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  • Definition of Marketing
  • Marketing Activities
  • Marketing Management
  • Marketing Environment

  • Marketing affects everyone
  • Consumers
  • Business organizations
  • Nonbusiness (nonprofit) organizations
  • Government
  • Academicians

  • Marketing is the process of planning and
    executing the conception,
  • pricing, promotion, and distribution of ideas,
    goods, and services
  • to create exchanges that satisfy individual and
  • objectives.

  • Marketing is a game played by an enterprise with
    the participation of consumers which rules are
    dertermined by macro environmental forces and
    leaded by micro environmental forces

  • Micro environmental variables
  • Internal environment
  • Top management
  • Production
  • Finance
  • Research and development
  • External environment
  • Markets
  • Suppliers
  • Intermediaries
  • Competitors
  • Public

  • Macro environmental variables
  • Demographic forces
  • Economic forces
  • Ecological forces
  • Technological forces
  • Political forces
  • Cultural forces

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  • Major implications of definition
  • The purpose of marketing is to satisfy human
    needs and wants.
  • Marketing facilitates and creates exchanges.
  • Marketing consists of various activities.
  • Marketing is performed by individuals and
  • Marketing occurs in a dynamic environment.
  • Marketing activities should be planned,
    organized, coordinated, executed, and controlled.

  • Understanding Marketing Terms
  • Needs, wants, and demands.
  • Products.
  • Value, satisfaction, and quality.
  • Exchange, transactions, and relationships.
  • Markets.

  • Needs, Wants, and Demands
  • Needs A state of felt deprivation.
  • Physical, social, esteem, individual.
  • Wants How people communicate their needs shaped
    by culture and individual personality.
  • Demands Wants that are backed by buying power.
  • Products
  • Anything that can be offered to a market for
    attention, acquisition, use or consumption and
    that might satisfy a need or want.

  • Value
  • Customer value is the difference between the
    benefits that the customer gains from owning or
    using a product and the cost of obtaining the
  • Satisfaction
  • Customer satisfaction depends on products
    perceived performance in delivering value
    relative to a buyers expectations.
  • Quality
  • The totality of features and characteristics of a
    product that bear upon its ability to meet
    customer needs.

  • Exchange
  • The act of obtaining a desired object from
    someone by offering something in return.
  • Transactions
  • A trade of values between two parties and
    marketings unit of measurement.
  • Relationship marketing
  • Focuses on building a relationship with a
    organizations profitable customers.
  • Markets
  • A set of actual and potential buyers who might
    transact with a seller.

Core Marketing Concepts
Needs, wants, and demands
Products and services
Exchange, transactions, and relationships
Value, satisfaction, and quality
  • Marketings Future
  • Manufacturing concept ,Product concept, Selling
    concept, Marketing concept, Societal marketing
    concept, SOCIAL MEDIA AGE
  • Rapid globalization resulting in a vastly more
    complex marketing environment.
  • Greater focus needed on satisfying customers.
  • Marketing must encompass the entire business all
    departments are becoming involved in satisfying
    the customer.

  • Chapter 2Service Characteristics of Hospitality
    and Tourism Marketing
  • A service culture
  • Characteristics of service marketing
    (intangibility, inseparability, variability,
  • Management strategies for service businesses

  • A Service Culture
  • The service culture focuses on serving and
    satisfying the customer.
  • Service culture has to start with top management
    and flow down.
  • A service culture empowers employees to solve
    customer problems.
  • Organizations culture must support and reward
    customer need attention.

  • Four Characteristics of Services
  • 1. Intangibility
  • Services cannot be seen, tasted, felt, heard, or
    smelled before they are purchased.
  • Buyers look for tangible evidence that will
    provide information and confidence about the

  • Four Characteristics of Services
  • 2. Inseparability
  • Customer-contact employees are part of the
  • Customers are part of the product.
  • Customers and employees must understand the
    service delivery system.

  • Four Characteristics of Services
  • 3. Variability
  • Services are highly variable.
  • Services are produced and consumed at the same
    time which limits quality control.
  • Fluctuating demand makes it difficult to deliver
    consistent quality during periods of peak demand.
  • Lack of consistency a major source of customer

  • Four Characteristics of Services
  • 4. Perishability
  • Services cannot be stored.
  • Capacity and demand must be managed since unsold
    inventory cannot be carried forward.

Three Types of Marketing in Service Industries
(Figure 2-2)
  • External marketing company and customers
  • Internal marketing company and employees
  • Interactive marketing employees and customers

External marketing
Internal marketing
Interactive marketing
  • Internal marketing means that the service firm
    must effectively train and motivate its
    customer-contact employees and all the supporting
    service personnel to work as a team to provide
    customer satisfaction.
  • Interactive marketing means that perceived
    service quality depends heavily on the quality of
    the buyer-seller interaction during service

  • Management Strategies for Service Businesses
  • 1. Managing Differentiation
  • Price Competition referred companies to develop a
    differentiated offer, delivery, and image.
  • Offer innovative features (e.g., British Airways
    sleeping compartment, hot showers, and
    cooked-to-order breakfasts).
  • Differentiate service delivery through 1)
    people 2) physical environment and 3) process.

