Marketing
Demands
•
•
•
is the process by which companies create value
for customers and build strong customer
relationships in order to capture value from the
customers in return. (Kotler et al. 2017).
art and science of finding, retaining and growing
profitable customers.
•
•
5 Core Marketing Concepts:
1. Needs, Wants, Demands
2. Market Offerings (Products. Service.
Experience)
3. Value, Satisfaction and Quality
4. Exchange, transactions and relationships
5. Markets
A demand is created when buying power backs a
person’s want (exist when a person is able and
willing to buy).
Demands are constantly changing.
Many young adults would love to own a car but
it remains a want if the person could not afford
to have one. Only those who have the money to
purchase the product would be considered as
part of the demand.
Market offerings
• products, services & experiences.
• Consumer’s needs & wants are fulfilled through market
offerings.
• Market offerings are some combination of products,
services, information, or experiences offered to a market
to satisfy a need or want.
• Market offerings are not limited to physical products,
they also include services and other entities.
Products
• Any tangible product that can be offered to a market
for attention, acquisition, use or consumption in which
might satisfy a want or a need.
Services
Needs - Human needs are states of felt deprivation.
Thing that people cannot live without.
This Includes:
a) Basic physical needs - e.g., foods, shelters,
clothing, etc.
b) social needs - e.g., sense of belongingness and
love, etc.
c) Individual needs - e.g., knowledge, selfconfidence, etc.
• These needs were not created by marketers; they are
a basic part of human makeup.
Wants
Wants - are people’s needs that are molded by culture
and individual personality.
Example: - I’m hungry, I need food, but I want rice not
bread. -I need shelter, but I want an air- conditioner
room.
• Any activity or benefit offered for sale that are
essentially intangible and do not result in the ownership
of anything.
• Other entities Include persons, places, organizations,
information and ideas.
Experience
- creating pleasant and lasting memories
Customer Value
• The difference between benefits that the customer
gains from owning and/or using a product and the costs
of obtaining the product.
Customer Satisfaction
•
Refers to the difference between the Buyer’s
expectations and the perceived performance of
the product.
•
•
•
if the product performs less than expected, the
customer is dissatisfied.
if the product performs as expected, the
customer is satisfied.
if the product performs better than expected,
the customer is delighted.
- Satisfied customers will buy again & tell other about
their good experiences.
- Dissatisfied customers switch to other competitors
& criticize the product to others.
•
•
Customer satisfaction is closely linked to quality.
Quality is believed to have a direct impact on
product performance, hence, customer
satisfaction.
Quality is defined by the customer.
Quality is what the customer say it is.
Marketers must set the right level of expectations.
-
If they set expectations too low, they may satisfy
those who buy but fail to attract enough buyer.
If they raise expectations too high, buyer will be
disappointed.
Customer value & customer satisfaction are key
building blocks for developing & managing
customer relationships.
Exchange, Transactions and Relationships
•
•
Marketing occurs when people decide to satisfy
needs & wants through beneficial exchanges.
Exchange is the act of obtaining a desired object
from someone by offering something in return.
Five conditions must exist for an exchange to occur are:
1. There are at least two parties.
2. Each party has something that may be of value
to the other party.
3. Each party is capable of communication and
delivery.
4. Each party is free to accept or reject the other
party’s offer.
5. Each party believes it is appropriate or desirable
to deal with the other party.
Relationship
•
•
•
•
•
•
Quality
•
•
•
A transaction is an exchange between two
parties. It is marketing’s unit of measurement.
•
However, if the parties are involved in repeated
transactions, relationship may be built up as a
result of frequent transactions.
Relationship is the tie between a customer and
its product or the producer of the product.
Exchanges and transactions must be continuous
to sustain a firm’s operation.
Marketers want to build strong relationships by
consistently delivering superior customer value.
Build good relationships and profitable
transactions will follow.
Beyond attracting new customers and creating
transactions, the goal is to retain customers and
grow their business with the company.
The concept of transactions leads to the concept
of a market.
Market - is a set of actual and potential buyers of a
product or service.
•
•
These buyers share a particular need or want
that can be satisfied through exchange
relationships.
Marketing means managing markets to bring
about profitable customer relationships.
A market contains the following customers:
• Consumer Market: Customers who buy products for
their own consumption. They are the end users of the
product.
• Business market: Customer who buy products for
further processing, reselling, renting and not for own
personal consumption.
• Government market: Government bodies and related
agencies who buy products in order to provide services
to the public.
• Reseller market: Customers who buy goods to resell
the goods to get profits.
• International market: Customers in other countries,
including consumers, producers, resellers and
governments.
Marketing
•
is the process by which companies create value
for customers and build strong customer
relationships in order to capture value from the
customers in return. (Kotler et al. 2017).
•
art and science of finding, retaining and growing
profitable customers.
Demographic Segmentation
•
•
Demographic Market Segmentation Examples
Marketing Management
• the art and science of choosing target markets and
building profitable relationship with them.
Marketing Manager
• a person who is involved in marketing analysis,
planning, implementation and control activities.
-
Market Segmentation is the activity of dividing a broad
consumer or business market, normally consisting of
existing and potential customers, into sub-groups of
consumers (known as segments) based on some type of
shared characteristics.
• is the process of dividing a market of potential
customers into groups, or segments, based on different
characteristics. The segments created are composed of
consumers who will respond similarly to marketing
strategies and who share traits such as similar interest,
needs, or locations.
