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Title: I.%20Introduction:Marketing%20in%20the%20Hospitality%20Industry


1
Introduction
  • I. Introduction Marketing in the Hospitality
    Industry
  • 1) Customer orientation. The purpose of a
    Business is to create and maintain profitable
    customers. Customer satisfaction leading to
    profit is the central goal of hospitality
    marketing.

II. What Is Hospitality Marketing? Marketing is a
social and managerial process by which
individuals and groups obtain what they need and
want through creating and exchanging products and
value with others.
2
III. Importance of Marketing
  • 1) The entrance of corporate giants into the
    hospitality market and the marketing skills these
    companies have brought to the industry have
    increased the importance of marketing within the
    industry.
  • 2) Analysts predict that the hotel industry will
    consolidate in much the same way as the airline
    industry has, with five or six major chains
    dominating the market. Such consolidation will
    create a market that is highly competitive. The
    firms that survive this consolidation will he the
    ones that understand their customers.
  • 3) In response to growing competitive pressures,
    hotel chains are relying on the expertise of the
    marketing director.

3
IV. Travel Industry Marketing
  • 1) Successful hospitality marketing is highly
    dependent on the entire travel industry.
  • 2) Government or quasigovernment agencies play an
    important role in travel industry marketing
    through legislation aimed at enhancing the
    industry and through promotion of regions,
    states, and nations.
  • 3) Few industries are as interdependent as the
    travel and hospitality industries.
  • V. Understanding Marketing.
  • Marketing is a social and managerial process by
    which individuals and groups obtain what they
    need and want through creating and exchanging
    products and value with others. To understand the
    definition, we must understand the following
    terms needs, wants, and demands products
    value, cost, and satisfaction exchange,
    transactions, and relationships and markets.

4
  • 1) Needs, wants, and demands
  • a) Needs. Human beings have many complex needs.
    These include basic physical needs for food,
    clothing, warmth, and safety social needs for
    belonging, affection, fun, and relaxation esteem
    needs for prestige, recognition, and fame and
    individual needs for knowledge and
    selfexpression.
  • b) Wants. Wants are how people communicate their
    needs.
  • c) Demands. People have almost unlimited wants,
    but limited resources. They chose products that
    produce the most satisfaction for their money.
    When hacked by buying power, wants become demand.
  • 2) 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.
  • 3) Value, satisfaction, and quality

5
  • a) Value. Value is the consumers estimate of the
    product's overall capacity to satisfy his or her
    needs. Today's consumer behaviorists have gone
    beyond narrow economic assumptions of how
    consumers form value in their mind and make
    product choices. Modern theories of consumer
    choice behavior are important to marketers
    because the entire marketing plan rests on
    assumptions about how consumers make choices.
    Therefore, concepts of value, quality, and
    satisfaction are crucial to the discipline of
    marketing.
  • b) Satisfaction. Satisfaction with a product is
    determined by how well the product meets the
    customer's expectations for that product.
  • c) Quality. The totality of features and
    characteristics of a product that hear on its
    ability to meet customer needs. The fundamental
    aim of today's total quality movements has become
    total customer satisfaction.
  • 4) Exchange, transactions, and relationships
  • a) Exchange. Exchange is the act of obtaining a
    desired object from someone by offering something
    in return.
  • b) Transactions. A transaction is marketing's
    unit of measurement. A transaction consists of a
    trade of values between two parties.

6
  • c) Relationship marketing. Relationship marketing
    focuses on building a relationship with a
    company's profitable customers. Most companies
    are finding that they earn a higher return from
    resources invested in getting repeat sales from
    current customers than from money spent to
    attract new customers.
  • 5) Markets. A market is a set of actual and
    potential buyers who might transact with a
    seller.
  • VI. Marketing Management.
  • Marketing management is the analysis, planning,
    implementation, and control of programs designed
    to create, build, and maintain beneficial
    exchanges with target buyers for the purpose of
    achieving organizational objectives.
  • VII. Five Marketing Management Philosophies
  • 1) Production concept. The production concept
    holds that customers will favor products that are
    available and highly affordable, and therefore
    management should focus on production and
    distribution efficiency.

7
  • 2) Product concept. The product concept holds
    that customers prefer existing products and
    product forms, and the job of management is to
    develop good versions of these products.
  • 3) Selling concept. The selling concept holds
    that consumers will not buy enough of the
    organization's products unless the organization
    undertakes a large selling and promotion effort.
  • 4) Marketing concept. The marketing concept holds
    that achieving organizational goals depends on
    determining the needs and wants of target markets
    and delivering the desired satisfaction more
    effectively and efficiently than competitors.

