Tourism and Hospitality Marketing
MARKETING
NOUN: the action or business of promoting and selling products or
services, including market research and advertising.
VERB: gerund or present participle: marketing
1.advertise or promote (something). "The product was marketed under
the name “aspirin.” “
2. offer for sale. "Sheep farmers are still unable to market their lambs"
3. buy or sell provisions in a market. "Some people liked to do their
marketing very early in the morning
MARKETING DEFINED - The activities of a company associated with
buying and selling a product or service. It includes advertising, selling and
delivering products to people. People who work in marketing departments of
companies try to get the attention of target audiences by using slogans,
packaging design, celebrity endorsements and general media exposure.
The four 'Ps' of marketing are product, place, price and promotion. Source::
DEFINITION OF MARKETING - Marketing involves the interaction and
inter-relationships among consumers and producers of goods and services,
through which ideas, products and services and values are created and
exchanged for the mutual benefit of both groups.
HOSPITALITY MARKETING DEFINED
Marketing - is the process for getting a company's product or service out to
consumers. Hospitality marketing takes a look at how segments of the
hospitality industry, such as hotels, restaurants, resorts and amusement
parks, utilize marketing techniques to promote their products or services.
Marketing means exchange
The two parties to marketing exchanges are:
• users or customer
• Procedure organizations and other institutions
EVOLUTION OF MARKETING
The Production Era – Before the 1930s, ads were all about the product.
That meant long, expository text and a single-minded focus on making
items that spoke for themselves.
The production era - based on the notion that if products were priced
cheaply, they would sell regardless of consumerpreferences. This was
deemed an inward, product-oriented focus with little concern for consumers.
The sales era – In the 30s, companies realized that sometimes products
didn’t have to sell themselves. By pairing imagery with their brands, they
made the items more memorable
The sales era - were selling was the prime focus regardless of the market’s
willingness to accept the product
The marketing era – By the time the 80s rolled around, businesses were
letting the ads do the talking, sometimes not mentioning the product at all.
Marketing become about iconography first.
The marketing era - replacing the preceding approaches: businesses now
produced products they could sell which weretailored to consumer needs to
satisfy the purchaser, effectively making the organization more outward
looking
The relationship era – companies in recent years have found that its no
longer enough to carry on a one sided conversation with customers. They
prioritize engagement, retention and loyalty programs and personalized
social media contents
The relationship marketing era - was when marketing became more
about the costumers and worrying more about their pleasure with the
products and and less about their own sales transactions.
PRODUCT AND SERVICE DEFINITION
Product - Refers to all of the goods and services that are bundled together
and offered to consumers.
Service - is defined as an intangible product that is sold or purchased in the
marketplace.
include all economic activities whose output is not a physical product or
construction, is generally consumed at the time it is produced, and provides
added value in forms (such as convenience, amusement, timeliness,
comfort or health) that are essentially intangible concerns of its first
purchaser
THE UNIQUE CHARACTERISTIC OF HOSPITALITY AND TOURISM
INDUSTRY
Intangibility - Services are intangible and cannot be evaluated before they
are purchased. The consumer cannot see, taste, hear, or feel the service
before it is purchased.
Inseparability - Another difference between tangible products and services
is that services are typically produced and consumed simultaneously. In
other words, services do not go through the traditional channel of
distribution that involves a manufacturer, a wholesaler, and a retailer.
Service firms are normally retailers that produce the service and deliver it to
the consumer while it is being produced.
Perishability - The fact that services are intangible means that they cannot
be stored or placed in inventory. A good, or tangible product, can be stored
in a warehouse and then shipped to the retailer where it can continue to be
stored for some time period.
Variability - The characteristic of services to be discussed last is the
variability in the delivery of services. The marketing of both goods and
services is situational. That is, the consumer decision-making process is
influenced by many factors such as the reason for the purchase, how much
time is available, and the consumer's involvement with the product or
service category. The fact that services are intangible and consumers are
part of the production process makes it difficult to be consistent in the
delivery of a service.