  • Management Strategies for Service Businesses
  • 2. Managing Service Quality
  • The key is to exceed the customers
    service-quality expectations.
  • The first step is to empower frontline service
    employees to give them the authority,
    responsibility and incentives they need to
    recognize and tend to customer needs.
  • Develop a set of common virtues regarding service
  • Watch service performance closely (both our own
    and competitors)

  • Management Strategies for Service Businesses
  • 3. Tangibilizing the Product
  • Promotional material, employees appearance, and
    the service firms physical environment all
    assist in tangibilizing the service.
  • Trade dress (the distinctive nature of a
    companys total visual image and overall

  • Management Strategies for Service Businesses
  • 4. Managing the Physical Surroundings
  • Physical evidence that is not managed properly
    can hurt a business. (signs with missing letters,
    burned out lights, employees in dirty uniforms,
    messy workstations)
  • Physical surroundings should be designed to
    reinforce the products position (organization
    image) in the customers mind.
  • 5. Stress Advantages of Nonownership
  • In a service the customer does not have ownership
    of the product. Lack of ownership, sometimes
    cited as a major characteristics of a service can
    be stressed as a benefit.

  • Management Strategies for Service Businesses
  • 6. Managing Employees as Part of the Product
  • In the hospitality, employees are a critical part
    of the product and marketing mix.
  • Human resources and marketing departments must
    work closely together.
  • Must manage service at the points of encounter
  • A point of encounter is any point at which an
    employee encounters the customer.

  • Management Strategies for Service Businesses
  • 7. Managing Perceived Risk
  • Customers experience some anxiety before they
    purchase hospitality and tourism services because
    they can not experience the product beforehand.
  • Customer loyalty increases for companies that
    have provided a consistent product in the past.

  • Management Strategies for Service Businesses
  • 8. Managing Consistency
  • Consistency means that customers receive the
    expected product without unwanted surprises.
  • It is not a simple task to accomplish many
    factors work against consistency such as unclear
    company policy, fluctuating demand.

  • Chapter 3The Marketing Environment
  • The company operates in a complex marketing
    environment, consisting of uncontrollable forces
    to which the company must adapt.
  • The environment produces both threats and
    opportunities. The company must carefully analyze
    its environment so that it can avoid the threats
    and take advantage of the opportunities.

  • The marketing environment is made up of a
    microenvironment and a macro environment.
  • The microenvironment consists of actors and
    forces close to the company that can affect its
    ability to serve its customers.
  • The macroenvironment consists of the larger
    societal forces that affect the whole
    microenvironment demographic, economic, natural,
    technological, political, competitor, and
    cultural forces.

microenvironment include the company, suppliers,
market intermediaries, customers, and publics.
Marketing Intermediaries
  • Marketing managers work closely with top
    management and the various company departments.
    All company departments will have some impact on
    the success of marketing plans.
  • Housekeeping is responsible for delivering clean
    rooms sold by the sales department,
  • The accounting department has to measure revenues
    and costs to help marketing know how well it is
    achieving its objectives etc.