5) Societal marketing concept. The societal
marketing concept holds that the organization
should determine the needs, wants, and interests
of target markets and deliver the desired
satisfactions more effectively and efficiently
than competitors in a way that maintains or
improves the consumer's and society's wellbeing.
8
Service Characteristics of Hospitality Tourism
Marketing
  • I. The Service Culture. The service culture
    focuses on serving and satisfying the customer.
    The service culture has to start with top
    management and flow down.
  • II. Four Characteristics of Services
  • 1) Intangibility. Unlike physical products,
    services cannot be seen, tasted, felt, heard, or
    smelled before they are purchased. To reduce
    uncertainty caused by intangibility, buyers look
    for tangible evidence that will provide
    information and confidence about the service.
  • 2) Inseparability. In most hospitality services,
    both the service provider and the customer must
    be present for the transaction to occur. Customer
    contact employees are part of the product.
    Inseparability also means that customers are part
    of the product. The third implication of
    inseparability is that customers and employees
    must understand the service delivery system.

9
  • 3) Variability. Service quality depends on who
    provides service and when and where they are
    provided. Services are produced and consumed
    simultaneously. Fluctuating demand makes it
    difficult to deliver consistent products during
    periods of peak demand. The high degree of
    contact between the service provider and the
    guest means that product consistency depends on
    the service provider's skills and performance at
    the time of the exchange.
  • 4) Perishability. Services cannot be stored. If
    service providers are to maximize revenue, they
    must manage capacity and demand since they cannot
    carry forward unsold inventory.
  • III. Management Strategies for Service Businesses
  • 1) Tangibilizing the service product. Promotional
    material, employees appearance, and the service
    firm's physical environment all help tangibilize
    service.
  • a) Trade dress. Trade dress is the distinctive
    nature of a hospitality industry's total visual
    image and overall appearance. To compete
    effectively, an entrepreneur, operator, or owner
    must design an effective trade dress while taking
    care not to imitate too closely that of a
    competitor.

10
  • b) Employee uniform and costumes. Uniforms and
    costumes are common to the hospitality industry.
    These have a legitimate and useful role in
    differentiating one hospitality firm from another
    and for instilling pride in the employees.
  • c) Physical surroundings. Physical surroundings
    should be designed to reinforce the product's
    position in the customer's mind. A firm's
    communications should also reinforce their
    positioning.
  • d) "Greening" of the hospitality industry. The
    use of outside natural landscaping and inside use
    of light and plants have become a widely used and
    popular method of creating differentiation and
    tangibilizing the product.

2) Managing employees. In the hospitality
industry, employees are a critical part of the
product and marketing mix. The human resource and
marketing department must work closely
together. a) Internal marketing. The task of
marketing to employees involves the effective
training and motivation of customer contact
employees and supporting service personnel.
11
  • 3) Managing perceived risk. The high risk that
    people perceive when purchasing hospitality
    products increases loyalty to companies that have
    provided them with a consistent product in the
    past.

4) Managing capacity and demand. Since services
are perishable, managing capacity and demand is a
key function of hospitality marketing. First,
services must adjust their operating systems to
enable the business to operate at maximum
capacity. Second, they must remember that their
goal is to create satisfied customers. Research
has shown that customer complaints increase when
service firms operate above 80 of their
capacity. 5) Managing consistency. Consistency
means that customers will receive the expected
product without unwanted surprises.
12
The Role of Marketing in Strategic Planning
  • I. The Aim of Strategic Planning. It helps a
    company select and organize its business in a way
    that keeps the company healthy despite unexpected
    upsets occurring in any of its specific business
    or product lines.
  • II. Three Ideas Define Strategic Planning
  • 1) Managing a company's business as an investment
    portfolio, for which it will be decided which
    business entities deserve to be built,
    maintained, phased down, or terminated.

2) Assessing accurately the future profit
potential of each business by considering the
market's growth rate and the company's position
and fit. 3) Underlying strategic planning is that
of strategy and developing a game plan for
achieving its long-run objective.
13
III. Four Major Organizational Levels
  • 1) Corporate level. The corporate level is
    responsible for designing a corporate strategic
    plan to guide the entire enterprise. It makes
    decisions on how much resource support to
    allocate to each division, as well as which
    businesses to start or eliminate.
  • 2) Division level. Each division establishes a
    division plan covering the allocation of funds to
    each business units strategic plan to carry that
    business unit within that division.

3) Business level. Each business unit in turn
develops its business units strategic plan to
carry that business unit into a profitable
future. 4) Product level. Each product level
within a business unit develops a marketing plan
for achieving its objectives in its product
market.
14
IV. Four Natures of High Performance Business
  • 1) Stakeholder. The principle that a business
    must at least strive to satisfy the minimum
    expectations of each stakeholder group.
  • 2) Processes. Companies build cross-functional
    teams that manage core business processes to be
    superior competitors.