-
-
The process of segmenting markets is based on
the principle that it is virtually impossible to
serve all markets at the same time.
“to target all is to target none at all”
Demographic segmentation is one of the most
popular and commonly used types of market
segmentation.
It refers to statistical data about a group of
people.
-
• Age
• Gender
• Income
• Family Situation/Size
• Education
• Ethnicity
Where the above examples are helpful for segmenting
Business to Customer (B2C)audiences, a business
might use the following to classify a Business to
Business (B2B) audience:
- Company size
- Industry
- Job function
Because demographic information is statistical and
factual, it is usually relatively easy to uncover using
various sites for market research.
• A simple example of B2C demographic segmentation
could be vehicle manufacturer that sells a luxury car bran
(ex. Maserati). This company would likely target an
audience that has a higher income.
• Another B2B example might be a brand that sells an
enterprise marketing platform. This brand would likely
target marketing managers at larger companies (ex. 500+
employees) who have the ability to make purchase
decisions for their teams.
Psychographic Segmentation
• Psychographic segmentation categorizes audiences and
customers by factors that relate to their personalities and
characteristics.
Psychographic Market Segmentation Examples:
-
Personality traits
Values
Attitudes
Interests
Lifestyles
Psychological influences
Subconscious and conscious beliefs
Motivations
Priorities
• Psychographic segmentation factors are slightly more
difficult to identify than demographics because they are
subjective. They are not data-focused and require
research to uncover and understand.
• For example, the luxury car brand may choose to focus
on customers who value quality and status.
• While the B2B enterprise marketing platform may
target marketing managers who are motivated to
increase productivity and show value to their executive
team.
o
o
Klook, one of the fastest-growing travel platform
in the East Asia region, is no stranger to the
psychographic Segmentation. Knowing that
customers are traveling for different reasons,
they created their website interface to allow
flexibility to select from the destination or things
do to (before needing a destination).
This is because Klook realized some travelers
decide where to go based on the activities
available.
Behavioral Segmentation
• While demographic and psychographic segmentation
focus on who a customer is, behavioral segmentation
focuses on how the customer acts.
Behavioral Market Segmentation Examples:
o
o
o
o
Purchasing habits
Spending habits
User status
Brand interactions
Behavioral segmentation requires you to know about your
customer’s actions. These activities may relate to how a
customer interacts with your brand or to other activities
that happen away from your brand.
A B2C example in this segment may be the luxury car brand
choosing to target customers who have purchased a highend vehicle in the past three years.
The B2B marketing platform may focus on leads who have
signed up for one of their free webinars.
Geographic Segmentation
• Geographic segmentation is the simplest type of market
segmentation. It categorizes customers based on
geographic borders.
Geographic Market Segmentation Examples:
-
ZIP code
City
Country
Radius around a certain location
Climate
Urban or rural
• Geographic segmentation can refer to a defined
geographic boundary (such as a city or ZIP code) or type
of area (such as the size of city or type of climate).
• An example of geographic segmentation may be the
luxury car company choosing to target customers who
live in warm climates where vehicles don’t need to be
equipped for snowy weather.
• The marketing platform might focus their marketing
efforts around urban, city centers where their target
customer is likely to work.
The Marketing Mix- 4 P’s
create, build and maintain beneficial exchanges with
target buyers for the purpose of achieving organizational
objectives. (Kotler & Armstrong 2008)
• The art and science of choosing target markets and
building profitable relationships with them.
•
•
Marketing Management - involves managing
demand, which in turn involves managing customer
relationships. also called demand management.
The company wants to select only customers that it
can serve well and profitably.
Marketing Management Philosophies
The Production Concept
•
What Are the 4 Ps?
• These are the four Ps: the product (the good or service);
the price (what the consumer pays); the place (the
location where a product is marketed); and promotion
(the advertising).
• The four Ps of marketing are the key factors that are
involved in the marketing of a good or service.
• They are the product, price, place, and promotion of a
good or service. Often referred to as the marketing mix,
the four Ps are constrained by internal and external
factors in the overall business environment, and they
interact significantly with one another.
• The 4 Ps are used by companies to identify some key
factors for their business, including what consumers
want from them, how their product or service meets or
fails to meet those needs, how their product or service is
perceived in the world, how they stand out from their
competitors, and how they interact with their customers.
• It is said that the success of marketing depends on the
company’s plan as far as marketing mix is concerned.
•
A High quality, Top performing product sold at a
reasonable price at convenient and accessible
places backed up by intensive promotion spell
MARKETING SUCCESS.
Marketing Management
• Marketing management is the analysis, planning,
implementation, and control programs designed to
•
The production concept holds that consumers
will favor products that are available & highly
affordable - therefore, management should
focus on production and distribution efficiency.
Management may become so focused on
production systems they forget the customer.
Example:
•
•
•
One of the best examples of the production
concept is Henry Ford’s Model. T. Henery Ford is
the father of the production line.
By developing an efficient assembly line, Ford
was able to bring the cost of the Model T down
from around $800 to just under $300, putting
affordable transportation into the hands of
average consumers in the United States.
The biggest secret to Ford’s assembly line is that
he built one car --the Model T.
The Product Concept
• The Product Concept has the proposition that
consumers will favor those products that offer the
attributes like quality, performance and other
innovative features.
