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MARKETING - PLANNING Presented by Dr. Ben Dewald The Collins School of ... Personal Selling Personal selling deals with customers on a direct or face-to-face basis. – PowerPoint PPT presentation

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  • Presented by
  • Dr. Ben Dewald
  • The Collins School of
  • Hospitality Management

  • Marketing
  • The 4 Ps
  • The 7 Ps
  • Promotion strategy
  • People strategy
  • Physical evidence strategy
  • Process strategy

  • Organizations use marketing to develop and sell
    their products and services.
  • Most firms have a marketing department that
    carries out the functions of marketing.
  • How to market products and services.
  • The main emphasis is on the marketing mix which
    is the specific combination of interrelated and
    interdependent marketing activities that an
    organization does to achieve its objectives.
  • When we think of the marketing mix we often think
    of the four Ps.
  • These are sometimes called the controllable
    variables because they can be manipulated by

The 4Ps
Source Adapted from McDonald (1999)
Product Developing objectives and policies for product additions, modifications and deletions. Deciding on what core product and supplementary services to offer. Resolving issues such as what design, branding and positioning to use.,
Price Developing objectives and pricing policies to be used for product groups in market segments.
Place Developing objectives and policies for channels of distribution, Resolving location issues.
Promotion Developing objectives and policies for communication with customers. Resolving issues concerning advertising, publicity, personal selling, sales promotion, public relations and direct marketing
The 7Ps
  • However the 4Ps have been much debated and
    extended to include other elements. We shall
    follow Cowell's (1984) approach which is to
    consider services to have seven elements in the
    marketing mix (i.e. 7Ps).
  • Product
  • Price
  • Place
  • Promotion
  • People
  • Physical evidence
  • Process

The Additional Ps
Source Adapted from McDonald (1999) Cowell
People Developing objectives and policies in relation to behavior, attitudes, and interpersonal selling skills in service delivery.
Physical evidence Developing objectives and policies for the physical environment, facilitating goods and other tangible clues.
Process Developing objectives and policies for the processes, mechanisms and routines used to create and deliver service.
Marketing Mix
  • Remember that by adapting the marketing mix
    elements, you can develop a marketing program
    that achieves your objectives.
  • The marketing mix elements will often alter as a
    product-market changes, and a business continues
    to look for ways to be successful.
  • Here we will look at promotion, people, physical
    evidence and process.

  • Topic 1 Promotion Strategy
  • Examine the communications process and describe
    the two parties that are involved, the sender
    (usually the business) and the audience (the
  • 6 promotional tools that restaurants can use in a
    promotion strategy advertising, publicity,
    direct marketing communications, sales promotion,
    personal selling and public relations,
  • Topic 2 People Strategy
  • Employees of service businesses
  • The service encounter and the role of internal
  • Customers and their 3 roles as producers of
    services, as users of services, and as an
    influence on other customers.
  • Topic 3 Physical Evidence Strategy
  • We look at how a servicescape includes the
    physical environment and the atmosphere of an
  • 3 ways that buyer behavior is affected by the
    look and feel of the environment and image a
    business creates.
  • Topic 4 Process Strategy
  • We examine what a service process is and at why
    managers need to think about complexity and
    divergence in service processes.

Your Objectives
  1. Distinguish between the six promotional tools
    that can be used in a promotion strategy. Comment
    on how each can be used by hospitality/tourism
    businesses to communicate with customers (and
    potential customers).
  2. Define the term 'service encounter' and explain
    why service personnel are particularly important
    in restaurant businesses.
  3. Describe the purpose of internal marketing for
    hospitality businesses and how this relates to
    the development of a people strategy.
  4. Briefly explain the three levels that marketing
    professionals can use to consider customers when
    they develop a people strategy.
  5. Define the term 'servicescape' and describe three
    ways that buyer behavior is affected by physical
    evidence and atmosphere. Comment on why
    hospitality/tourism businesses should develop a
    physical evidence strategy.
  6. Explain how operations management and marketing
    management come together to develop a process
    strategy for hospitality/tourism businesses.
  7. Distinguish between process complexity and
    process divergence and explain briefly how they
    relate to improving service quality as part of a
    process strategy.