3) Resources. Companies decide to outsource less
critical resources. They identify their core
competencies and use them as the basis for their
strategic planning. 4) Organization. Companies
align their organization's structure, policies,
and culture to the changing requirements of
business strategy.
15
V. Four Elements of Defining the Corporate
Mission.
  • A mission statement provides company employees
    with a shared sense of purpose, direction, and
    opportunity. The company mission statement guides
    geographically dispersed employees to work
    independently and yet collectively toward
    realizing the organizations goal.
  • 1) History. Every company has a history of aims,
    policies, and achievements, and the organization
    must not depart too radically from its past
    history.
  • 2) Consideration of the current preferences of
    the owner and management.
  • 3) The organizations resources determine which
    missions are possible.
  • 4) The organization should base its mission on
    its distinctive competencies.

16
VI. Mission Statement's Characteristic and
Focused Goals
  • 1) Industry scope. The range of industries that
    the company will consider.
  • 2) Products and application scope. The range of
    products and applications in which the company
    will participate.
  • 3) Competencies scope. The range of technological
    and other core competencies that the company will
    master and leverage.
  • 4) Market segment scope. The types of market or
    customers that the company will serve.
  • 5) Vertical scope. The number of channel levels
    from raw materials to final products and
    distribution in which the company will engage.
  • 6) Geographical scope. The range of regions or
    countries where the corporation will operate.

17
VII. Establishing Strategic Business Units.
  • Three dimensions in defining a businesss
    customer groups, customer needs, and technology.

VIII. Strategic Business Units (SBUs). An SBU is
a single business or collection of related
businesses that can be planned for separately
from the rest of the company. It has its own set
of competitors and a manager who is responsible
for strategic planning and profit
performance. IX. Boston Consulting Group Model
(BCG Model)
18
X. Planning New Businesses.
  • The strategic p1anning gap is the gap between
    future desired sales and projected sales. There
    are three ways to fill the gap
  • 1) Intensive growth opportunities. To identify
    further opportunities to achieve growth within
    the company's current business.
  • 2) Integrative growth opportunities. To identify
    opportunities to build or acquire businesses that
    are related to the company's current business.

a) Backward integration. A hotel company acquires
one of its suppliers. b) Forward integration. A
hotel company acquires a tour wholesaler or
travel agents. c) Horizontal integration. A hotel
company acquires one or more competitors,
provided that the government does not bar the
move.
19
  • 3) Diversification growth opportunities. To
    identify opportunities to add attractive
    businesses that are unrelated to the company's
    current businesses.
  • a) Concentric diversification strategy. Company
    seeks new products that have technological and or
    marketing synergies with existing product line,
    even though the product may appeal to a new class
    of customers.
  • b) Horizontal diversification strategy. Company
    searches for new products that could appeal to
    its current customers though technologically
    unrelated to its current product line.
  • c) Conglomerate diversification strategy. Company
    seeks new businesses that have no relationship to
    the company's current technology, product, or
    market.
  • XI. Business Strategy Planning
  • 1) Business mission. SBU defines its various
    scopes its products and applications,
    competence, market segments, vertical
    positioning, and geography. It must also define
    its specific goals and policies as a separate
    business.

20
  • 2) External environment analysis
  • a) Macro environment forces. Demographic,
    economic, technological. Political-legal.
    competition and social-cultural.
  • b) Microenvironment factors. Customers,
    competitors, distribution channels. suppliers.
  • c) Opportunities. A marketing opportunity is an
    area of need in which a company can perform
    profitably. Opportunities can be listed and
    classified according to their attractiveness and
    the success probability.
  • d) Threats. An environmental threat is a
    challenge posed by unfavorable trends or
    developments that would lead, in the absence of
    defensive marketing action, to sales or profit
    deterioration, Threats can be classified
    according to their seriousness and probability of
    occurrence.
  • 3) Internal environment analysis (strengths
    analysis and weaknesses analysis). Company
    reviews the business's marketing, financial,
    manufacturing, and organizational competencies.
    Each factor is rated as to whether it is a major
    strength, minor strength. neutral factor, major
    weakness, or minor weakness.

21
  • 4) Goal formulation (what do we want?) Four
    characteristics of an SBU's objectives
  • a) Hierarchical. The business unit should strive
    to arrange its objectives hierarchically, from
    the most to the least important.
  • b) Quantitative. Managers use the term goals to
    describe objectives that are specific with
    respect to magnitude and time.
  • c) Realistic. The levels should arise from an
    analysis of the business unit's opportunities and
    strengths, not from wishful thinking.
  • d) Consistent. Long-run market-share growth and
    high current profits, for example.
  • 5) Strategy formulation (How do we get there?)
    Michael Porter's three generic types of strategy
  • a) Overall cost leadership. The real key is for a
    firm to achieve the lowest costs among those
    competitors adopting a similar differentiation or
    focus strategy.
  • b) Differentiation. The firm cultivates strengths
    that will give it a competitive advantage in one
    or more benefits.
  • c) Focus. The firm gets to know the needs of
    these segments and pursues either cost leadership
    or a form of differentiation within the target
    segments.