• Managers focus on developing superior products
and improving the existing product lines over a
period of time.
EXAMPLE:
APPLE CO
•
Apple is a well-known company for its gadgets
and technologies such as the great iPhone. They
started their iPhone invention from iPhone 3g in
2009. In order for them to follow the product
concept, they evolved themselves from iPhone
3gs to the iPhone 6+. As a result, their marketing
plan is getting better and better throughout the
years.
The Selling Concept
• The Selling Concept proposes that customers, be
individuals or organizations will not buy enough of the
firm’s products unless they are persuaded to do so
through selling effort.
• So companies should undertake selling and promotion
of their products for marketing success.
Example:
Sun Life Insurance
•
supports community trade, activate Self Esteem, Defend
Human Rights, and overall protection of the planet. Thus,
it is completely following the concept of Societal
Marketing.
Social Responsibility in Marketing:
Social responsibility in marketing involves focusing
efforts on attracting consumers who want to make a
positive difference with their purchases. Many
companies have adopted socially responsible elements
in their marketing strategies as a means to help a
community via beneficial services and products.
(Investopedia)
How Social Responsibility in Marketing Works?
•
Short term rapid growth through advertising
The Marketing Concept
• The marketing management philosophy that holds
that achieving organizational goals depends on
determining the needs and wants of target markets
and delivering desired satisfaction more effectively
and efficiently than competitors.
Example:
Product/Service
•
•
•
Toyota Motors
•
-
-
Does market research and understanding
consumer need therefore providing value to
customer
Attains profit through customer loyalty in long
run.
The Societal Concept proposes that the enterprise’s
task is to determine the needs, wants and intentions
of the target market and to deliver the expected
satisfaction more effectively and efficiently than the
competitors in a way to preserve or enhance the
consumer’s and society’s well- being.
•
•
•
• Body Shop is a cosmetic company found by Anita
Roddick. The company uses only vegetable-based
materials for its products. It is also against Animal testing,
offering products at reasonable and affordable
prices • providing a reasonable return of
investments
setting costs at reasonable levels without
sacrificing quality
setting reasonable mark-up
Place
•
•
Example:
Body Shop
offering products/services of superior quality
and value
preferring the use of locally sourced materials to
imports.
ensuring environmental protection and
preservation in waste disposal
considering the effects of product/service to
public health, safety and moral
Price
The Societal Marketing Concept
•
Recyclable packaging, promotions that spread
awareness of societal issues and problems, and
directing portions of profits toward charitable
groups or efforts are examples of social
responsibility marketing strategies
•
•
ensuring wide availability of the product/service
treating and paying the sales force fairly and
competitively
considering accessibility
ensuring prompt delivery at reasonable
Promotion
•
•
making promises that you can keep
adhering to truth in advertising
•
•
sponsoring activities beneficial to the society and
community
ensuring fair and healthy competition
The Company
•
•
•
•
•
MARKETING ENVIRONMENT
“Marketing environment refers to the external factors or
forces that affect the company’s ability to develop and
maintain successful relationship with its target
customers” -Philip Kotler
Marketing Environment consists of two components:
•
Micro Environment
•
Macro Environment
MICROENVIRONMENT
The microenvironment refers to the forces that are close
to the company and affect its ability to serve its
customers.
Marketing Managers
Top Management
Finance Department
Accounting
Housekeeping
Marketing decisions must be made within the strategies
and plans made by top management.
Under the marketing concept, all managers, supervisors,
and employees should work in harmony to provide
superior customer value and satisfaction. - all
departments impact marketing plans & actions
•
Company organization consists of Board of
Directors and functional managers.
•
Marketing plans are drawn up as per the
philosophy of Top management.
•
It influences the organization directly.
•
It includes the company itself, its
suppliers, marketing intermediaries, customer
markets, competitors, and the public.
•
Marketing decisions like new products,
expansion, etc. depend on the support of top
management.
 Marketing management’s job is to build
relationships by creating customer value &
satisfaction.
•
It depends upon finance, managerial skills,
organization’s strengths and weaknesses.
 The success of marketing plans requires working
closely with the company’s microenvironment.
Competitors
•
Major actors in the Company’s Microenvironment.
The marketing concept holds a successful
company must satisfy the needs and wants of
consumers better than its competitors.
o
every company faces a broad range of
existing competitors
•
Marketers must adapt to the needs of their
target customers, and also to the strategies of
other companies serving the same target
markets.
•
Companies must gain strategic advantage by
strongly positioning their product in the minds
of consumers.
•
A company should monitor three variables when
analyzing each of its competitors:
1. Share of Market - % share of Target market
2. Share of Mind -Q-tip, Xerox, Kleenex,
Colgate
3. Share of Heart - Repeat Purchase, Referrals
than simply as channels through which they sell
products.
Supplier
•
•
•
•
Provide resources needed to produce goods and
services.
Important link in the “value delivery system.”
Most marketers treat suppliers like partners.
Marketers must watch supply availability and
pricing
Customer
•
•
•
Purchase requirements vary from customer to
customer
Influenced by cultural, social and psychological
factors
They are large in number
Publics
Intermediaries
•
Marketing intermediaries help the company
promote, sell, and distribute its goods to the final
buyers.