MARKETING INTERMEDIARIES Marketing intermediaries
include travel agents, wholesale tour operators,
middlemen, physical distribution firms,
marketing-service agencies, financial
intermediaries and hotel representatives. They
help the company promote, sell, and distribute
its goods to final buyers. Marketing services
agencies include public relations agencies,
advertising agencies, and direct mail houses.
They work directly with the companys marketing
consulting firms which help companies target and
promote their products to the right
markets. Financial intermediaries include banks,
credit companies, insurance companies etc. They
help hospitality companies finance their
transactions or insure the risks associated with
the buying and selling of goods and services.
macroenvironment consists of the seven major
Compatitive Forces
Economic Forces
Technological Forces
Cultural Forces
Natural Forces
Demographic Forces
Political Forces
1-COMPETITIVE ENVIRONMENT Each firm must consider
its size and industry position in relation to its
competitors. Both large and small firms must find
marketing strategies that give them specific
advantages over competitors operating in their
markets. In general a company should monitor
three variables when analyzing each of its
competitors Share of market The competitors
share of the target market. Share of mind The
percentage of customers who named the competitor
in responding to the statement, Name the first
company that comes to mind in this
industry. Share of heart The percentage of
customers who named the competitor in responding
to the statement, Name the company from whom you
would prefer to buy the product.
Every company faces four levels of
competitors 1-Product form competition A
company can view its competitors as other
companies that offer similar price. At this
level, McDonalds will view its competition as
Burger King, Wendys, and Hardees. 2-Product
category competition A company can see its
competitors as all companies making the same
product or class of products. Here McDonalds may
see its competition as all fast-food
restaurant. 3-General competition A company can
see its competitors more broadly as all companies
supplying the same service. Here McDonalds would
see itself competing with all restaurants and
other suppliers of prepared food. 4- Budget
competition A company can view its competition
even more broadly as all companies that compete
for the same consumer dollars. Here McDonalds
may see itself competing with grocery stores and
the self provision of the meal by the consumer.
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. a) Changing Age Structure
of the Population The age distribution is
rapidly assuming. Two very large age groups, the
baby boomer generation and the echo boomer,
surround the smaller Generation X. -The Baby
Boomers The post-World War II baby boom produced
78 million baby boomers born between 1946 and
1964. Since then, the baby boomers have become
one of the most powerful forces shaping the
marketing environment. Todays baby boomers
account for about 30 percent of the population
but earn more than half of all personal income.
They will spend billions of dollars on travel,
looking for active vacations, where they can have
adventure or explore, such as historical and
cultural tours of Europe. They are approaching
life with a new stability and reasonableness in
the way they live, think, eat, and spend. As they
continue to age, they will create a large and
important seniors market. By 2025, there will be
64 million baby boomers aged 61 to 79, a 90
percent increase in the size of this population
from today. -Generation X The baby boom was
followed by a birth dearth, creating a
generation of 45 million people born between 1965
and 1976. The GenXers are defined as much by
their shared experiences as by their age. They
are a more skeptical bunch, cynical of frivolous
marketing pitches that promise easy success. They
like lower prices and a more functional look.
GenXers share new cultural concerns. They care
about the environment and respond favorably to
socially responsible companies. They represent
125 billion in annual purchasing power. By the
year 2010, they will have overtaken the baby
boomers as a primary market for almost every
product category. -The Echo Boomers Born between
1977 and 1994, these children of the baby boomers
now number 72 million. The echo boomers has
created large and growing kids and teens
markets. One distinguishing characteristic of
the echo boomers is their utter fluency and
comfort with computer, digital, and Internet
The generation born after the year 1994 until
2004 is referred to as Generation Z. There is
interest in this generation as in another few
years the members will be joining the workforce
and contributing to the economy of the country
and the society. This is the first generation to
be born with complete technology. They were born
with PCs, mobile phones, gaming devices, MP3
players and the internet. They do not know life
without technology. This reliance on technology
and gadgets has had a negative effect on the
members. They rather stay indoors and use their
electronics than play outdoors and be active.
They are leading a sedentary life that can result
in health problems later on. it is a known fact
that this generation has it all time high in
obesity. For them ,social media platforms are a
way to communicate with the outside world. They
are not bothered about privacy and are willing to
share intimate details about themselves with
complete strangers. They have virtual friends and
for them hanging out with friends means talking
to them over the cell phones, emails and text
This generation is considered to highly creative
and collaborative and will have a significant
impact on the way companies work when they join
the workforce. They wont have any communication
skill they will just have technology skills. When
they get to be working age, they will change the
workplace dramatically in terms of style and
expectations. To keep going the next step is
Multitasking. They can text, read, watch, talk
and eat all at the same time, a talent that stuns
adults. With this preference toward multitasking
comes a dark side, which mental health experts
are calling "acquired attention deficit
disorder. While they are able to complete many
tasks at once, each task gets divided attention,
and the generation is losing the ability to focus
and analyze more lengthy, complex information.
The last characteristic is speedy. Speedy is a
short attention span, perhaps brought on by the
tendency to multitask, also requires information
to be delivered in rapid, short bursts if it is
to be understood. Generation Z thrives on instant
gratification. This is why classes are so short
and the breaks on so long.
b) Changing Family Style The traditional
household consists of a husband, wife, and
children (sometimes grandparents). But now, more
people are divorcing or separating, choosing not
to mary, marrying later, or marrying without time
intention to have children. Marketers must
increasingly consider needs of nontraditional
households, because they are now growing more
rapidly than traditional households. The number
of working women has also increased greatly. This
trend has spawned the child day care business and
increased consumption of convenience foods and
services, career-oriented womens clothing,
financial services, and many other business
c)Geographic Shifts in Population This is a
period of great migratory movements between and
within countries. The population shifts interest
marketers because people in different regions buy
differently. Today, people are moving to
micropolitan areas small cities located beyond
congested metropolitan areas. These smaller
micros offer many of the advantages of metro
areas-jobs, restaurants, diversions, community
organizations- but without the population crush,
traffic jams, high crime rates, and high property
taxes often associated with heavily urbanized
3- ECONOMIC ENVIRONMENT The economic environment
consists of factors that affect consumer
purchasing power and spending patterns.
Purchasing power depends on current income,
price, saving and credit marketers must be aware
of major economic trends in income and changing
consumer spending patterns. Whereas demographic
and cultural trends generally affect the size and
needs of various markets, economic trends affect
the purchasing power of these markets. Changes in
Income Marketers should pay attention to income
distribution as well as average income. There is
a comfortable middle class that is somewhat
careful about its spending but can still afford
the good life of the time. The working class must
stick close to the basics of food, clothing, and
shelter and must try hard to save. Finally, the
underclass (persons on welfare and many retirees)
must count their pennies when making even the
most basic purchases.
Changes Consumer Spending Patterns Changes in
major economic variables such as income, cost of
living, interest rates, and savings and borrowing
patterns have a large impact on the marketplace.
Companies use economic forecasting to anticipate
changes in these variables. With adequate
warning, businesses can reduce their costs and
adjust their marketing mix to ride out the
economic storm. Restaurants, for example, can
vary their menus and offer a number of
lower-priced entrees during a recession. Global
Economic Patterns With many markets in Europe
saturated with hotels, companies are looking to
other global markets. As a regions economy
develops, demand is created for lodging and food
facilities. The global growth creates many
opportunities however it also greatly increases
the complexity of the macroenvironmental forces.
4- NATURAL ENVIRONMENT The natural environment
consists of natural resources required by
marketers or affected by marketing activities.
Communities are finding that preserving the
natural environment can be good for tourism. Hong
Kong, for example, saw the coming of Disneyland
as a chance to improve its natural environment.
One way of protecting the environment is to
recycle and reduce waste. Disney has an
aggressive program to reduce waste. Disney World
shreds its paper products and sends the shredded
paper to the gift shops to use as packing
affected the hospitality industry in many ways
Technology is having an impact on hotel room
amenities. Many business class hotels have a
combination fax machine, printer, and copier in
each room. Also, machines cook food
automatically, eliminating human error.
Computerized video checkout services are now
common in many hotels. Electronic guest room
locking systems tells which guests accessed their
mini bar, making restocking easier. Technology
has also made communication easier. The Internet
has had a profound effect on the hospitality and
travel industries. The Internet has created a new
distribution channel for hospitality and travel
products. Most hotel, rent a car companies, and
hotel chains have set up their own on-line
reservation systems, allowing the guest to book
directly on line.
  • The political environment is made up of laws,
    government agencies, and pressure groups that
    influence and limit the activities of various
    organizations and individuals in society. There
    are some current political trends that affect the
    marketing management
  • Increased Legislation and Regulation Affecting
  • International Legislation
  • Government Intervention in Natural Resource
  • Growth of Public-Interest Groups
  • Increased Emphasis on Ethics and Socially
    Responsible Actions