22
  • 6) Program formulation. Supporting programs, such
    as running recruiting programs to attract the
    right employee, conducting training programs,
    developing leading-edge products and amenities,
    motivating the sales force, developing
    advertisements to communicate its service
    leadership.
  • 7) Implementation. To implement a strategy the
    firm must have the required resources, including
    employees with the skills needed to carry out the
    company's strategy.
  • 8) Feedback and control. The firm needs to track
    results and monitor new developments in the
    environment. The company will need to review and
    revise its implementation, programs, strategies.
    or even objectives.

23
The Marketing Environment
  • I. Microenvironment.
  • The microenvironment consists of actors and
    forces close to the company that can affect its
    ability to serve its customers. The actors in the
    microenvironment include the company, suppliers,
    market intermediaries, customers, and publics.
  • 1) The company. Marketing managers work closely
    with top management and the various company
    departments.
  • 2) Suppliers. Firms and individuals that provide
    the resources needed by the company to produce
    its goods and services.
  • 3) Marketing intermediaries. Firms that help the
    company promote, sell, and distribute its goods
    to the final buyers.
  • 4) Transportation system. The system moves the
    product from the factory, to the customer. The
    hospitality industry depends on transportation
    systems to move supplies and customers to their
    businesses.
  • 5) Marketing services agencies. Marketing
    research firms, advertising agencies, media
    firms, and marketing consulting firms help
    companies to target and promote their products to
    the right market.

24
  • 6) Financial intermediaries. Includes hanks,
    credit companies, insurance companies, and other
    firms that help hospitality companies to finance
    their transactions or insure risks associated
    with the buying and selling of goods and services.

Microenvironment
Macroenvironment
25
II. Macroenvironment.
  • The macroenvironment consists of the larger
    societal farces that affect the whole
    microenvironment demographic, economic, natural,
    technological, political, competitor, and
    cultural forces. Following are the seven major
    forces in a companys macroenvironment.
  • 1) Competitive environment. Each firm must
    consider its size and industry position in
    relation to its competitors. A company must
    satisfy the needs and wants of consumers hetter
    than its competitors do in order to survive.
  • 2) Demographic environment. Demography is the
    study of human populations in terms of size,
    density, location, age, sex, race, occupation,
    and other statistics. The demographic environment
    is of major interest to marketers because markets
    are made up of people.
  • 3) Economic environment. The economic environment
    consists of factors that affect consumer
    purchasing power and spending patterns. Markets
    require both power as well as people. Purchasing
    power depends on current income, price, saving,
    and credit marketers must he aware of major
    economic trends in income and changing consumer
    spending patterns.

26
  • 4) Natural environment. The natural environment
    consists of natural resources required by
    marketers or affected by marketing activities.
  • 5) Technological environment. The most dramatic
    force shaping our destiny today is technology.
  • 6) 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.

7) Cultural environment. The cultural environment
includes institutions and other forces that
affect society's basic values, perceptions,
preferences, and behaviors. III. Responding to
the Marketing Environment. Many companies view
the marketing environment as an uncontrollable
element to which they must adapt. Other companies
take an environmental management perspective.
Rather than simply watching and reacting, these
firms take aggressive actions to affect the
publics and forces in their marketing
environment. These companies use environmental
scanning to monitor the environment.
27
Marketing Information Systems Marketing Research
  • The Marketing Information System (MIS). A MIS
    consists of people, equipment, and procedures to
    gather, sort, analyze, evaluate, and distribute
    needed, timely, and accurate information to
    marketing decision maker The MIS begins and ends
    with marketing managers, hut managers throughout
    the organization should he involved in the MIS.
    First, the MIS interacts with managers to assess
    their information needs. Next, it develops needed
    information from internal company records,
    marketing intelligence activities, and the
    marketing research process. Information analysts
    process information to make it more useful.
    Finally, the MIS distributes information managers
    in the right form and at the right time to help
    in marketing planning, implementation, and
    control.

28
I. Assessing Information Needs.
  • A good marketing information system balances
    information that managers would like to have
    against that which they really need and is
    feasible to obtain.
  • II. Developing Information.
  • Information needed by marketing managers can be
    obtained from internal company records, marketing
    intelligence, and marketing research. The
    information analysis system processes this
    information and presents it in a form that is
    useful to managers.
  • 1) Internal records. Internal records information
    consists of information gathered from sources
    within the company to evaluate marketing
    performance and to detect marketing problems and
    opportunities.
  • 2) Marketing intelligence. Marketing intelligence
    includes everyday information about developments
    in the marketing environment that help managers
    to prepare and adjust marketing plans and
    short-run tactics. Marketing intelligence can
    come from internal sources of external sources.