•
Hospitality intermediaries include travel agents,
wholesale tour operators, and hotel
representatives
•
A wholesaler creates packages including air fare,
ground
transportation,
and
hotel
accommodations.
•
-promoted through newspaper advertising &
travel agents
•
Reduced prices through volume purchasing
enables the wholesaler to pay the travel agent a
commission for selling the product, give the
customer a good price, and produce a profit.
•
Perishability of hotel rooms means that most
hotels still need help from intermediaries.
•
Today’s marketers recognize the importance of
working with intermediaries as partners rather
•
A group that has an actual or potential interest
in or impact on an organization
Seven publics include:
1. Financial Public
• Financial
publics
influence
the
company’s ability to obtain funds.
• Banks,
investment
houses, and
stockholders are the major financial
publics.
2. Media Public
• Media publics carry news, features, and
editorial opinions. They include
newspapers, magazines, and radio, &
TV.
3. Government Public
• Management must take government
developments into account. Marketers
must often consult the company’s
lawyers on issues of product safety,
truth in advertising, and other matters.
4. Citizen-action Public
• A company’s marketing decisions may
be questioned by minority groups,
consumer organizations, environmental
groups, and others.
• Its public relations department can help
it stay in touch with consumer and
citizen groups.
5. Local Public
•
6. General Public
•
A company needs to be concerned
about the general public’s attitude to its
products & activities.
• The public’s image of the company
affects its buying.
•
7. Internal Public
• Internal publics include workers,
managers, volunteers, and the board of
directors.
• Large companies use newsletters and
other means to inform and motivate
their internal publics.
MACROENVIRONMENT
•
•
The macroenvironment is the set of external
factors and forces, not controlled by the
company, that influence its development.
It mainly includes demographic, economic,
cultural, technological, legal or political
elements.
marketers or that are affected by marketing
activities.
•
Topographical factors may affect the demand
pattern.
•
Ecological factors have recently assumed great
importance.
Technological environment
•
The technological environment is perhaps the
most dramatic force now shaping our destiny.
•
Forces that create new technologies, create new
product and market opportunities.
•
Technological Innovation.
•
Role of research and development.
Political environment
•
The political environment consists of laws,
government agencies, and pressure groups that
influence and limit various organizations and
individuals in the given society.
•
It has a close relationship with the economic
system and economic policy.
Cultural Environment
•
Cultural Environment of a nation determines the
value system of the society which in turn affects
the functioning of the Business.
•
Sociological factors
Future Competitors
•
The entrance of future competitors is difficult to
predict & can have a major effect on a business.
Demographic Environment
•
•
Responding to the Marketing Environment
•
Demography is the study of human populations
Demographic Environment is a major interest to
marketers.
–
Economic Environment
•
The economic environment consists of factors
affecting consumers purchasing power and
spending patterns both across and within their
world markets.
The natural environment involves the natural
resources that are needed as inputs by
they passively accept the marketing
environment
and
do not try to change it
•
Marketing management cannot always affect
environmental forces; in many cases, it must
settle for simply watching and reacting to the
environment.
•
Whenever possible, smart marketing managers
take a proactive approach to the publics and
forces in their marketing environment.
Natural environment
•
Many companies view the marketing
environment as an “uncontrollable” element to
which they must adapt.
Responding
to
the
Environmental Scanning
•
•
Marketing
Environment
Use of an environmental scanning plan has
proven beneficial to many hospitality
companies.
o determine the environmental areas to
be monitored
o determine how the information will be
collected, including information sources,
frequency & who will be responsible
o implement the data collection plan
o analyze the data & use them in the
market planning process
Part of the analysis is weighing importance of
trends to keep them in proper perspective.
Use of Information:
•
information must be reliable, timely &
used
in
decision making
Researchers must put less emphasis on data &
more on the interpretation of those data.
•
Characteristics that place the firm at a
disadvantage relative to others. Detract the
organization from its ability to attain the core
goal and influence its growth. Weaknesses are
the factors which do not meet the standards we
feel they should meet. However, weaknesses are
controllable. They must be minimized and
eliminated.
•
Examples - Limited financial resources, Weak
spending on R & D, Very narrow product line,
Limited distribution, Higher costs, Out-of- date
products / technology, Weak market image,
Poor marketing skills, Limited management
skills, Under- trained employees.
Opportunities
•
Chances to make greater profits in the
environment - External attractive factors that
represent the reason for an organization to exist
& develop. Arise when an organization can take
benefit of conditions in its environment to plan
and execute strategies that enable it to become
more profitable. Organization should be careful
and recognize the opportunities and grasp them
whenever they arise..
•
Examples - Rapid market growth, Rival firms are
complacent, Changing customer needs/tastes,
New uses for product discovered, Economic
boom, Government deregulation, Sales decline
for a substitute product.
SWOT Analysis
•
•
A SWOT analysis is a compilation of your
company's strengths, weaknesses, opportunities
and threats. The primary objective of a SWOT
analysis is to help organizations develop a full
awareness of all the factors involved in making a
business decision.
SWOT analysis is a framework used to evaluate a
company's competitive position and to develop
strategic planning. SWOT analysis assesses
internal and external factors, as well as current
and future potential.
Strength’s
•
Characteristics of the business or a team that
give it an advantage over others in the industry.
Positive tangible and intangible attributes,
internal to an organization. Beneficial aspects of
the organization or the capabilities of an
organization, process capabilities, financial
resources, products and services, customer
goodwill and brand loyalty.
