Tourism and Hospitality Marketing PDF

competitive. The firms that survive this LESSON 1: OVERVIEW OF TOURISM consolidation will be the ones that understand AND HOSPITALITY MARKETING their customers. INTRODUCTION C. In response to growing...

competitive. The firms that survive this LESSON 1: OVERVIEW OF TOURISM consolidation will be the ones that understand AND HOSPITALITY MARKETING their customers. INTRODUCTION C. In response to growing competitive pressures, hotel chains are relying on the expertise of the - Tourism and hospitality marketing is a marketing director. dynamic profession that influences travel experiences and drives economic progress. Its Travel Industry Marketing key responsibilities include the strategic development, promotion, and distribution of A. Successful hospitality marketing is highly tourism and hospitality products and services to dependent on the entire travel industry. fulfill the different needs and preferences of B. Government or quasi-government agencies travelers. play an important role in travel industry marketing - This overview will look at the key through legislation aimed at enhancing the concepts, challenges, and possibilities in this industry and through the promotion of regions industry. We will look at how good marketing and nations. techniques may create memorable experiences, strengthen businesses, and promote long-term C. Few industries are as interdependent as the tourism development. travel and hospitality industries. - Understanding the complex relationship Understanding the Marketplace and Customer between marketing and the tourist and hospitality Needs industries allows us to get significant insights into the techniques that contribute to the success of Understanding the Marketplace and the destinations, hotels, restaurants, and other Customer’s Needs, Wants, and Demand travel-related businesses. - The basic needs include food, clothing, What is Hospitality Marketing? warmth, safety, social needs for belonging, affection, fun, and relaxation. Moreover, the - Marketing is the art and science of finding, following are added to human needs: esteem retaining, and growing profitable customers. needs for prestige, recognition, and fame, and Importance of Marketing in the Hospitality individual needs for knowledge, and self- and Tourism Industry expression. On the other hand, wants are how people communicate their needs. For example A. The entrance of corporate giants into the hungry needs food but wants a hamburger, hospitality market and the marketing skills these French fries, and soda. Wants are described in companies have brought to the industry have terms of objectives that will satisfy needs. increased the importance of marketing within the Customers have almost limitless wants, but industry. limited resources. They choose products and B. Analysts predict that the hotel industry will services that deliver the most satisfaction for their consolidate in much the same way as the money. When backed by buying power, wants to airline industry has, with five or six major become demands. chains dominating the market. Such Market Offerings: Tangible Products, consolidation will create a market that is highly Services, and Experiences management as finding as many customers as possible and increasing demand. However, - Consumer needs and wants are fulfilled marketing managers know they cannot serve all through a market offering: a product that is the customers. Instead, the company wants to select combination of tangible, services, information, or only customers that it can serve well and experiential product components. In the profitably. For example, the fast food chain hospitality industry, we often associate the word Jollibee profitably targets families. Moreover, product with tangible products such as hotel Holiday Inn Express targets business travelers. rooms, on the other hand, intangible products include customer services and experiences. Choosing a Value Proposition Managers of resorts realize that their guests will - The company must also decide how it will be leaving with memories of their stay. They try to serve targeted customers – how it will create experiences that will generate pleasant differentiate and position itself in the memories. marketplace. A company’s value proposition is Value, Expectations, and Satisfaction the set of benefits or values it promises to deliver to consumers to satisfy their needs. Such value A. Customer Value is the difference between the propositions differentiate one brand from another. benefits that the customer gains from owning The customer question is “Why should I buy your and/or using a product and the costs of obtaining brand rather than a competitor?” Companies the product. must design strong value propositions that give B. Customer Expectations are based on past them the greatest advantage in their target buying experiences, the opinions of friends, and markets. market information. Marketing Management Orientations C. Satisfaction with a product is determined by - Marketing management designs strategies how well the product meets the customer’s that will build profitable relationships with target expectations for that product. consumers. But what philosophy should guide Designing Customer Value-Driven Marketing these marketing strategies? What weight should Strategy be given to the interest of customers and the organization? There are alternative concepts - Once it fully understands consumers and under which organizations design and carry out the marketplace, marketing management can their marketing strategies:production, selling, and design a