29
  • a) Internal sources. Internal sources include the
    companys executives owners, and employees.
  • b) External sources. External sources include
    competitors. government agencies, suppliers,
    trade magazines. newspapers, business magazines,
    trade association newsletters and meetings. and
    databases available on the Internet.
  • c) Marketing research. Marketing research is a
    process that identifies and defines marketing
    opportunities and problems, monitors and
    evaluates marketing actions and performance, and
    communicates the findings and implication to
    management. Marketing research is project
    oriented and has a beginning and an ending. It
    feeds information into the marketing information
    system that is ongoing. The marketing research
    process consists of four steps defining the
    problem and research objectives, developing the
    research plan. implementing the research plan,
    and interpreting and presenting the findings.
  • i) Defining the problem and research objectives.
    There are three types of objectives for a
    marketing research project
  • a) Exploratory to gather preliminary information
    that will help define the problem and suggest
    hypotheses.
  • b) Descriptive to describe the size and
    composition of the market.
  • c) Causal to test hypotheses about
    cause-and-effect relationships.

30
  • ii) Developing the research plan for collecting
    information
  • a) Determining specific information needs.
    Research objectives must be translated into
    specific information needs. To meet a manager's
    information needs, researchers can gather
    secondary data, primary data, or both. Secondary
    data consist of information already in existence
    somewhere, having been collected for another
    purpose. Primary data consist of information
    collected for the specific purpose at hand.
  • b) Research approaches. Three basic research
    approaches are observations, surveys, and
    experiments.
  • i) Observational research. Gathering of primary
    data by observing relevant people, action, and
    situations.
  • ii) Survey research (structured unstructured,
    direct/indirect). Best suited to gathering
    descriptive information.
  • iii) Experimental research. Best suited to
    gathering causal information.
  • c) Contact methods. Information can be collected
    by mail, telephone, or personal interview.
  • d) Sampling plan. Marketing researchers usually
    draw conclusions about large consumer groups by
    taking a sample. A sample is a segment of the
    population selected to represent the population
    as a whole. Designing the sample calls for three
    decisions.
  • i) Who will be surveyed?
  • ii) How many people should be surveyed?
  • iii) How should the sample be chosen?
  • e) Research instruments. In collecting primary
    data, marketing researchers have a choice of
    primary research instruments the interview
    (structured and unstructured), mechanical
    devices, and structured models such as a test
    market. Structured interviews employ the use of a
    questionnaire.
  • f) Presenting the research plan. At this stage
    the marketing researcher should summarize the
    plan in a written proposal.

31
  • iii) Implementing the research plan. The
    researcher puts the marketing research plan into
    action by collecting, processing, and analyzing
    the information.
  • iv) Interpreting and reporting the findings. The
    researcher must now interpret the findings, draw
    conclusions, and report then to management.
  • d) Information analysis. Information gathered by
    the company's marketing intelligence and
    marketing research systems can often bend from
    additional analysis. This additional analysis
    helps to answer to questions related to what if
    and which is best.
  • III. Distributing Information.
  • Marketing information has no value until managers
    use it to make better decisions. The gathered
    information must reach the marketing managers at
    the right time.

32
Consumer Markets Consumer Buying Behavior
  • I. Model of Consumer Behavior.
  • The company that really understands how consumers
    will respond to different product features,
    prices, and advertising appeals has a great
    advantage over its competitors. As a result,
    researchers from companies and universities have
    heavily studied the relationship between
    marketing stimuli and consumer response. The
    marketing stimuli consist of the four Ps
    product, price, place, and promotion. Other
    stimuli include major forces a events in the
    buyer's environment economic, technological,
    political, and cultural. All these stimuli enter
    the buyer's black box, where they are turned into
    a set of observable buyer responses product
    choice, brand choice, dealer choice, purchase
    timing, and purchase amount.

33
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34
II. Personal Characteristics Affecting Consumer
Behavior
  • 1) Cultural factors
  • a) Culture. Culture is the most basic determinant
    of a persons wants and behavior. It compromises
    the basic values, perceptions, wants, and
    behaviors that a person learns continuously in a
    society.
  • b) Subculture. Each culture contains smaller
    subcultures, groups people with shared value
    systems based on common experiences a situations.
  • c) Social classes. These are relatively permanent
    and ordered divisions in a society whose members
    share similar values, interests, and behaviors.
    Social class in newer nations such as the United
    States, Canada, Australia, and New Zealand is not
    indicated by a single factor such as income, hut
    is measured as a combination of occupation,
    source of income, education, wealth, and other
    variables.
  • 2) Social factors
  • a) Reference groups. These groups serve as direct
    (face-to-face) or direct point of comparison or
    reference in the forming of a person's attitude
    and behavior.
  • b) Family. Family members have a strong influence
    on buyer behavior. The family remains the most
    important consumer-buying organization in
    American society.

