Managing the Marketing Mix
All questions are compulsory
a. Explain the importance of the marketing mix for
an organization.
Marketing mix is popularly known as the four PsProduct, Price, Place and Promotion. However, for
service organisations, the marketing mix extends to 3
more elements, namely:process, people and physical
evidence. Marketing mix is the means by which a
marketing strategy is implemented. A marketing mix, is a
collaboration of efforts among 6P’s in the tourism
industry. Each member of the 6P’s contribute to success
in different yet important ways. Each of these elements
must be integrated and should complement each other
and improper management of even 1P,would act
negatively on the total marketing mix.
b. Explain the product life cycle for a product offered
by a spa of your choice.
 Introductory stage(Birth)
 Product-full scale launch
 Distribution-selective distribution to target
early majority
 Pricing-high costs and negative profits
 Promotion-targeted to create product
awareness and benefits
 Growth stage
 Product-growing sales,competitor’s
antrants,etc.
 Distribution-wider distribution as a key goal
 Pricing-prices are reduced to increase profits
and competitiveness
 Promotion-branding as a distinctive factor
 Maturity stage
 Product-decline stage,growth rate,market
saturation
 Distribution-mass market
 Pricing-niche marketers emerge
 Promotion-marginal competitors and heavy
promotions
 Decline stage
At this stage ,a company has three options:
 Maintain product-let the product die gradually
at it’s natural pace
 Harvest product-generate the maximum
revenue
 Discontinue product-withdraw the product
from the market
c. Briefly explain the characteristics of a hospitality
products.
Intangible-the inability of services to be touched,
seen, tasted, heard or left in the same manner that
goods can be sensed.
Inseparable-the inability of the production and
consumption of a service to be separated.
Consumers must be present during the production
Heterogeneous-the variability of the inputs and
outputs of services which cause services to tend to
be less standardised and uniform than goods
Perishable-the inability of services to be stored,
warehoused or inventoried
d. Identify and briefly explain the factors that an
organisation should take into consideration, when
setting prices for its products and services.
Price is influenced by the following factors:
Economic influence: Supply & Demand-change in
demand with the change in price and income.
Competitor’s price: Competitor’s selling the same or a
substitute product influence a pricing decision.
Quality Conations: High price is often taken as being
synonymous with quality.Price reflects product’s image.
e. A leading five star hotel is planning to open up a
new wing which is targeted at guests visiting for
leisure purposes. Identify the pricing methods that
can be taken into consideration in setting a price for
its rooms.
There are many strategic and tactical pricing which
organisations adopt. The common ones are: Mark-up
pricing,premium pricing,contribution margin
pricing,cost-based pricing,discounting,seasonal discounts
and time factors.
1. Mark-up Pricing/Cost-Plus Pricing= Uses the cost
of buying the product from the producer,plus
amounts for profit and for expenses not otherwise
accounted for.The total determines the selling price.
2. Premium pricing= In premium pricing, the intention
is to price high in the long-term,using price as an
indication of quality or symbolic value,as with the
case of high s tatus holidays.
3. Cost based pricing=Pricing based on the actual cost.
4. Contribution margin pricing=Refers to the amount
left after a cost of the product is subtracted from its
selling price.
5. Discounting= Price the products giving discounts
due to various reasons such as high
competition,reduction in demand,etc.
6. Yield Management-Instead of using a cost-based
pricing method,yield management is a supply and
demand driven approach.Yield management has
been designed to sell as many rooms as possible
while generating the maximum rate possible at any
given level of demand.
7. Package prices=Selling a package of goods and
services,instead of individual items,can be
advantageous to both hotel and travel
agencies.Packages can be designed with specific
target markets in mind that therefore,can appeal to
particular target markets.Properly designed
packages can also enhance customer satisfaction by
serving their special needs.