7- CULTURAL ENVIRONMENT The cultural environment
includes institutions and other forces that
affect societys basic values, perceptions,
preferences, and behaviors. The following
cultural characteristics can affect marketing
decision making. People in any society hold
certain persisting core beliefs and values. Core
beliefs and values are passed are on from parents
to children and are reinforced by schools,
churches, business, and governments. Secondary
beliefs and values, however, are more open to
change. Believing in marriage is a core belief
believing that people should get married early is
a secondary belief. Marketers have some chance of
changing secondary values, but little chance of
changing core values.
companies view the marketing environment as an
uncontrollable element to which they must
adapt. They passively accept the marketing
environment and do not try to change it. Other
companies take an environmental management
perspective. Rather than simply watching and
reacting, these firms take aggressive action to
affect the publics and forces in their marketing
  • Chapter 4
  • Buying behavior is never simple. It is affected
    by many different factors and understanding it is
    the essential task of marketing management. The
    basic beliefs about consumer behavior can be
    summarized into five premises
  • Consumer behavior is purposeful and goal
  • The consumer has free choice.
  • Consumer behavior is a process.
  • Consumer behavior can be influenced.
  • There is a need for consumer education.

  • Todays marketplace has become very competitive.
    In addition, during recent years the hospitality
    and travel industries have undergone
    globalization. The result is a fiercely
    competitive international market with companies
    fighting for their share of consumers.
  • The central question is How do consumers respond
    to the various marketing stimuli that a company
    might use. The company that really understands
    how consumers will respond to different product
    features, prices and advertising appeals has a
    great advantage over its competitors. Researchers
    from companies have heavily studied the
    relationship between marketing stimuli and
    consumer response.
  • The figure below shows the model of buyer
    behavior. In the figure, marketing and other
    stimuli enter the consumers black box and
    produce certain responses.

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Factors influencing behavior
  • Cultural Factors
  • Cultural factors exert the broadest and deepest
    influence on consumer behavior.
  • Culture
  • Culture is the most basic determinant of a
    persons wants and behavior. It comprises the
    basic values, perceptions, wants, and behaviors
    that a person learns continuously in a society.
    Culture is an integral part of the hospitality
    and travel business.
  • For companies operating in many countries,
    understanding and serving the needs of can be
    very difficult. Although consumers in different
    countries may have some things in common, their
    values, attitudes, and behaviors often vary
    dramatically. Failing to understand such
    differences in customs and behaviors from one
    country to another can spell disaster for a
    companys international products and programs.
    Marketers must decide on the degree to which they
    will adapt their products and marketing programs
    to meet the unique needs of consumers in various

  • Social Class
  • Social classes are relatively permanent and
    ordered divisions in a society whose members
    share similar values, interests and behaviors.
    Social scientists have identified the seven
    American social classes upper uppers (less than
    1), lower uppers (2), upper middles (12),
    middle (32), working (38), upper lowers
    (9),and lower lowers (7).
  • Marketers interested in social class because
    people within a given class tend to exhibit
    similar behavior, including buying behavior.

  • Social Factors
  • Consumer behavior is also influenced by social
    factors, including the consumers groups, family,
    social roles, and status.
  • Groups
  • An individuals attitudes and behavior are
    influenced by many small groups. Those to which
    the person belongs that have a direct influence
    are called membership groups. Primary groups are
    those with whom there is regular but informal
    interaction such as family, friends, neighbors
    and co-workers. Secondary groups are more formal
    and less regular interaction they include
    religious groups, Professional associations, and
    trade unions.
  • Reference groups influence consumers in at least
    three ways
  • 1-They expose the person new behaviors and
  • 2-They influence the persons attitudes and
  • 3-They create pressures to conform that may
    affect the persons product

  • Family
  • Family members have a strong influence on buyer
    behavior. The family remains the most important
    consumer buying organization in the society.
  • Roles and Status
  • A person belongs to many groups family, clubs
    and organizations. An individuals position in
    each group can be defined in terms of role 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 the society

  • Personal Factors
  • A buyers decisions are also influenced by
    personal characteristics such as age and
    life-cycle stage, occupation, economic situation,
    lifestyle, personality and self-concept.
  • Age and Life-Cycle Stage
  • The types of goods and services people buy
    change during their lifetimes. Preferences for
    leisure activities, travel destinations, food and
    entertainment are often age related. Successful
    marketing to various age segments may require
    specialized and targeted strategies.
  • Buying behavior is also shaped by the family
    life-cycle stages. Marketers often define their
    target markets in life-cycle terms and develop
    appropriate products and marketing plan.