35
  • c) Roles and status. A role consists of the
    activities that a person is expected to perform
    according to the persons around him or her. Each
    role carries a status reflecting the general
    esteem given to it by society. People often
    choose products that show their status in
    society.
  • 3) Personal factors
  • a) Age and life-cycle stage. The types of goods
    and services people buy change during their
    lifetimes. As people grow older and mature, the
    products they desire change. The makeup of the
    family also affects purchasing behavior. For
    example, families with young children dine not at
    fast-food restaurants.
  • b) Occupation. A person's occupation affects the
    goods and services bought.
  • c) Economic situation. A person's economic
    situation greatly affects product choice and the
    decision to purchase a particular product.
  • d) Lifestyle. Lifestyles profile a person's whole
    pattern of acting and interacting in the world.
    When used carefully, the lifestyle concept can
    help the marketer understand changing consumer
    values and how they effect buying behavior.

36
  • e) Personality and self-concept. Each persons
    personality influences his or her buying
    behavior. By personality we mean distinguishing
    psychological characteristics that disclose a
    persons relatively individualized, consistent,
    and enduring responses to the environment. Many
    marketers use a concept related to personality a
    person's self-concept (also called self-image).
    Each of us has a complex mental self-picture, and
    our behavior tends to be consistent with that
    self-image.
  • 4) Psychological factors
  • a) Motivation. A need becomes a motive when it is
    aroused to a sufficient level of intensity.
    Creating a tension state causes a person to act
    to release the tension.
  • b) Perception. Perception is the process by which
    a person selects, organizes, and interprets
    information to create a meaningful picture of the
    world.
  • c) Learning. Learning describes changes in a
    person's behavior arising from experience.
  • d) Beliefs and attitudes. A belief is a
    descriptive thought that a person holds about
    something. An attitude describes a person's
    relatively consistent evaluations, feelings, and
    tendencies toward an object or an idea.

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III. Consumer Involvement in the Buying Decision.
  • A marketer needs to know which people are
    involved in the buying decision and what role
    each person plays. Identifying the decision maker
    in many transactions is fairly easy. People might
    play any of several roles in a buying decision
  • 1) Initiator. The person who first suggests or
    thinks of the idea of buying a particular product
    or service.

2) Influencer. A person whose views or advice
carries some weight in making the final buying
decision. 3) Decider. The person who ultimately
makes a buying decision or any part of
it. 4) Buyer. The person who makes an actual
purchase. 5) User. The person who consumes or
uses a product or service.
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IV. Purchasing Decision Process
  • 1) Problem recognition. The buying process starts
    when the buyer recognizes a problem or need.
  • 2) Information search. An aroused consumer may or
    may not search for more information. How much
    searching a consumer does will depend on the
    strength of the drive, the amount of initial
    information, the ease of oh-taming more
    information. the value placed on additional
    information, and the satisfaction one gets from
    searching.
  • 3) Evaluation of alternatives. Unfortunately,
    there is no simple and single evaluation process
    used by all consumers or even by one consumer in
    all buying situations. There are several
    evaluation processes.
  • 4) Purchase decision. In the evaluation stage,
    the consumer ranks brands in the choice set and
    forms purchase intentions. Generally, the
    consumer will buy the most preferred brand.
  • 5) Postpurchase behavior. The marketer's job does
    not end when the customer buys a product.
    Following a purchase, the consumer will be
    satisfied or dissatisfied and will engage in
    Postpurchase actions of significant interest to
    the marketer.

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Organizational Buyer Behavior of Group Market
  • I. The Nature of Organizational Buyers.
  • Their purchases often involve large sums of
    money, complex technical, economic
    considerations, and interactions among many
    people at all levels of the organization. Buyer
    and seller are often very dependent on each
    other.
  • II. Participants in the Organizational Buying
    Process
  • 1) Users. Users are those who will use the
    product or service.
  • 2) Influencers. Influencers directly influence
    the buying decision but do not themselves make
    the final deci5ion.
  • 3) Deciders. Deciders select product requirements
    and suppliers.
  • 4) Approvers. Approvers authorize the proposed
    actions of deciders or buyers.
  • 5) Buyers. Buyers have formal authority for
    selecting suppliers and arranging the terms of
    purchase.
  • 6) Gatekeepers. Gatekeepers have the power to
    prevent sellers or information from reaching
    members of the buying center.