Who is your Customer?
  • University related
  • Business
  • Pleasure
  • Tourist
  • Age group
  • Income
  • Track reservations walk-ins.
  • Share information (by email) with other Groups.
  • See where you are up or down.

4. Promotion Strategy
  • As Cravens et al (2000) forcefully tell us
  • "Marketing communications are essential to
    marketing strategy. Without it, sales would not
    be transacted, prospective buyers may not ever
    become aware of, let alone sufficiently
    interested to search out and buy, the goods and
    services that we have to offer them."
  • (Cravens et al. 2000 p227)

The Communication Process
  • The objective of communication is to get a
    response from the audience.
  • In marketing this usually means getting customers
    to try, and then repurchase the brand (to become
    adopters) Regulars
  • Marketing communications can also be used to
    build customer loyalty.

Promotional Tools
  • Your challenge is determining who is the target
    audience, deciding what needs to be communicated
    and formulating the mixture of tools that will
    best suit these objectives.
  • You than have to plan a promotional strategy and
    budget each component before launching their

  • Defined as any non-personal form of communication
    through a designated paid medium with an
    identifiable sponsor. Media included but limited
    to television and radio broadcasting, newspaper
    and magazine, transits, outdoors and others.
  • Most advertisements aim to persuade customers
    that the product or service will meet their needs
    and offer them value.

Advertising 2
  • It is important to be clear about the objectives
    of advertising (as it can be very expensive) and
    to develop an appropriate message. It is also
    important to have a carefully calculated budget.
  • Then it is necessary to select the media to be
    used. Typically the choice is between television,
    radio, press, magazines or outdoor billboards.
    Recently the Internet has offered another media
    option - banner advertising. Each of the
    different broad choices of media have different
    characteristics (coverage, frequency and impact).

Timing in Relation to Advertising
  • Continuous - this is useful if the product-market
    is growing and the I business is trying to
    attract new buyers. It is also often used when
    advertising frequently purchased products.
  • Concentrated - for example just advertising at a
    certain time of the year.
  • Flighting - running advertisements from time to
    time. In between having none. This is done when
    the budget is small and for infrequently
    purchased products.
  • Pulsing - using periods of low-cost advertising
    reinforced with occasional bursts of expensive
    advertising. This is typical for strong, mature
  • Seasonality - in response to the seasonality of
    the product and its selling cycle, advertising
    activities and budget have to be adjusted
    accordingly to maximize the yield and return.

  • Publicity is free advertising.
  • A business may have to do something to attract
    attention, but they do not pay for the media
    exposure they receive. It can be very beneficial
    (and cost effective) and has the benefit of
    enhanced credibility because it does not appear
    to be advertising.
  • Publicity can be negative as well as positive.
  • It is also less controllable than other aspects
    of marketing communication.

Public Relations
  • Public relations are activities that the business
    undertakes to communicate to the public which are
    not paid for directly.
  • The public can include customers, the trade,
    shareholders, government bodies, local
    communities and employees.
  • According to Doyle (1994) the major public
    relations activities are
  • achieving positive coverage in the media
  • creating and reinforcing the corporate image .
    sponsoring special events
  • lobbying politicians and officials and
  • advising management about key public issues.

Public Relations
  • Large businesses find public relations a useful
    marketing tool, and one that is cheaper and more
    effective than advertising.
  • Public relations can create product awareness and
    interest. It can influence specific target market
    segments and enhance corporate image. It can be
    useful when dealing with crises (such as food
    contamination scares).

Direct Marketing Communications
  • Direct mail and telesales are examples of direct
    marketing communications.
  • They are sometimes called direct marketing or
    direct response marketing.
  • Direct mail (brochures, letters and catalogues)
    is usually received through the post, whereas
    telesales are received via the telephone.
  • More recently fax and e-mail have been used to
    send direct communications.