NOTABLE KEY DIFFERENCES BETWEEN GOODS AND SERVICES
No ownership by customers. A customer does not take ownership when
purchasing a service
Service products as intangible performers. The value of owning a high-
performance car or the latest computer lies in the physical characteristics of
the product and to some extent the brand image it conveys. The value of
purchasing services lies in the nature of the performance
Greater involvement of customers in the production process. Because
consumers tend to be present when receiving service within a hospitality
operation, they remain involved in the service production
People as part of the product. People or firms that purchase services
come in contact with other consumers as well as the service employees
Harder for consumers to evaluate. Consumers can receive considerable
information regarding the purchase of products; however, they often do not
obtain it for services. Prior to buying a product, a consumer can research
the product attributes and performance and use this information when
making a purchase decision, especially an important one
No inventories for services. Due to the intangible nature of services, they
cannot be inventoried for future use. Therefore, a lost sale can never be
recaptured.
Marketing Mix - refers to the set of actions, or tactics, that a company uses
to promote its brand or product in the market.
PRICE - refers to the value placed by a firm on its products and services.
Some of the decisions involve pricing the product line, discounting
strategies, and positioning against competitors.
PRODUCT - This component refers to the unique combination of goods and
services offered by a firm to consumers. The product includes both the
tangible and intangible elements of the service offering. Product decisions
involve product attributes such as quality, the breadth and mix of the
product line (i.e., the number and type of products and services offered by a
firm), and services such as warranties and guarantees
PLACE - The place component refers to the manner in which the products
and services are being delivered to consumers. This component is
sometimes referred to as distribution, and it involves decisions related to the
location of facilities and the use of intermediaries. In addition, the marketing
of services includes the decision regarding customer involvement in the
production process.
PROMOTION - This component refers to the methods used to
communicate with consumer markets. The promotion mix includes
advertising, personal selling, sales promotions (e.g., coupons, rebates, and
contests), and publicity. These are the vehicles that can be used to
communicate the firm’s intended messages to consumers. The decisions
for promotion involve the amount to be spent on each component of the
promotion mix, the strategies for each of the components, and the overall
message to be sent.
PEOPLE - a company’s people are at the forefront when interacting with
customers, taking and processing their enquiries, orders and complaints in
person, through online chat, on social media, or via the call centre. They
interact with customers throughout their journey and become the ‘face’ of
the organization for the customer. Their knowledge of the company’s
products and services and how to use them, their ability to access relevant
information and their everyday approach and attitude needs to be
optimized.
Processes - This refers to how your company delivers products and
services to customers. It other words, your service performance. It also
affects planned marketing and campaign processes that encapsulate your
promotional efforts. This is true at each stage of your sales funnel. Both
products and services require detailed processes. Good processes are a
significant competitive advantage. Luckily, with widespread digital
integration, we are blessed.
Physical Evidence - provides tangible cues of the quality of experience
that a company is offering. It can be particularly useful when a customer
has not bought from the organization before and needs some reassurance,
or is expected to pay for a service before it is delivered. For a restaurant,
physical evidence could be in the form of the surroundings, staff uniform,
menus and online reviews to indicate the experience that could be
expected. For an agency, the website itself holds valuable physical
evidence – from testimonials to case studies, as well as the contracts that
companies are given to represent the services they can expect to be
delivered.
Positioning - Your positioning is what helps you highlight the unique
features of your offer
• It also helps direct your public relations strategy. How you'll
communicate with customers and prospects
• Consider what you offer and to who. Who are they, what do they
want, how can you help them get it.
MARKETING CONSIDERATIONS
NEEDS - Human needs are complex; we classify them into categories:
basic physical needs such as food and housing.
• social needs for belonging,
• affection, fun, and relaxation.
• esteem needs for prestige, recognition, and fame;
• and individual needs for knowledge and self-expression.
• When a need is not satisfied, a void exists.
WANTS
• Human wants are how people communicate their needs and are shaped by
culture and personality.
• Wants are described in terms of objects (or actions) that satisfy needs.
DEMANDS
• Demands are wants backed by buying power.
• People have almost unlimited wants, but limited resources
• They choose product that produces the most benefit for their money
PRODUCTS
- A product is anything that can be offered to a market for attention,
acquisition, use, or consumption and that might satisfy a need or want
VALUE
- Value is the consumer’s perception of the product’s overall capacity to
satisfy his or her needs
- Value is different things to different people.