  • Occupation
  • A persons occupation affects the goods and
    services bought. Marketers try to identify
    occupational groups that have above-average
    interest in their product.
  • Economic Situation
  • A persons economic situation greatly affects
    product choice and the decision to purchase a
    particular product. Marketers need to watch
    trends in personal income, savings, and interest
    rates. If economic indicators point to a
    recession, they can redesign, reposition, and
    reprice their products.Conversely, periods of
    economic prosperity create opportunities.

  • Lifestyle
  • People coming from the same subculture, social
    class and occupation may have quite different
    lifestyles. A lifestyle is a persons pattern of
    living as expressed in his or her activities,
    interests, and opinions.
  • Personality and Self-Concept
  • Each persons personality influences his or her
    buying behavior. Personality means distinguishing
    psychological characteristics that lead to
    relatively consistent and enduring responses to
    the environment.Personality can be useful in
    analyzing consumer behavior for some product and
    brand choices.
  • There is another concept related to
    personalitya persons self-concept (also called
    self-image). Each person has a complex mental
    self-picture and his or her behavior tends to be
    consistent with that self-image.

  • Psychological Factors
  • A persons buying behavior is also influenced by
    four major psychological factors
  • motivation,
  • perception,
  • learning
  • beliefs and attitudes.

  • Motivation
  • A person has many needs . A need becomes a motive
    when it is aroused to a sufficient level of
    intensity.Creating a tension state causes the
    person to act to release the tension. Two of the
    most popular theories of human motivation are the
    theories of Abraham Maslow and Herzbergs theory
  • Maslows Theory Of Motivation Human needs are
    arranged in a hierarchy from the most pressing to
    the least pressing. These are physiological
    needs,safety needs,social needs, esteem needs and
    self-actualization needs. A person tries to
    satisfy the most important need first and then
    the others subsequently.
  • Herzbergs Theory He developed a two-factor
    theory that distinguishes dissatisfiers (factors
    that cause dissatisfaction) and satisfiers
    (factors that cause satisfaction).The absence of
    dissatisfiers is not enough, satisfiers must be
    actively present to motivate a purchase.

  • Perception
  • Two people with the same motivation in the same
    situation may act quite differently based on how
    they perceive conditions. People can emerge with
    different perceptions of the same object because
    of three perceptual processes
  • -Selective Attention Since a person cannot
    possibly attend to all stimuli, most stimuli will
    be screened out-a process called selective
    attention. It means marketers have to work hard
    to attract consumers notice. The real challenge
    is to explain which stimuli people will notice.
  • -Selective Distortion It is the tendency to
    twist information into personal meanings and
    interpret information in a way that will fit our
  • -Selective Retention People will tend to
    retain information that supports their attitudes
    and beliefs.

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  • Learning
  • Learning describes changes in an individuals
    behavior arising from experience.
  • Most people behavior is learned.
  • Learning theorists say that learning occurs
    through the interplay of drives, stimuli, cues,
    responses, and reinforcement.
  • When consumers experience a product, they learn
    about it. Hotels should help guests to learn
    about the quality of their facilities and

  • Beliefs and Attitudes
  • Through acting and learning, people acquire
    beliefs and attitudes, which in turn influence
    their buying behavior.
  • A belief is a descriptive thought that a person
    holds about something. Marketers are interested
    in beliefs that people have about specific
    products and services. Beliefs reinforce product
    and brand images. Unfounded consumer beliefs
    deter purchases.

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  • Beliefs and Attitudes
  • An attitude describes a persons relatively
    consistent evaluations, feelings, and tendencies.
    Toward an object or an idea. Attitudes put people
    into a frame of mind for liking and disliking
    things and moving toward or away from them.

  • The buyer decision process consists of five

Need recognition
Postpurchase behavior
Purchase decision
Evaluation of alternatives
Information Search
  • Need Recognition
  • The buying process starts when the buyer
    recognizes a problem or need. The buyer senses a
    difference between his or her actual state and a
    desired state. The need can be triggered by
    internal stimuli. From previous experience, the
    person has learned how to cope with this need and
    is motivated toward objects that he or she knows
    will satisfy it. At this stage, marketers must
    determine the factors and situation that trigger
    consumer problem recognition. They should
    research consumers to find out what kinds of
    needs or problems led them to purchase an item.

  • Information Search
  • If the consumers drive is strong and a
    satisfying product is near at hand, the consumer
    is likely to buy it at that moment. If not, the
    consumer may simply store the need in memory and
    search for relevant information. The consumer can
    obtain information from several sources. These
  • Personal sources family friends, neighbors,
  • Commercial sources advertising, salespeople,
    dealers, packaging, displays
  • Public sources restaurant reviews, editorial in
    the travel section, consumer-rating organizations
  • With hospitality and travel products, personal
    and public sources of information are more
    important than advertisement. This is because a
    customer cannot try out an intangible product
    before they try it. Responses from personal
    sources have more impact than advertising because
    they are perceived to be more credible.