Will you do you do any of these?
Direct Communications vs. Advertising
  • It usually targets named individual customers,
    rather than operating indirectly through a mass
    medium (like newspapers or television).
  • It normally aims at an immediate response, rather
    than an increase in awareness of positive
    feelings about a brand.
  • Customers buy direct rather than through an
    intermediary (a salesperson or agent).

  • Direct communications rely on a good database of
    customers that should be targeted. Some companies
    buy databases from research agencies.
  • With technology advances it is becoming
    increasingly common for businesses to build their
    own from their records of the activities of
    existing customers.
  • For a business it is relatively low cost and
    efforts can be precisely targeted. It may also
    allow for some degree of customization.

Sales Promotion
  • Sales promotions give customers an economic
    incentive to buy.
  • These incentives are often in the form of price
    reductions, free goods or the chance to win

3 Types of Sales Promotions
  • Consumer promotions - price reductions, coupons,
    vouchers, competitions, free goods, premium
    offers, trade-in offers, stamps, guarantees,
    events and displays.
  • Trade promotions - dealer loaders, loyalty
    bonuses, sale or return, range bonuses, credit,
    delayed invoicing, new product offers,
    competitions, trade-in offers, free services,
    training and reciprocal buying.
  • Sales force promotions - bonuses, commissions,
    coupons, free gifts, competitions, vouchers, free
    services, points and money equivalents.
  • Doyle (1994)

Sales Promotions
  • Sales promotions can be targeted quite carefully
    and can be used flexibly.
  • They can be used to manipulate or shift demand,
    to encourage greater volume or frequency of
    purchasing, to add value to a product or service
    offering and to reward customer loyalty.
  • Sales promotions are popular with businesses but
    are usually used to support other promotional
  • Sales promotion campaigns may have a limited
    life-span, and not be re-used. The development
    costs must therefore be carefully assessed.

Coupons and Discount Cards
  • McDonalds - coupon campaign in May 2000 offering
    85 food combinations for 16.
  • Watsons Wine Cellar - coupon offer in May 2000
    with 3 discount on selected wines with purchases
    over 30.
  • Tony Romas - ongoing lucky draw promotions and
    other privileges to diners such as a appetizer
    coupon and a 5 cash coupon.
  • Koublai's group - privilege card offering 25
    discount for cash at lunchtime and 15 at dinner.
    Credit card purchases discounts of 20 and 10

Your Thoughts
  • Think about your own use of coupons and discount
  • Do they tempt you to try new places/new products?
  • Do they encourage your loyalty?

What About
  • RKR-Club-Card for a price allowing the customer
    to eat for free with another guest for a
    specified time period.
  • Cards for Concierges and/or other hotel/tourism
    personnel who assist guests in making restaurant
  • Take away menus.
  • Sales Blitzes using Cal Poly Students
  • ...

Personal Selling
  • Personal selling deals with customers on a direct
    or face-to-face basis.
  • Personal selling allows two-way communication
    between buyers and sellers.
  • The business can investigate the needs of the
  • It generally has more flexibility in adjusting
    its offer and can alter the way its
    products/services are presented to meet those
  • Relationship Marketing vs. Hard sell.

ExercisePromotional Tools
Promotion Summary
  • Promotion (marketing communications) is essential
    to marketing strategy.
  • In the promotion strategy, there is an integrated
    mix of promotional tools that are designed to be
    effective at reaching the target market(s), that
    sustain the positioning strategy and that are
    cost effective.
  • Objectives must be set carefully for the whole
    promotional campaign, and for each component of
    the mix.

5. People Strategy
  • Employees are service personnel.
  • Service encounter and the role of internal
  • Customers have three roles
  • Producers of services,
  • Users of services,
  • Influence on other customers.

  • Employees
  • Customers contact
  • Essential in production and delivery of services.
  • Increasingly seen as part of the differentiation
    by which companies try to create added value and
    gain competitive advantage.
  • Customers
  • Customer-customer interactions occur.
  • Customer's perceptions of the quality of a
    service product may be influenced by other
    customers (the behavior of other diners in a
  • The customer- customer relationship can be very
    difficult to manage.