.Examples - Abundant financial resources, Wellknown brand name, Economies of scale, Lower
costs [raw materials or processes], Superior
management talent, Better marketing skills,
Good distribution skills, Committed employees.
Weaknesses
It is never sufficient simply to collect data about
the environment.
–
•
•
Threats
•
External elements in the environment that could
cause trouble for the business - External factors,
beyond an organization’s control. Arise when
conditions in external environment jeopardize
the reliability and profitability of the
organization’s business. Compound the
vulnerability when they relate to the
weaknesses. Threats are uncontrollable. When a
•
threat comes, the stability and survival can be at
stake.
• Explain how companies analyze and use marketing
information
Examples - Entry of foreign competitors,
Introduction of new substitute products,
Product life cycle in decline, Changing customer
needs/tastes, Rival firms adopt new strategies,
Increased government regulation, Economic
downturn.
The Marketing Information Systems
•
The Two-Part Question for SWOT Analysis
A marketing information system (MIS)
consists of people, equipment, and
procedures to gather, sort, analyze,
evaluate, and distribute needed, timely, and
accurate information to marketing decision
maker.
1. Is the factor within the control of the company
or is it beyond the company’s control? If your
answer is within, then it belongs to the internal
environment. If beyond, is part of the external
environment.
2. Is the factor expected to affect company
operations positively or negatively? If positively,
it may be either a strength or an opportunity. If
negatively, it can be a threat or weakness.
Internal Factors
External Factors
Assessing Information Needs
• A good marketing information system managers
would like to have against that which they really
need & is feasible to obtain.
• Some managers ask for whatever data they can
get without thinking carefully about cost or
usefulness.
• Other busy managers may fail to ask for things
they need to know, or managers may not ask for
some types of information that they should have.
The Marketing Information System and Research
OBJECTIVES
• Explain the marketing information system concept.
• Outline the marketing research process, including
defining problem & research objectives, developing
the research plan, implementing the research plan,
and interpreting and reporting the findings.
Obtaining Data
•
•
The costs of obtaining, processing, storing,
and delivering information can add up
quickly.
The company must estimate the value of
having an item of information against the
costs of obtaining it.
•
–
–
Sometimes
additional
information
contributes little to improving a manager’s
decision.
–
Developing Information – Internal Data
• Many companies build extensive internal
databases, of consumer & market information
obtained from data sources within the company
network.
• Internal data are accessed more quickly & cheaply
than other sources, but presents some problems.
• Every company contains more information than any
manager can possibly know or analyze
• The company brings order to its information gold
mine, so its managers can easily make informed
decisions.
• Increasingly, companies are creating data
warehouses to house customer data in an
accessible location.
• Managers can use information gathered from these
and other sources to evaluate performance and
detect problems and opportunities.
Developing Information - Guest History Information
• Guess Information is vital to…
– improving service
– creating effective advertising & sales
promotion programs
– developing new products
– improving existing products
– developing marketing and sales plans
– development & use of an effective
revenue management program
– a hospitality company must be very
careful not to infringe on privacy rights
of guests or to disturb them
• An amazing amount of this information is
available from internal records, which requires
interfacing with other departments, such as
reservations and accounting.
Guest Information Management – Acquisition
•
•
•
•
•
•
•
•
Information concerning guest trends is vital to
planning and revenue/yield management, and
include the following:
– booking patterns
– cancellations
– conversion percentages (percentage of
inquiries to reservations)
A system for obtaining guest information may
include any or all of these techniques:
Handwritten Journals, Card Files from Guest
Registrations and Personal Observations.
Guest Comment Cards.
– provide useful information & insights
into problem areas
Listening to & Speaking with Guests.
– an excellent way to find out what guests
think, and management hears it
firsthand
Automated Systems.
– decreasing cost & increasing capacity of
automated guest history systems will
allow hotels to create close relationships
with their customers once again
Mystery Shoppers
– a $1.5-billion industry.
– companies often hire disguised or
mystery shoppers to pose as customers
and report back on their experience
– A mystery shopper works best if there is
a possibility for recognition and reward
for good job performance
Company Records
Point-of-Sale Information.
– a POS system can collect information
about individual restaurant patrons
where credit cards are used
MARKETING INTELLIGENCE
Internal & External Sources
•
Developing Information - Guest Information Trends
•
overbooking patterns
historical trends on occupancy for
prime, shoulder, and low seasons
yield patterns by season
•
•
Marketing intelligence includes everyday data
about developments that helps managers
prepare and adjust marketing plans and shortrun tactics.
It can be gathered by executives, front-desk
staff, service staff, purchasing agents, and sales
force.
Hotel owners and managers are essential parts
of a marketing intelligence system.
•
A hospitality company must encourage
suppliers, convention and tourist bureaus, and
travel agencies to pass along important
intelligence.
External Sources


It is worthwhile to encourage gathering of this
data by treating vendors, salespeople, and
potential employees in a friendly and receptive
manner.
Members of management should be encouraged
to
join
community
and
professional
organizations.
– where they are likely to obtain
essential marketing information.
Sources of Competitive Information
•
•
•
•
Competitive intelligence is available from
trade magazine articles, competitors’
reports, speeches, press releases, brochures,
and advertisements.