  • Evaluation of Alternatives
  • There is no simple and single evaluation process
    used by all consumers or even by one consumer in
    all buying situations. Certain basic concepts
    will help explain consumer evaluation processes.
  • -Each consumer sees a product as a bundle of
    product attributes. The most attention is paid to
    attributes connected with their needs.
  • -The consumer attaches different degrees of
    importance to each attribute according to his or
    her unique needs and wants.
  • -The consumer is likely to develop a set of
    beliefs about where each brand stands on each
    attribute. The set of beliefs held about a
    particular brand is known as the brand image.
  • -The consumer is assumed to have a utility
    function for each attribute. A utility function
    shows how the consumer expects total product
    satisfaction to vary with different levels of
    different attributes.
  • -Fifth, the consumer arrives at attitudes toward
    the different brands through some evaluation

  • 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, but two factors can come
    between the purchase decision.
  • Attitudes of others represent the first. The
    more intense the other persons attitude and the
    closer that person is to the decision maker, the
    more influence the other person will have.
  • Purchase intention is also influenced by
    unexpected situations. The consumer forms an
    intention based on factors such as expected
    family income, expected price and expected
    benefits from the product. When the consumer is
    about to act, unexpected situations may arise to
    change the purchase intention.

  • Post purchase Behavior
  • The marketers job does not end when the consumer
    buys a product. Following a purchase, the
    consumer will be satisfied or dissatisfied and
    will engage in post purchase actions of
    significant interest to the marketer. Post
    purchase satisfaction depends on the
    relationship between consumer expectations and
    perceived product performance.
  • If the product matches expectations, the consumer
    will be satisfied. If it falls short, the
    consumer will experience dissatisfaction. The
    larger the gap between expectations and
    performance, the greater the consumers
    dissatisfaction. This suggests that sellers must
    faithfully represent the products performance so
    that buyers are satisfied.
  • Almost all major purchases result in cognitive
    dissonance or discomfort caused by postpurchase
    conflict. Thus consumers feel some postpurchase
    dissonance with many purchases.Marketers can take
    steps to reduce consumer postpurchase
    dissatisfaction and help consumers to feel good
    about their purchases.

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Chapter 5
  • What is a product?
  • 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
  • Services
  • Places
  • Organizations
  • Ideas

  • Product Levels
  • Core product The most basic level it answers the
    question of What the buyer is really buying.
  • Facilitating products Services or goods that
    must be present for the guest to use the core
  • Supporting products Extra products offered to
    add value to the core product and to help
    differentiate it from the competition.
  • Augmented product Includes accessibility,
    atmosphere, customer interaction with the service
    organization, customer participation, and
    customers interaction with each other.

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  • All steak houses should learn
  • Dont sell the steak, sell the sizzle
  • Marketers must uncover the core benefit to the
    curtomer of every product and sell these
    benefits, rather than merely selling features.

Facilitating products
  • Services or goods that must be present for the
    guest to use the core product.

Supporting products
  • Extra products offered to add value to the core
    product and to help differentiate it from the
  • In a hotel, business center or a full service
    health spa are supporting products that may help
    to draw customers to the hotel.

  • The core product
  • provides a focus for the business it is the
    reason for being.
  • Facilitating products
  • are those that are essential for providing the
    core product to the target market.
  • Supporting products
  • can help position a product.
  • The augmented service offering
  • combines what is offered with how it is

  • Augmented Product Issues
  • Accessibility Location and working hours of
  • Atmosphere, the physical environment Critical
    element in services, it can be the reason for
    choosing the establishment. Appreciated through
    the senses (visual, aural, olfactory and
  • Customer interaction with the service delivery
  • Three stages (1) joining (2) consumption (3)
  • Customer interaction with other customers
    Hospitality organizations must manage the
    interaction of customers to ensure that some
    customers do not negatively affect the experience
    of others.
  • Customer coproduction Involving the guest in
    service delivery can increase capacity, improve
    customer satisfaction, and reduce costs.

  • Brand Decisions
  • A brand is a name, term, sign, symbol, design or
    a combination of these elements intended to
    identify the goods or services of a seller and
    differentiate them from those of competitors.
  • Conditions that support branding
  • 1. The product is easy to identify by brand or
  • 2. The product is perceived as the best value for
    the price.
  • 3. Quality and standards are easy to maintain.
  • 4. The demand for the product class is large
    enough to support a regional, national, or
    international chain.
  • 5. There are economies of scale.

  • The Product Is Easy to Identify by Brand or
  • Desirable Characteristics of Brand Name
  • It should suggest something about the products
    benefits and qualities.
  • It should be easy to pronounce, recognize and
  • It should be distinctive.
  • The name should translate easily to foreign
    languages for the companies seeking future
  • It should be capable of registration and legal

  • The Product Is Perceived as the Best Value for
    the Price
  • A brand name derives its value from consumer
  • Brands attract consumers by developing a
    perception of good quality and value.

  • Quality and Standards Are Easy to Maintain
  • To be successful, a large multi-unit brand must
    develop systemwide standards to meet the
    expectations of the customer.
  • If the brand is successful in developing an image
    of quality, customers will expect quality in all
    outlets carrying the same brand name.
  • Consistency and standardization are critical

  • There Are Economies of Scale
  • Branding costs money, to justify expenditures for
    administration and advertising the brand should
    provide economies of scale.
  • Management information systems, reservation
    systems, national purchasing contracts and common
    architectural designs are ways in which brands
    can provide economies of scale.

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    edilmesini dilerdiniz? Neden?
  • (Bayanlar sadece 1 veya 2 erkekler sadece 3 veya
  • SORU 2 Sizin için önemli bir karsi cinse
    resimdekilerden hangisini hediye etmeyi
    dilerdiniz? Neden?
  • (Bayanlar sadece 3 veya 4 erkekler sadece 1 veya

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Chapter 6Pricing Products Pricing
Considerations, Approaches and Strategy
  • Price is the amount of money charged for a good
    or a service.
  • Price is the sum of values consumers exchange for
    the benefits of having or using the product or
  • Price is the only marketing mix element that
    produces revenue.