customer-driven marketing strategy. To marketing. design a winning marketing strategy, the marketing manager must answer two important The Production Concepts questions: what customers will we serve and how - The production concept is one of the can we serve these customers best? oldest philosophies guiding sellers. The Selecting Customers to Serve production concept holds that consumers will favor products that are available and highly - The company must decide who it will serve. affordable and therefore management should It does this by dividing the market into segments focus on production and distribution efficiency. of customers and selecting which segments it will The challenge with the production systems is that go after. Some people think of marketing they focus more on production systems and forget the customers. Societal Marketing Concept. The Product Concept - The societal marketing concept holds that the organization should determine the needs, - The product concept, like the production wants, and interests of target markets and deliver concept, has an inward focus. The product the desired satisfactions more effectively and concept holds that consumers will favor products efficiently than competitors in a way that that offer the most in quality, performance, and maintains or improves the consumer's and innovative features. Under this concept, society’s well-being. marketing strategy focuses on making continuous product improvements. Product Building Customer Relationships quality and progress are important parts of - Customer relationship management marketing strategies. Nonetheless, focusing only (CRM) involves managing detailed information on products can lead to marketing bias. about individual customers and carefully The Selling Concept managing customer “touch points” to maximize customer loyalty. - The selling concept holds that consumers will not buy enough of the products unless the Capturing Value from Customers company assumes a large selling and promotion - We try to capture value from our effort. A selling focus aims to get every possible customers in the form of current and future sales, sale, and not to worry about satisfaction after the market share, and profits. By creating superior sale or the revenue contribution of the sales. The customer value, the firm creates highly satisfied selling concept does not establish a long-term customers who stay loyal, purchase products and relationship with the customer because the focus avail more services. is on getting what one has rather than creating a product to meet the needs of the market. This A. Customer Loyalty and Retention. scenario often happens when restaurants become more aggressive in advertising products - The benefits of customer loyalty come without analyzing why sales are dropping. They from continued patronage of loyal customers, do not try to innovate their product to fit the reduced marketing costs, and decreased price expectations of the changing market. Instead, sensitivity of loyal customers. they sell harder, through an increase in B. Growing Share of Customer. advertising and couponing. Eventually, they go out of business because their product no longer - Beyond simply retaining good customers satisfies the needs of the marketplace. to capture LTV, good CRM can help marketers increase their share of the share they get of the Marketing Concept. customers purchasing in their product categories. - The marketing concept holds that achieving C. Building Customer Equity. organizational goals depends on determining the needs and wants of target markets and delivering - Customer equity is the discounted LTV’s of the desired satisfaction more effectively and all the company’s current and potential efficiently than competitors. customers. One builds current and potential customers. One builds customer equity by delivering products that create high customer satisfaction and have high perceived value. INTERNAL MARKETING SERVICE CHARACTERISTICS OF THE - The service firm must effectively train and HOSPITALITY AND TOURISM INDUSTRY motivate its customer-contact employees and all the supporting service people to work as a team The Service Culture to provide customer satisfaction. - The service culture focuses on serving EXTERNAL MARKETING and satisfying the customer. The service culture has to start with top management and flow down. - External marketing is the action of promoting your business and its services. It is about getting people through the door and Four Characteristics of Services reaching as many people as possible who may be interested in employing your services. This Service Management Concepts for the type of marketing is most undertaken with Hospitality Industry Television, radio ads, flyers, brochures, social media, and search engine advertising. INTERACTIVE MARKETING - The perceived service quality depends heavily on the quality of the buyer-seller interaction during the service encounter. The Service Profit Chain - A model that shows the relationships between employee satisfaction, customer satisfaction, customer retention, value creation, and profitability. Five Links of Service Profit Chain THREE TYPES OF MARKETING MANAGEMENT STRATEGIES FOR SERVICE BUSINESSES A. Managing differentiation. - The solution to price competition is to develop a differentiated offering. The offer can include innovative features that set one company’s offer apart from that of its competitors. B. Managing Service Quality. - With hospitality products, quality is measured by how well customer expectations are met. C. Manage Service Productivity D. Resolving Customer