– managers
should
also
visit
competitors’ premises regularly
Using the Internet, marketers can search
competitor names, events, or trends & see
what turns up
– Companies can subscribe online
databases and information search
services. Dialog, DataStar, LEXISNEXIS, Dow Jones News Retrieval,
UMI ProQuest, and Dun &
Bradstreet’s Online Access.
Hospitality managers can subscribe to
newsletters such as National Restaurant
Association
Smart
Brief
and
hotelmarketing.com
Associations sometimes collect data from
member companies, compile it, and make it
available to members for a reasonable fee.
10 Common Activities
• The ten most common activities in which marketing
researchers engage are..
– measurement of market potentials
– market-share analysis
– determination
of
market
characteristics
– sales analysis
– studies of business trends
– short-range forecasting
– competitive product studies
– long-range forecasting
– marketing information systems
studies
– testing
Conducting Research
•
•
Marriott
•
MARKETING RESEARCH
•
Marketing research identifies and defines
marketing opportunities & problems, monitors and
evaluates marketing actions & performance, and
communicates the findings and implications to
management.
A company can conduct marketing research by
employing its own researchers or hiring
outside researchers.
Most large companies—more than 73%—
have their own marketing research
departments.
Frank Camacho, former vice president of
corporate marketing services for Marriott,
listed Marriott’s research priorities as follows:
- market segmentation and sizing
- concept development and product
testing
- price-sensitivity assessment
- advertising
and
promotions
assessment
- market tracking
- customer satisfaction
Defining the Problem and Research Objectives
•
Managers must work closely with researchers
to define the problem & research objectives.
•
•
•
If they know little about marketing research,
they may accept the wrong information, draw
wrong conclusions, or request more data than
they need.
• marketing researchers can help the
manager define the problem and use the
findings correctly
Assuming the problem is well defined, the
manager and researcher must set research
objectives.
A marketing research project can have one of
three types of objectives:
• exploratory research, to gather preliminary
information that will help define the
problem and suggest hypotheses
• descriptive research, to describe size &
composition of the market
• causal research, to test hypotheses about
cause- and-effect relationship
The Research Plan - Specific Information Needs
•
•
The second marketing research step is
determining needed information & making a
data collection plan.
• 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.
• primary data consist of information
collected for the specific purpose at hand
• secondary data consist of information
already in existence somewhere, having
been collected for another purpose.
Research Approaches
•
•
•
•
Three basic research approaches are
observations, surveys, and experiments.
Observational research is gathering of primary
data by observing relevant people, actions, and
situations.
Survey research, best suited to gathering
descriptive information, can be structured or
unstructured.
Experimental Research is designed to capture
cause-and- effect relationships by eliminating
competing explanations of the observed
findings.
Contact Methods
•
Information can be collected by three methods.
- mail questionnaires can collect large
amounts of information at a low cost per
respondent.
- telephone interviewing allows quick data
gathering
- personal interviewing takes two forms:
individual (intercept) and in-depth method
The Research Plan - Primary and Secondary Data
•
•
•
•
Researchers usually start by gathering secondary
data, usually obtained more quickly and at a
lower cost than primary data.
When secondary sources can’t provide all the
needed information, the company must collect
primary data.
Data collected casually can be useless or, even
worse, misleading.
Designing a plan for primary data collection calls
for decisions about research approaches,
contact methods, a sampling plan, and research
instruments.
Table 5-5 Strengths and Weaknesses of the Three
Contact Methods.
Online Interviews
•
Online research is estimated to make up over
35% of all survey-based research.
•
•
•
Smart companies are using them to augment
rather than replace more traditional methods.
• a director of marketing states, “Online is
not a solution in and of itself …but it does
expand our toolkit.”
Internet surveys are quick and can be
inexpensive.
• response rate can be a problem if they are
not properly designed and targeted
Simple technology for a consumer market is
critical.
• don’t expect respondents to wait for
graphics to load
physically present at the event. Courtesy of Active
Group. Used with permission.
In-Depth Interview
•
•
•
Focus Group
•
•
•
Focus groups are usually conducted by inviting 610 people to gather with a trained moderator to
talk about a product, service, or organization.
The moderator starts with broad questions
before moving to more specific issues.
• encouraging open and easy discussion to
foster group dynamics that will bring out
true feelings and thoughts
Focus group interviewing is becoming a major
marketing research tool for gaining customer
insight.
• especially suited for use by managers of
hotels and restaurants, who have easy
access to their customers
In-depth surveys, another form of qualitative
personal interviewing, can be used when it is
difficult to put together a focus group.
Another form of qualitative personal
interviewing, individual interviews using openended questions. – they allow a researcher to
probe & gain insight into consumer behavior
Qualitative research is useful to gain insight into
definitions and concepts as well as insight into
survey results.
Sampling Plan
•
•
•
-
Marketing researchers usually draw conclusions
about large consumer groups by taking a sample.
Ideally, the sample should allow accurate
estimates of the thoughts & behaviors of the
larger population.
Designing the sample calls for four decisions.
who will be surveyed?
how many people should be surveyed?
how should the sample be chosen?
when will the survey be given?
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 use a questionnaire, by far
the most common survey instrument.
• because there are many ways to ask
questions, the questionnaire is very flexible
Questionnaires should be developed and tested
carefully before being used on a large scale.
