by establishing a market position.
• Market position is the perception of a product in the consumer's mind compared to competitors.
• A company must control and establish this position.
• Marketers identify target markets using segmentation strategies.
• These strategies create subgroups with similar characteristics, for specific targeting and positioning.
• Companies decide whether to use a push or pull strategy.
• A push approach promotes the product to potential customers.
• A pull approach generates consumer interest through tactics like social media.
• Quantifiable objectives for the marketing plan are set
• Measurable objectives play a crucial role in evaluating the success of the marketing strategy.

Marketing Implementation

• Implementation focuses on the marketing mix
• Highlights a brand's unique selling points known as the four Ps: Product, Price, Promotion, and Place.
• Product: Clearly defines the competitive advantages and uniqueness of the product.
• Price: Sets the price point considering profit margins and price elasticity.
• Promotion: Uses various forms of media to distribute information about the product to target markets.
• Promotional efforts are quantified for tracking return on investments.
• Place: Focuses on locations to make the product visible to the target consumers.
• Encompasses entire regions to specific store shelves and intangibly such as online presence.
• The goal of the four Ps is to have the right product at the right price in the right place at the right time.

Marketing Control

• The final step in the strategic marketing planning process.
• Strategy's execution is evaluated.
• The success or failure of a marketing campaign is checked by analyzing the numbers, and if numbers surpass, meet, or fall short of the objectives. With the data gathered and examined, go back to the beginning of the strategic marketing planning process, armed with more data for a fresh start.

Marketing Strategy and Marketing Mix

• The marketing mix tools includes everything a company can do to boost demand for its product.
• Plays a key role in planning and carrying out marketing strategies (4 P's of marketing).
• Each of the four Ps has its tools to contribute to the marketing mix.
• Product includes variety, quality, design, features, brand name, packaging, and services.
• Price includes list price, discounts, allowance, payment period, and credit terms.
• Place includes channels, coverage, assortments, locations, inventory, transportation, and logistics.
• Promotion includes advertising, personal selling, sales promotion, and public relations.
• A successful marketing strategy combines the 4 Ps of the marketing mix to achieve company objectives.
• Product, price, place, and promotion work together to establish the product's position in target markets.
• The marketing mix doesn't explicitly address services, but can be considered as products.
• Important activities like packaging are not specifically covered but are part of the four Ps.
• The four Ps focus more on the seller's perspective rather than the buyer's.

The Four Ps as the Four Cs

• The four Ps can be thought of as the four Cs, shifting the focus to the customer's interests.
• Customer solutions (not products): Customers seek value or solutions to their problems.
• Customer cost (not price): Customers want to understand the total cost of acquiring, using, and disposing of a product.
• Convenience (not place): Customers prefer products/services to be as convenient to purchase as possible.
• Communication (not promotion): Customers desire two-way communication with the companies that produce the product.

Unique Challenges of the Hotel Industry

• The hotel industry faced empty lobbies and changing dynamics during the pandemic
• Various challenges demand attention and solutions.

Changing Guest Expectations

• Challenge: Evolving guest expectations, influenced by technology and safety concerns, pose a challenge for hotels.
• Solution: Embrace digital transformation, partner with technology experts, offer contactless services and cater to new traveler segments.

Staff Shortage and Retention

• Challenge: The hospitality sector faces a significant staff shortage and struggles with staff retention.
• Solution: Improve hiring processes, offer fair compensation, enhance working conditions, invest in team training, and promote a positive working culture.

Personalization and Increasing Technology Adoption

• Challenge: Rising demand for personalized guest experiences due to digitalization.
• Solution: Implement tailored software solutions, offer curated packages, leverage AI/ML systems, and utilize hotel apps for personalized guest interactions.

Evolving Marketing Trends

• Challenge: Traditional marketing methods are becoming less effective, and hotels must adapt to evolving digital marketing trends.
• Solution: Establish a strong online presence, engage with guests on social media, create easily digestible content, and keep marketing strategies fresh and engaging.

Inflationary Pressure

• Challenge: Rising operational costs due to inflation.
• Solution: Implement proper inventory management, practice dynamic pricing, analyze guest data to optimize services, and automate tasks to streamline workflows and reduce costs.

Data Security Issues

• Challenge: Hotels face the risk of cyberattacks due to the sensitive nature of guest data.
• Solution: Ensure proper data storage and management, adopt secure technology and prioritize PCI-DSS compliant and HTTPS secure solutions.

Meeting Sustainability Goals

• Challenge: Align with sustainability goals to address climate concerns and changing guest preferences.
• Solution: Monitor energy consumption, adopt eco-friendly practices, and leverage technology to reduce paper usage and energy consumption.

Irregular Cash Flows

• Challenge: Delayed payments impact hotel finances.
• Solution: Choose reliable vendors, negotiate payment terms, and implement installment strategies to manage cash flow effectively.

Online Reputation Management

• Challenge: Maintaining a positive online reputation across various platforms is challenging.
• Solution: Actively manage OTAs and review platforms, use feedback management systems, and respond to all reviews.

Rising Competition

• Challenge: Increased competition from alternative accommodations poses a threat.
• Solution: Conduct regular competition analysis, adapt strategies based on market research, and offer attractive packages.