Service Personnel
  • In the foodservice industry we are aware of the
    importance of good service personnel and how they
    'sell' the products/services as much as formal
    sales staff do.
  • Service personnel are trained to do their job
    efficiently and effectively - they are usually
    also trained to have a strong customer
  • This in turn reflects the image of your

Internal Marketing
  • The success of marketing a service is tied
    closely to the selection, training, motivation
    and management of people.
  • "an important activity in, contributing to the
    people element of the marketing mix and in
    developing a customer-focused organization."
  • (Payne 1993 p167)

  • Cowell (1984) indicates that service marketing
    professionals have to think about customers in
    three levels. These are as
  • producers of services,
  • users of services and
  • an influence on other customers.

Customers as Producers of Services
  • Because customers go to the service facility,
    many service businesses develop multi-site
    operations. Each site has a limited geographic
    area from which to draw customers.
  • This can result in difficulties achieving uniform
    service standards.
  • For example chain restaurants may have identical
    menus but customers may use whichever is most
    convenient (in terms of location) at the time.
    They may have different meal experiences
    according to which of the chain restaurants they
  • This is called called this heterogeneity

Customers as Users of Services
  • The customer needs are translated into a set of
    desired attributes like
  • Security (e.g. service reliability)
  • Consistency (e.g. reliability of reactions)
  • Attitude (e.g. interpersonal reactions)
  • Completeness (e.g. array of services provided)
  • Condition (e.g. 'atmosphere' of the service
  • Availability (e.g. the ease of access in terms of
    time or location) and
  • Timing (e.g. length of time required for

Customers as Users of Services
  • Competitors also offer services with a range of
    attributes, all of which are communicated in a
    variety of ways.
  • They are perceived and judged by consumers who
    then make a choice about what to buy.
  • You have to consider the message you give and the
    complex buying behavior of your target customers.

Customers as an Influence on other Customers
  • Cowell (1984) comments that this is an area that
    is often overlooked by marketing professionals.
  • He notices that particularly during group
    services the interaction between customers may be
    significant in affecting their perceptions of
    product/service quality.
  • At present the nature of these interactions is
    only implicitly recognized by marketing

Define People Strategy
  • A people strategy is deciding how staff behavior,
    attitudes and interpersonal skills are to be
    directed to sustain the positioning of the
  • This may involve consideration of customer

Consider when developing a People Strategy
  • Recognize whether the service business has high-
    or low-contact service encounters
  • Understand the value of internal marketing and
    work w/ HR
  • Have clear view about how the service element of
    the product contributes to a sustainable
    competitive advantage.

6. Physical Evidence Strategy
  • A physical evidence strategy is used to shape the
    image of a business and its services.
  • There are things that managers can control that
    have a direct impact on customer perceptions.
  • Physical evidence relates to buildings,
    furnishings, layout, color and lighting.
  • It also includes the goods associated with the
    service like tickets and brochures.

Physical Evidence
  • The physical environment includes the
    furnishings, color, layout and noise level.
  • The facilitating goods are things that enable the
    service to be provided - for example, the
    chinaware used in your grill rooms.
  • Other tangible clues are the 'packaging' of
    take-away food.

  • Lovelock and Wright (1999) use the term
    servicescape to mean the Impressions created by
    the design of the physical environment where
    service is delivered.
  • They suggest that servicescapes can create
    positive or negative impressions and that care
    should be taken to design appropriate

Restaurant Pétrus
Affecting Buyer's Behavior
  • Lovelock and Wright (1999) suggest that physical
    evidence and atmosphere affect buyer's behavior
    in three ways.
  • 1. Attention grabbing - to make the business
    stand out from competing businesses and to
    attract customers from target segments.
  • 2. Message creation - to use symbolic clues to
    communicate with the intended audience about the
    distinctive nature and quality of the service
  • 3. Effect creation - using colors, textures,
    sounds, scents, and spatial design to create or
    heighten an appetite for certain goods, services
    or experiences.

7. Process Strategy
  • A process strategy is all about the linkages
    between marketing management and operations
  • A process strategy looks at the processes,
    mechanisms and routines used to create and
    deliver service.