  • Factors to Consider When Setting Prices
  • Internal Factors Influencing Pricing Decisions
  • a) Marketing Objectives
  • Survival
  • Current profit maximization
  • Market-share leadership
  • Product-quality leadership
  • Other Objectives
  • b) Marketing Mix Strategy
  • c) Costs
  • d) Organizational Considerations

  • Factors to Consider When Setting Prices
  • External Factors Influencing Pricing Decisions
  • Market and demand
  • Cross Selling and Upselling
  • c) Pricing in different markets
  • d) Consumer Perceptions of Price and Value
  • e) Analyzing the Price-Demand Relationship

  • Factors to Consider When Setting Prices
  • Internal Factors Influencing Pricing Decisions
  • a) Marketing Objectives
  • i) Survival It is used when the economy slumps
    or recession is going on. A manufacturing firm
    can reduce production to match demand and a hotel
    can cut rates to create the best cash flow.
  • ii) Current profit maximization Companies may
    choose the price that will produce the maximum
    current profit, cash flow or return-on
    investment, seeking financial outcomes rather
    than long-run performance.
  • iii) Market-share leadership When companies
    believe that a company with the largest market
    share will eventually enjoy low costs and high
    long run profit, they will set low opening rates
    and strive to be the market-share leader.
  • iv) Product-quality leadership Hotels like the
    Ritz-carlton chain charge a high-price for their
    high-cost products to capture the luxury market.
  • v) Other Objectives Stabilize market, create
    excitement for new product, draw more attention.

  • Internal Factors Influencing Pricing Decisions
  • b) Marketing Mix Strategy
  • Price must be coordinated with product design,
    distribution, and promotion decision to form a
    consistent and effective marketing program.
  • c) Costs
  • i) Fixed Costs Costs that do not vary with
    production or sales level
  • ii) Variable Costs Costs that vary directly with
    the level of production.
  • d) Organizational Considerations Management must
    decide who within the organization should set
    prices . In small companies, this will be the top
    management in large companies, pricing is
    typically handled by a corporate department or by
    a regional or unit manager under guidelines
    established by corporate management.

  • External Factors Affecting Pricing Decisions
  • Market and demand
  • Although costs set the lower limits of prices,
    the market and demand set the upper limit. Both
    consumer and channel buyers (e.g. Tour operator)
    balance the products price against the benefits
    it provides. Thus before setting prices, a
    marketer must understand the relationship
    between price and demand for a product.
  • Cross Selling and Upselling
  • Cross selling Companys other products are sold
    to the guest.
  • Upselling Occurs through training of sales and
    reservation employees to offer continuously a
    higher-priced product that will better meet the
    customers needs, rather than settling for the
    lowest price.

  • External Factors Affecting Pricing Decisions
  • c) Pricing in different markets
  • 1) Pure Competition The market consists of many
    buyers and sellers trading in a uniform
  • 2) Monopolistic Competition The market consists
    of many buyers and sellers who trade over a range
    of prices rather than a single market price (e.g.
  • 3) Oligopolistic Competition The market
    consists of a few sellers who are highly
    sensitive to each others pricing and marketing
    strategies (e.e. airline companies).
  • 4) Pure Monopoly The market consists of one
    seller it could be a government monopoly, a
    private regulated monopoly, or a private
    non-regulated monopoly.

  • External Factors Affecting Pricing Decisions
  • d) Consumer Perceptions of Price and Value
  • It is the consumer who decides whether a
    products price is right. The price must be buyer
    oriented . The price decision requires a creative
    awareness of the target market and recognition of
    the buyers motivations.
  • e) Analyzing the Price-Demand Relationship
  • Demand and price are inversely related the
    higher the price the lower the demand. Most
    demand curves slope downward in either a
    straight or a curved line. The prestige goods
    demand curve sometimes slopes upward.

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  • External Factors Affecting Pricing Decisions
  • f) Price Elasticity of Demand
  • If demand hardly varies with a small change in
    price , we say that the demand is inelastic, if
    demand changes greatly, we say that demand is
  • Buyers are less price sensitive when the product
    is unique or when it is high in quality, prestige
    or exclusiveness. Consumers are also less price
    sensitive when substitute products are hard to
  • If demand is elastic, sellers will generally
    consider lowering their prices to produce more
    total revenue.

  • External Factors Affecting Pricing Decisions
  • Factors Affecting Price Sensitivity
  • Unique Value Effect Creating the perception that
    your offering is different from those of your
    competitors avoids price competition.
  • Substitute Awareness Effect Lack of the
    awareness of the existence of alternatives
    reduces price sensitivity.
  • Business Expenditure Effect When someone else
    pays the bill, the customer is less price
  • End Benefit Effect Consumers are more price
    sensitive when the price of the product accounts
    for a large share of the total cost of the end

  • External Factors Affecting Pricing Decisions
  • g) Competitors Prices and Offers
  • When a company is aware of its competitors
    price and offers, it can use this information as
    a starting point for deciding its own pricing.
  • h) Other External Elements
  • Other factors include inflation, boom or
    recession, interest rates, government purchasing
    , birth of new technology.