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III. Major Influences on Organizational Buyers
  • 1) Environmental factors. Organizational buyers
    are heavily influenced by the current and
    expected economic environment.
  • 2) Organizational factors. Each organization has
    specific objectives, policies, procedures,
    organizational structures, and systems related to
    buying.
  • 3) Interpersonal factors. The buying center
    usually includes several participants with
    differing levels of interest, authority, and
    persuasiveness.
  • 4) Individual factors. Each participant in the
    buying decision process has personal motivations,
    perceptions, and preferences. The participant's
    age. income, education, professional
    identification, personality, and attitudes toward
    risk all influence the participants in the buying
    process.

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IV. The Organizational Buying Process
  • 1) Problem recognition. The buying process begins
    when someone in the company recognizes a problem
    or need that can be met by acquiring a good or a
    service.
  • 2) General need description. The buyer goes on to
    determine the requirements of the product.
  • 3) Product specifications. Once the general
    requirements have been determined, the specific
    requirements for the product can be developed.
  • 4) Supplier search. The buyer now tries to
    identify the most appropriate suppliers.
  • 5) Proposal solicitation. Qualified suppliers
    will be invited to submit proposals. Skilled
    research, writing, and presentation are required.
  • 6) Supplier selection. Once the meeting planner
    has drawn up a short list of suppliers, qualified
    hotels will be invited to submit proposals.
  • 7) Order-routine specification. The buyer writes
    the final order, listing the technical
    specification. The supplier responds by offering
    the buyer a formal contract.
  • 8) Performance review. The buyer does
    postpurchase evaluation of the product. During
    this phase the buyer will determine if the
    product meets the buyers specifications and if
    the buyer will purchase from the company again.

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V. The Group Markets Segments
  • 1) Conventions. Conventions are usually the
    annual meeting of an association and include
    general sessions, committee meetings, and
    special-interest sessions. A trade show is often
    an important part of an annual convention.
  • 2) Association meetings. Associations sponsor
    many types of meeting including regional.
    Special-interest, educational, and board
    meetings.
  • 3) Corporate meetings. A corporate meeting is a
    command performance for employees of a company.
    The corporation's major concern is that the
    meeting be productive and accomplish the
    company's objectives.
  • 4) Small groups. Meetings of less than 50 rooms
    are gaining the attention of hotels and hotel
    chains.
  • 5) Incentive travel. Incentive travel, a unique
    subset of corporate group business, is a reward
    participants receive for achieving or exceeding a
    goal.
  • 6) SMERF groups. SMFRF stands for social,
    military, educational, religious, and fraternal
    organizations. This group of specialty markets
    has a common price sensitive thread.

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VI. Dealing with Meeting Planners.
  • When negotiating with meeting planners, it is
    important to try to develop a win-win
    relationship. Meeting planners like to return to
    the same property.
  • VII. The Corporate Account and Travel Manager.
  • A nongroup form of organizational business is the
    individual business traveler. Most hotels offer a
    corporate rate, which is intended to provide an
    incentive for corporations to use the hotel.

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Market Segmentation, Targeting, and Positioning
  • I. Market. A market is the set of all actual and
    potential buyers of a product
  • II. The Target Marketing Process involves three
    steps market segmentation, market targeting, and
    positioning.
  • 1) Market segmentation is the process of dividing
    a market into distinct groups of buyers who might
    require separate products and/or marketing mixes.
  • 2) Market targeting is the process of evaluating
    each segments attractiveness and selecting one
    or more of the market segments.
  • 3) Positioning is the process of developing a
    competitive positioning for the product and an
    appropriate marketing mix.

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III. Market Segmentation
  • 1) Bases for segmenting a market. There is no
    single way to segment a market. A marketer has to
    try different segmentation variables, alone and
    in combination.
  • a) Geographic segmentation calls for dividing the
    market into different geographic units, such as
    nations, states, regions, counties, cities or
    neighborhoods.
  • b) Demographic segmentation consists of dividing
    the market it groups based on demographic
    variables such as age, gender, family life cycle,
    income, occupation, education, religion, race,
    and nationality.
  • c) Psychographic segmentation divides buyers into
    different groups based on social class,
    lifestyle, and personality characteristics.
  • d) Behavior segmentation divides buyers into
    groups based on be knowledge, attitude, use, or
    response to a product.
  • 2) Requirements for Effective Segmentation
  • a) Measurability the degree to which the
    segments size and purchasing power can be
    measured.
  • b) Accessibility the degree to which segments
    can be accessed and served
  • c) Substantiality the degree to which segments
    are large or profitable enough to serve as
    markets.
  • d) Actionability the degree to which effective
    programs can be d signed for attracting and
    serving segments.