SATISFACTION
- Satisfaction is determined by how well the product meets the customer’s
expectations for that product
- Satisfaction is often a measure of the consumer’s perception of that product
QUALITY
- Quality is the totality of features and characteristics of a product that bear on
its ability to meet customer needs.
- Many companies seek to maximize ROQ (Return On Quality)
EXCHANGESS
- Exchange is the act of obtaining a desired object from someone by offering
something in return
- It has legal overtones
- An exchange requires two willing parties, with free capacity to accept or
reject the other’s offer
TRANSACTIONS
- Transactions are marketing’s unit of measurement consisting of a trade of
values between two parties.
- Not all transactions involve money
RELATIONSHIP
- Relationship marketing focuses on building a relationship with a company’s
profitable customers
- Relationships include
customers, distributors, and suppliers.
MARKET SEGMENTATION
- "the process through which potential customers with similar needs and
characteristics are grouped together so that a tourism organization can apply
marketing strategies for the selected market segment efficiently"
MARKET SEGMENTATION - "identifying tourism customers and deciding on
how to meet their wants and needs" "learn more about the customers"
"making the heterogeneous market into a homogenous market"
WHY MARKET IS SEGMENTED?
• Travel market is too large to reach efficiently
• Travel market is to diverse to communicate
• Breaking up the market will make it easier to manage
IDENTIFYING MARKET SEGMENTATION
• WHO - who are in the market segment that we would like to have?
• WHAT - what are their requirements?
• WHEN -when do we promote to our market segment?
• WHERE -where do we promote the product? Through which distribution
channel?
• HOW - how do we develop marketing strategies to reach the market?
BENEFITS OF MARKET SEGMENTATION
• Understand the needs and wants of customers
• Allocate marketing expenses efficiently
• Further develop products or services
• Develop marketing strategies more precisely
WAYS TO SEGMENT MARKET
• Location of residence
• Demographics
• Equipment ownership
• Important product attributes
• Lifestyle attributes
CRITERIA USED FOR DIVIDING MARKET SEGMENTS
• Geographic Segmentation - grouping potential customers based on their
location; oldest and simplest basis for market segmentation
• Psychographic Segmentation - grouping on how they live, their priorities,
their opinions, their attitudes and their interests Personality -
introvert/extrovert, cognition, innovativeness
• Demographic Segmentation - gender, age, ethnicity, occupation,
educational level, income, household size and family situation
• Socio-Cultural Segmentation - religion, social class, family lifestyle, status
• Product-Related Segmentation - benefits people seek in the good or
service, the amount of good or service used and degree of company loyalty
MARKET SEGMENTATION DECISION PROCESS
1. Select segmentation approach
2. Create detailed profile of segment
3. Forecast market potential of each segment
4. Estimate likely market share of each segment
5. Decide which segment to target and design appropriate marketing mix
SPECIALIZED TOURIST SEGMENTS
1. Business and Professional Travelers -backbone/bread and butter
2. Incentive Travelers
3. SMERF Groups -Social, Military, Education, Religion and Fraternal
4. Mature Travelers
5. Special-Interest Travelers
PRICING AND PROMOTION STRATEGY
PRICING
- Is the amount of money charged for good or service.
- Price is the sum of the values consumers exchange for the benefits of
having or using the product or service
PRICING STRATEGY - Encompasses all the methods that a business owner
uses to determine how much to charge for a product or service
Factors Affecting Price:
- supply and demand
- consumer perceptions
- competition
- government regulations
- technological trends
- cost and expenses
PRICING TECHNIQUES
Price skimming - The practice of charging a high price on a new product or
service in order to recover costs and maximize profits as quickly as possible;
the price is then dropped when the product or service is no longer unique
Penetration pricing - a method used to build sales by charging a low initial
price to keep unit costs to customers as low as possible
A penetration pricing strategy is the opposite of price skimming. Instead of
starting with high prices, you start with low prices and gradually increase them
as they gain traction. While this does put you at risk for limited or zero profit in
the beginning, depending on how low you actually go, it also quickly converts.