Complaints. marketing management’s ability to build and maintain - Resolving customer complaints is a critical successful relationships with customers. The component of customer retention. marketing environment includes forces such as: E. Managing employees as part of the political, legal, regulatory, economic, social, technological, and competitive. product. - In the hospitality industry, employees are a Microenvironment critical part of the product and marketing mix. F. Managing Perceived Risk. - The microenvironment consists of actors and forces close to the company that can affect its ability - The high risk that people perceive when to serve its customers. The players in the purchasing hospitality products increases loyalty microenvironment include the company, suppliers, to companies that have provided them with a market intermediaries, customers, and the public. consistent product in the past. G. Managing Capacity and Demand. A. The company. Marketing managers work closely - Because services are perishable, with top management and the various company managing capacity and demand is a key function departments. of hospitality marketing. First, services must B. Competitors. They are part of the adjust their operating systems to enable the microenvironment and must be monitored closely. business to operate at maximum capacity. Second, they must remember that their goal is to C. Suppliers. Firms and individuals that provide the resources needed by the company to produce its create satisfied customers. Research has shown goods and services. that customer complaints increase when service firms operate above 80 percent of their capacity. D. Marketing intermediaries. Firms that help the company promote, sell, and distribute its goods to the final buyers. Lesson 2: HOSPITALITY AND TOURISM E. Disintermediation. The elimination of MARKETING ENVIRONMENT intermediaries. INTRODUCTION F. Marketing services agencies. Marketing research - The hospitality and tourism industries operate firms, advertising agencies, media firms, and in a dynamic and complex marketing environment marketing consulting firms help companies target and influenced by several kinds of economic, social, promote their products to the right market technological, political, and environmental issues. The G. Financial intermediaries. Include banks, credit complex relationship of factors has an important effect companies, insurance companies, and other firms on customer behavior, industry trends, and marketing that help hospitality companies finance their strategies. Understanding the complexities of the transaction or insure risks associated with the buying hotel and tourism marketing landscape allows and selling of goods and services. industry professionals to create more informed and relevant marketing strategies that promote success. H. Customers. Managers must understand the different types of customers: consumers, business What is the Marketing Environment? markets, government markets, resellers, and - It is the various external forces that can international markets. directly or indirectly affect the many activities of an I. Public. A public is any group that has an actual or organization. The marketing environment includes the potential interest in or impact on an organization’s actors and forces outside marketing, that affect ability to achieve its objectives. through misleading advertisements and so have led to consumer exploitation beyond limits, resulting in Macro Environment socioeconomic pollution of minds and relations. - The macroenvironment consists of the larger Responding to the Marketing Environment societal forces that affect the whole microenvironment: demographic, economic, natural, - Many companies view the marketing technological, political, competitor, and cultural forces. environment as an “uncontrollable” element to which they must adapt. Other companies take an Competitive environment. environmental management perspective. Rather than simply watching and reacting, these firms take - Each firm must consider its size and industry aggressive actions to affect the public and forces in position about its competitors. A company must their marketing environment. These companies use satisfy the needs and wants of consumers better than environmental scanning to monitor the environment. its competitors do to survive. A. Demographic environment. The study of human populations in terms of size, generation group, location, age, sex, race, occupation, and other statistics. B. Economic environment. The economic environment consists of factors that affect consumer purchasing power and spending patterns. C. Natural environment. The natural environment consists of natural resources required by marketers or affected by marketing activities. D. Technological environment. Science and technology is always changing. This changing face of science and technology has an impact on the marketing environment. Change in technology means change in products and production possibilities, also change in their manufacturing processes, costs and qualities. E. Political environment. The political environment is made up of laws, government agencies, and pressure groups that influence and limit various organizations and individuals in society. F. Cultural environment. The cultural environment includes institutions and other forces that affect society’s basic values, perceptions, preferences, and behaviors. G. Ethical Factors. A business has ethical responsibilities while delivering goods to the community. Non-standardization concerning quality, adulteration, imitation, and giving false impressions