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IV. Evaluating Market Segments
  • 1) Segment size and growth. Companies will
    analyze the segment size and growth and choose
    the segment that provides the best opportunity.
  • 2) Segment structural attractiveness. A company
    must examine major structural factors that effect
    long-run segment attractiveness.
  • 3) Company objectives and resources. The company
    must consider its own objectives and resources in
    relation to a market segment.
  • V. Selecting Market Segments.
  • Segmentation reveals market opportunity available
    to a firm. The company then selects the most
    attractive segment or segments to serve as
    targets for marketing strategies to achieve
    desired objective
  • 1) Market-coverage alternatives
  • a) Undifferentiated marketing strategy. An
    undifferentiated marketing strategy ignores
    market segmentation differences and goes after
    the whole market with one market offer.
  • b) Differentiated marketing strategy. The firm
    targets several market segments and designs
    separate offers for each.

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  • c) Concentrated marketing strategy. Concentrated
    marketing strategy is especially appealing to
    companies with limited resources. Instead of
    going for a small share of a large market, the
    firm pursues a large share of one or more small
    markets.
  • 2) Choosing a market-coverage strategy. Companies
    need to consider several factors in choosing a
    market-coverage strategy.
  • a) Company resources. When the company's
    resources are limited, concentrated marketing
    makes the most sense.
  • b) Degree of product homogeneity.
    Undifferentiated marketing is more suited for
    homogeneous products. Products that can vary in
    design, such as restaurants and hotels, are more
    suited to differentiation or concentration.
  • c) Market homogeneity. If buyers have the same
    tastes, buy a product in the same amounts, and
    react the same way to marketing efforts,
    undifferentiated marketing is appropriate.
  • d) Competitors strategies. When competitors use
    segmentation, undifferentiated marketing can be
    suicidal. Conversely, when competitors use
    undifferentiated marketing, a firm can gain an
    advantage by using differentiated or concentrated
    marketing.

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VI. Market positioning.
  • A product's position is the way the product is
    defined by consumers on important attributes--the
    place the product occupies in consumers minds
    relative to competing products.
  • 1) Positioning strategies
  • a) Specific product attributes. Price and product
    features can be used to position a product.
  • b) Needs products fill or the benefits they
    offer. Marketers can position products by the
    needs that they fill or the benefits that they
    offer. For example, a restaurant can be
    positioned as a fun place.
  • c) Certain classes of users. Marketers can also
    position for certain classes of users, such as a
    hotel advertising itself as a womens hotel.
  • d) Against an existing competitor. A product can
    be positioned against an existing competitor. In
    the "Burger Wars," Burger King used its
    flame-broiled campaign against McDonald's,
    claiming that people prefer flame-broiled burgers
    over fried burgers.

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  • 2) Choosing and implementing a positioning
    strategy. The positioning task consists of three
    steps identifying a set of possible competitive
    advantages upon which to build a position,
    selecting the right competitive advantages, and
    effectively communicating and delivering the
    chosen position to a carefully selected target
    market.
  • 3) Communicating and delivering the chosen
    position. Once having chosen positioning
    characteristics and a positioning statement, a
    company must communicate their position to
    targeted customers. All of a company's marketing
    mix efforts must support its positioning strategy.

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Designing and Managing Products
  • I. 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 objects, service, places,
    organizations, and ideas.
  • II. Product Levels
  • 1) Core product answers the question of what the
    buyer is really buying. Every product is a
    package of problem-solving services.
  • 2) Facilitating products are those services or
    goods that must be present for the guest to use
    the core product.
  • 3) Supporting products are extra products offered
    to add value to core product and to help to
    differentiate it from the competition.
  • 4) Augmented products include accessibility
    (geographical location hours of operation),
    atmosphere (visual, aural, olfactory, and tactile
    dimensions), customer interaction with the
    service organization (joining, consumption, and
    detachment), customer participation, and
    customers' interactions with each other.

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III. Product Considerations
  • 1) Accessibility. This refers to how accessible
    the product is in term. location and hours of
    operation.
  • 2) Atmosphere. Atmosphere is a critical element
    in services. It is appreciated through the
    senses. Sensory terms provide descriptions for
    the atmosphere as a particular set of
    surroundings. The main sensory channels for
    atmosphere are sight, sound, scent, and touch.
  • 3) Customer interactions with the service system.
    Managers must
  • tbink about how the customers use the product in
    the three phases of involvement joining,
    consumption, and detachment.
  • 4) Customer interactions with other customers.
    Customers become part of the product you are
    offering.
  • 5) Participation. Involving the guest in service
    delivery can increase capacity, improve customer
    satisfaction, and reduce costs.

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IV. Reasons Companies Use Brands and Identify the
Major Branding Decisions.
  • Brand is a name, term, sign, symbol. Design, or a
    combination of these elements that is intended to
    identify the goods or services of a seller and
    differentiate them from those of competitors.
  • 1) Conditions that support branding
  • a) The product is easy to identify by brand
    or trademark.
  • i) It should suggest something about the
    products benefits and qualities.
  • ii) It should be easy to pronounce,
    recognize, and remember.
  • iii) It should be distinctive.
  • iv) For larger firms looking at future expansion
    into foreign markets, the na
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