• to avoid errors in a carelessly
Research Instruments – Questionnaires
•
Active Group has a feature called Client Lounge that
allows members of the organization conducting the
focus group. Managers can view the focus group live on
the Internet and discuss the event just as if they were
The marketing researcher must decide what
questions to ask, what form the questions should
take, and how to word and sequence the
questions.
•
•
•
•
Questionnaires often omit questions that should
be answered and include questions that cannot,
will not, or need not be answered.
The form of the question can influence the
response.
• closed-ended questions include all possible
answers, and subjects are asked to choose
among them
• open-ended questions allow respondents
to answer in their own word
The researcher should use simple, direct,
unbiased wording and care should also be taken
in the ordering of questions.
Researchers in the hospitality industry must be
very careful in developing questions and
selecting the sample not to offend respondents
unwittingly
Research Instruments - Presenting the Research Plan
•
•
•
•
The marketing researcher should summarize the
plan in a written proposal.
The proposal should cover management
problems addressed, research objectives, data
to be obtained, sources of secondary
information or methods for collecting primary
data.
The proposal should include research costs and
how the results will aid management decision
making.
A written plan ensures the marketing manager
and researchers have considered all important
aspects of the research and agree on why & how
it will be done.
Implementing the Research Plan
•
•
•
•
The plan is put into action by collecting,
processing, and analyzing the information.
Data collection can be done by the marketing
research staff, or by outside firms.
• data collection is generally the most
expensive and most subject to error
The collected data must be processed and
analyzed to pull out important information and
findings.
The researcher must interpret the findings, draw
conclusions & report the conclusions to
management.
• interpretation should not be left entirely to
the researcher
Interpreting and Reporting the Findings
•
The researcher should avoid overwhelming
managers with numbers, statistical
techniques, and focus.
– management desires findings useful
in decision making
• Findings can be interpreted in different
ways, and discussions between researchers
and managers will help point to the best
interpretations.
• Interpretation is an important phase of the
marketing process, as the best research is
meaningless if a manager blindly accepts
wrong interpretations
– managers may also have biased
interpretation
• Information gathered can often benefit from
additional analysis to help interpret the
findings.
– such as advanced statistical analysis
to learn more about the
relationships within a set of data.
• Such analysis allows managers to go beyond
means and standard deviations in the data.
– mathematical models might also help
marketers make better decisions
•
Marketing information has no value until
managers use it to make better decision
•
Information must reach appropriate
marketing managers at the right time.
•
Recent developments in information
handling have led to a revolution in
information distribution.
– in some companies, marketing
managers can use a desk terminal to
tie into the company’s information
network
•
Such systems allow managers to obtain
needed information directly & quickly tailor
it to their needs.
•
Hospitality companies will increasingly use
decentralized
marketing
information
system
INTERNATIONAL MARKETING RESEARCH
•
International marketing researchers often
face more and different problems than
domestic researchers with homogeneous
markets within a single country.
•
Markets in many different countries often
vary dramatically in levels of economic
development, cultures and customs, and
buying patterns.
– in many foreign markets, the
international researcher has a
difficult time finding good secondary
data
Language Differences
•
–
•
Differences in cultures from country to
country cause additional problems for
international researchers.
language is the most obvious culprit
Translating a questionnaire to another
language is far from easy, and many points
are “lost” because idioms, phrases, and
statements mean different things in
different cultures.
British and American English
Cultural Differences
•
•
Buying roles & consumer decision processes vary
from country to country, complicating research.
Consumers attitudes vary toward marketing
research, and people in one country may be very
willing to respond; in others, nonresponse is a
major problem.
– customs in some Islamic countries
prohibit people from talking with
strangers
– high functional illiteracy rates in
many countries make it impossible
to use a written survey for some
segments
– middle-class people in developing
countries often make false claims in
order to appear well of
Necessary Research
•
•
Despite problems, the recent growth of
international marketing has resulted in a rapid
increase in the use of international marketing
research.
- global companies have little
choice but to conduct such
research
While costs & problems associated with
international research may be high, the costs of
not doing it—in terms of missed opportunities
and mistakes—might be even higher
MARKETING RESEARCH IN SMALLER ORGANIZATION
•
•
Managers of small businesses often believe that
marketing research can be done only by experts
in large companies with large research budgets.
Secondary data collection, observation, surveys,
and experiments can be effective for small
organizations.
•
•
Sources of Help
•
•
Many associations, chambers of commerce &
government agencies provide help to small
business.
– local newspapers often provide
information on local shoppers and
their buying patterns
Many colleges are seeking small businesses to
serve as cases for projects in marketing research
classes
– sales management classes are eager
to do sales blitzes for hotels
Less Complex, Still Important
•
•
•
Although informal research is less complex and
costly, it must still be done carefully.
Managers must think through the objectives of
the research, formulate questions in advance,
and recognize the biases systematically.
Meticulously planned & implemented low- cost
research can provide reliable information for
improving marketing decision making
KEY TERMs
•
•
•
•
•
Causal research. Marketing research to test
hypotheses
about
cause-and-effect
relationships.
Data warehouses collect data from a variety of
sources and store it in a one accessible location.
Descriptive research. Marketing research to
better describe marketing problems, situations,
or markets, such as the market potential for a
product or the demographics and attitudes of
consumers.
Ethnographic research. Trained observers
interact with and/or observe consumers in their
natural habitat.