  • These are the procedures, mechanisms and routines
    by which a service is created and delivered to a
    customer. (These are a separate issue from the
    behavior of people such as service staff).
  • Process management is a key aspect of service
    quality improvement.
  • You must therefore be involved in how these
    processes operate, because customers' perceptions
    of satisfaction with services are a major concern
    and are often tied up with their experience of a

Reliable Service Systems
  • Customers want service systems that run to time,
    require little effort on the part of the
    customer, are reliable and deliver what they
  • These are operational issues that marketing
    professionals can use in their marketing

Service Delivery Process
  • Service personnel can look after customers whose
    table is not ready
  • The inter-personal skills and concern they show
    may make the system breakdown less worrying for
  • Similarly a pleasant waiting area may mean that
    the delay passes more comfortably.
  • Neither will entirely compensate for the system
    inefficiencies and breakdown.

Improve Service Quality
  • To improve service quality it is necessary to
  • design or redesign processes
  • it is not enough purely to focus on service

Reduce or Increase Service
  • Reduce - moving towards greater standardization.
    This can reduce costs, improve productivity and
    make distribution easier.
  • Produces more uniform service quality and
    improved service availability.
  • Negative effects may be a perception of limited
    choice and a rejection of the highly standardized
  • Increase - moving towards greater customization
    and flexibility. This may lead to being able to
    charge higher prices and achieving greater profit
    margins. This suggests a niche positioning
    strategy where volume is less important than
    margins. This is often used to gain higher levels
    of penetration in a market by adding more

Advantages and Disadvantages
  • They provide opportunities for a business to
    alter customers perceptions about the services
    they are buying. They also provide opportunities
    to alter the positioning of the product/service
    by appealing to new market segments or more
    people within the existing target market.

  • The marketing mix is not fixed - it can and
    should be changed periodically.
  • Some elements (such as pricing strategy) may be
    quite flexible, others (such as the physical
    evidence strategy) may be more costly and
    difficult to adjust.
  • There is a great deal of inter-dependence among
    the marketing mix elements - changing one element
    (such as the product) will effect all the other
    elements in the marketing program.

Where to go from here
  • Do A SWOT analysis of the RKR
  • Understand corporate strategy business purpose
  • Research analyze environmental opportunities
    internal strengths
  • Develop competitive strategy
  • Undertake market segmentation, targeting
  • Develop marketing strategy
  • Plan marketing program prepare budget
  • Organize marketing department, implement
    control marketing effort
  • Evaluate effectiveness of the marketing strategy
    competitive strategy

Guest Relations Table Contact Models
  • (Used with permission, from Chuck Keagle, The C
    C Organization)
  • Using this model can make your table visits even
  • Manager Contact with the Table
  • Read the Table / Establish Rapport
  • Introduce Yourself
  • Make a SPECIFIC Inquiry
  • Make a Positive Comment
  • Express Appreciation
  • Never
  • Intimidate
  • Appear Phony
  • Appear Uninterested
  • Appear Overbearing
  • Ignore

References and Resources
  • Baker M J (1994) The Marketing Book 3rd edit.
    Butterworth Heinemann
  • Christopher M. Payne A, and Ballantyne D (1991)
    Relationship Marketing Butterworth Heinemann
  • Cowell D (1984) The Marketing of Services.
    Butterworth- Heinemann Ltd.
  • Cravens D W (2000) Strategic Marketing 6th edit.
    Irwin McGraw-Hill
  • Cravens D W, Merrilees B and Walker R H (2000)
    Strategic Marketing Management for the Pacific
    Region. The McGraw-Hill Companies, Inc.
  • Doyle P (1994) Marketing Management Strategy
    Prentice Hall
  • Drucker P (1974) Management Tasks,
    Responsibilities, Practices New York, Harper and
  • Fifield P and Gilligan C (1998) Strategic
    Marketing Management 1998-99 - CIM Workbook
    Butterworth Heinemann
  • Payne A (1993) The Essence of Services Marketing
    Prentice Hall