  • General Pricing Approaches
  • Cost-based pricing Cost-plus pricing a standard
    markup is added to the cost of the product.
  • Break-even analysis and target profit pricing
    Price is set to break-even on the costs of making
    and marketing a product or to make a desired
  • Value-based pricing Companies based their prices
    on the products perceived value. Perceived value
    pricing uses the buyers perceptions of value,
    not the sellers cost, as the key to pricing.
  • Competition-based pricing Competition-based
    price is based on the establishment of price
    largely against those of competitors, with less
    attention paid to costs or demand.

  • Pricing Strategies (New Products)
  • Prestige Pricing Hotels or restaurants seeking
    to position themselves as luxurious and elegant
    will enter the market with a high price that will
    support it.
  • Market-Skimming Pricing Price skimming is
    setting a high price when the market is price
    insensitive. It is common in industries with high
    research and development costs.
  • 3) Market-Penetration Pricing Companies set a
    low initial price to penetrate the market quickly
    and deeply, attracting many buyers and winning a
    large market share.

  • Pricing Strategies (Existing-Products)
  • Product-Bundle Pricing Sellers using
    product-bundle pricing combine several of their
    products and offer the bundle at a reduced price.
    Price bundling reduces price competition by
    making it hard to figure price components.
  • Price Adjustment Strategies Volume discounts,
    discounts based on time of purchase,
    discriminatory pricing, yield management
  • 3) Last-Minute Pricing Provides an outlet for
    unsold inventory, it is not a substitute for
    effective marketing and a well-devised pricing

  • Psychological Pricing Psychological aspects
    such as prestige, reference prices, round figures
    and ignoring end figures are used in pricing.
    Also reference should be considered.
  • Promotional Pricing Hotels temporarily price
    some of their products below list price or below
    cost for special occasions.
  • Value pricing means offering a price
    below competitors on a permanent basis. This is
    risky if a company does not have the ability to
    cut costs significantly. It is usually most
    appropriate for companies able to increase
    long-run market share through low prices.
  • Price sensitivity measurement utilizes a
    target consumer survey with four questions from
    which the aggregate results are graphed to give
    an idea of consumer price sensitivity.

  • Distribution Channels
  • A distribution channel is a set of independent
    organizations involved in the process of making a
    product or service available to the consumer or
    business user.
  • Distribution systems can be viewed as the
    companys circulatory system.

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  • insan vücudundaki
  • dolasim sistemiyle eslestirilirse,
  • isletmenin diger fonksiyonlari
  • vücudun hangi bilesenleriyle
  • iliskilendirilebilir?

  • A well managed distribution system can make the
    difference between a market-share leader and a
    company struggling for survival. CRS and own
    sales force is not enough so companies must
    develop increasingly complex distribution
  • The use of intermediaries depends on their
    greater efficiency in marketing the goods
    available to target markets. Through their
    contacts, experience, specialization and scale of
    operation, intermediaries normally offer more
    than a firm can on its own.

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  • Distribution Channel Functions
  • A distribution channel moves goods from
    producers to consumers. It overcomes the major
    time, place and possession gaps that separate
    goods and services from those who would use them.
  • Information Gathering and distributing marketing
    research and intelligence information about the
    marketing environment.
  • Promotion Developing and spreading persuasive
    communications about an offer.
  • Contact Finding and communicating with
    prospective buyers.
  • Matching Shaping and fitting the offer to the
    buyers needs.
  • Negotiation Agreeing on price and other terms of
    the offers that ownership or possession can be
  • Physical distribution Transporting and storing
  • Financing Acquiring and using funds to cover the
    cost of channel work.
  • Risk taking Assuming financial risks, such as
    the inability to sell inventory at full margin.

  • Marketing Intermediaries
  • Marketing intermediaries available to the
    hospitality industry and travel include travel
    agents , tour operators, tour wholesalers,
    specialists, hotel sales representatives,
    incentive travel agents, government tourism
    associations, consortia and reservation systems
    and electronic distribution systems.
  • Internet The internet is an effective marketing
    tool for hospitality and travel companies.
    Companies can use pictures, both still and
    moving, to display their product. Customers can
    make reservations and pay for products directly
    from the Internet.

  • Franchising is a method of doing business by
    which a franchisee is granted the right to engage
    in offering , selling or distributing goods or
    services under a marketing format that is
    designed by the franchisor. The franchisor
    permits the franchisee to use its trademark,
    name, and advertising.
  • The Advantages of the franchise to the
    franchisee are
  • Recognition of brand
  • Less chance of a business failure
  • National advertising, premade advertisements, ad
    marketing plans.
  • Faster business growth
  • Helps with site selection
  • Architectural plans
  • Operational systems, software, and manual to
    support the systems.
  • National contracts with suppliers
  • Product development
  • Consulting
  • Helps with financing

  • The Disadvantages of purchasing a franchise
  • Fees and royalties are required
  • It limits the products sold and the recipes used
  • The franchisee is often required to be open a
    minimum number of hours and offer certain
  • A poorly operated company can affect the
    reputation of the entire chain.
  • The franchisors performance affects the
    profitability of franchisees.
  • Some franchisees may not benefit from national
    advertising as much as other franchisees-often a
    source of conflict.

  • The advantages of franchising for the franchisor
  • Receives a percentage of gross sales
  • Expands brand
  • Support for national advertising campaign
  • Negotiating support for national contracts with
  • The disadvantages of a franchise for a
  • There are limits on other options of expanding
  • Fran
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