In the same way that a free sample can encourage a customer to make a
purchase, you’re providing a discounted experience to create customer loyalty
Competitive pricing - Competitive pricing is extremely similar to penetration
pricing in that your goal is to drive your target audience away from your
competitors and toward your brand. However, instead of making price
increases later on, you’ll continue to track what your competitors are charging
and beat them out
Premium pricing - a pricing technique in which higher-than-average prices
are used to suggest status and prestige to the customer
Low prices aren’t always the most attractive offer. When your target audience
seeks quality over a good deal, you need to demonstrate the advantages that
your brand can provide. A premium pricing strategy can help you build the
perceived value of your product or service, straight from your initial launch.
Your prices may drop slightly over time, but they should still give your buyers
a feeling of exclusivity and, in many cases, luxury.
Psychological pricing - a pricing technique, most often used by retail
businesses, that is based on the belief that customers’ perceptions of a
product are strongly influenced by price; it includes prestige pricing, odd/even
pricing, price lining, promotional pricing, multiple-unit pricing, and bundle
pricing
The numbers you see can influence you more than you think. Instead of
changing consumer perceptions about a product, psychological pricing
uniquely aims to change perceptions about what the price even is in the first
place.
Value pricing - is perhaps the most important pricing strategy of all. This
takes into account how beneficial, high-quality, and important your customers
believe your products or services to be. Value pricing is what makes a
wedding dress worth thousands more than a prom dress and what makes
high-end salon haircuts worth more than speedy Great Clips services
Promotional Pricing - a pricing technique in which lower prices are offered
for a limited period of time to stimulate sales
PROMOTION
- The promotion strategy is the most visible marketing strategy, designed to
get the attention of prospective customers and convince them to buy from
you.
The Role of Promotion Strategy
- Promotion is communication intended to persuade, inform, or remind a target
audience about a business or its products.
- The promotion strategy involves planning, determining the right promotional
mix, and selecting specific promotional activities
The Elements Of Promotional Mix
- personal selling
- publicity
- sales promotion
- internet marketing
- advertising
Types Of Advertising
- magazines
- direct email
- outdoor advertising
- directories
- transit advertising
- television
- radio
- internet
- specialty items
- newspapers
PUBLICITY - Placement in the media of newsworthy items about a company,
product, or person
Examples Of Sales Promotion
- displays
- premiums
- rebates
- samples
- sweepstakes and contest
PERSONAL SELLING
- is a face-to-face selling technique by which a salesperson uses his or her
interpersonal skills to persuade a customer in buying a particular product
- The salesperson tries to highlight various features of the product to convince
the customer that it will only add value.
PRODUCT DEVELOPMENT
What Is a Product? A product is anything that can be offered to a market for
attention, acquisition, use or consumption that might satisfy a want or need. It
includes physical object, service, places, or ideas
Types of Products
Goods – physical products with form and substance
Consumer Products – those used by consumers for their own use and
satisfaction
Services – non-physical products usually involving performance
Business Products - those used in the running of a business or in the
manufacture of products for resale
Product Consideration
- Accessibility: this refers to how accessible the product is in in terms of
location and hours of operation
- Atmosphere: Is a critical elements in service. It is appreciated through the
sense. Sensory terms provide description for the atmosphere as a particular
set if surrounding
- Customer Interaction with the service system: Managers must think
about how the customers use the product in the three phases of involvement
- Joining
- Consumption
- detachment
- Customer become part of the product you are offering.
- Coproduction: Involving the guest in service delivery can increase capacity,
improve customer satisfaction and reduce costs
Brand - A name, term, sign, symbol, design, or combination that a uses to
identify its products and differentiate them from those of competitors
Trademark - a symbol, word, or words legally registered or established by
use as representing a company or product
THE ROLE OF BRAND
- Identify the maker
- Simplify product handling
- Organize accounting
- Offer legal protection
- Create barriers to entry
- Serve as a competitive advantage
- Signify quality
- Secure price premium
PRODUCT DEVELOPMENT
- Idea generation
- Idea screening
- Concept Development and testing
- Product Concept
- Marketing Strategy
- Business Analysis
- Product Development
Introduction stage - The product life-cycle stage in which the new product is
first distributed and made available for purchase
Growth Stage - The product life-cycle stage in which a product’s sales start
climbing quickly
Maturity Stage - The stage in the product life cycle in which sales growth
slows or levels off. Modify the market, the product, and the marketing mix
Decline Stage - The product life cycle stage in which a product’s sales
decline