Experimental research. The gathering of primary
data by selecting matched groups of subjects,
giving them different treatments, controlling
•
•
•
•
•
•
•
•
•
•
related factors, and checking for differences in
group responses.
Exploratory research. Marketing research to
gather preliminary information that will help to
better define problems and suggest hypotheses.
Internal data. Internal data consist of electronic
databases and non-electronic information and
records of consumer and market information
obtained from within the company
Marketing dashboards are like the instrument
panel in a car or plane, visually displaying
realtime indicators to ensure proper functioning.
Marketing information system (MIS). A
structure of people, equipment, and procedures
to gather, sort, analyze, evaluate, and distribute
needed, timely, and accurate information to
marketing decision makers.
Marketing intelligence. Everyday information
about developments in the marketing
environment that help managers to prepare and
adjust marketing plans.
Marketing research. The systematic design,
collection, analysis, and reporting of data and
findings relevant to a specific marketing
situation facing a company.
Mystery shoppers. Hospitality companies often
hire disguised or mystery shoppers to pose as
customers and report back on their experience.
Observational research. The gathering of
primary data by observing relevant people,
actions, and situations.
Primary data. Information collected for the
specific purpose at hand.
Sample. (1) A segment of a population selected
for marketing research to represent the
population. (2) Offer of a trial amount of a
product to consumers.
Secondary data. Information that already exists
somewhere, having been collected for another
purpose.
Survey research. The gathering of primary data
by asking people questions about their
knowledge, attitudes, preferences, and buying
behavior.
MARKETING ENVIRONMENT
C2 CASE ANALYSIS
•
In 1955, Ray Kroc, a 52-year-old salesman of
milkshake-mixing machines, discovered a string
•
•
•
•
•
•
•
•
•
•
-
-
•
of restaurants owned by Richard & Maurice
McDonald.
Kroc saw fast-food concept as perfect for
America’s on-the-go, time-squeezed, familyoriented lifestyles.
he bought the small chain for $2.7 million, &
McDonald’s grew to become the world’s largest
fastfeeder
More than 31,000 McDonald’s restaurants
worldwide now serve 52 million customers each
day, racking up systemwide sales of almost $60
billion annually
The Golden Arches are one of the world’s most
familiar symbols.
– other than Santa Claus, no character
in the world is more recognizable
than Ronald McDonald
Industry analysts say…
“the Golden Arches did for greasy spoons what
Holiday Inn did for roadside motels in the 1950s
and what Sam Walton later did for the discount
retail store.”
“McDonald’ s is much more than an ordinary
fast-food chain. It is a cultural mirror [that]
reflects the evolution of American eating habits.
While a changing marketplace provided
opportunities for McDonald’s, it also presented
challenges.
The company has struggled to address shifting
consumer lifestyles and its market share fell
more than 3% between 1997 and 2003.
in 2002 the company posted its first-ever
quarterly loss
What happened? In this age of obesity lawsuits
and $5 lattes, McDonald’s seemed a bit out of
step with the times.
consumers were looking for fresher, better
tasting food and more upscale atmospheres
McDonald’s was losing share to what the
industry calls “fast-casual” restaurants.
Panera Bread, Baja Fresh & Cosi were offering
more imaginative meals in more fashionable
surroundings
even the local supermarket offered a full
selection of prepared, ready-to-serve gourmet
meals to go
Americans were seeking healthier eating
options.
-
•
•
•
•
•
•
•
•
•
•
•
•
•
•
fast-food patrons complained about too few
healthy menu choices, and many were eating
less at fast-food restaurant
As the market leader, McDonald’s bore the brunt
of much of this criticism.
Reacting, in early 2003 McDonald’s announced a
turnaround plan—the “Plan to Win”—to better
align the company with the new marketplace
realities.
• McDonald’s began refocusing on what made it
successful: consistent products and reliable
service.
• To compete with the new fast-casual
competitors & expand its customer base,
McDonald’s experimented with new restaurant
concepts such as McCafé coffee shops now open
in 34 countries.
kids can still get their Happy Meals, but parents
can feast on more sophisticated fare
McDonald’s knows that as a marketing
environment changes, the company must
change with it.
says McDonald’s CEO James Skinner. “We ’ re
always evolving to meet the changing needs of
our customers.”
A company’s marketing environment consists of
the actors & forces outside marketing that affect
ability to build and maintain successful
relationships with its target customers.
offering both opportunities and threats
Successful companies know the importance of
watching & adapting to a changing environment
Managers who practice marketing will be the
trend trackers and opportunity seekers.
also spending time in customer & competitor
environments
Good marketers have disciplined methods for
collecting marketing environment information.
marketing intelligence & marketing research
Do a SWOT Analysis on McDonalds (The Golden Arches)
case. How did the company faced the challenges
(weaknesses and threats)? What is the importance or
advantage of environmental scanning in a business?
Strengths
•
•
•
•
Good strategic kitchen layout
consistent quality standards
Speedy transaction
Low-cost menu
•
established brand name; strong brand; popular
in the food industry
Weaknesses
•
•
•
•
conservative/ slow paced growth
conflict between the brothers and Ray
limited product portfolio
abundance of unhealthy food in the menu
Opportunities
•
•
expansion to different regions/ countries
changing lifestyle- fast paced, convenience
Threats
•
•
•
•
health issues/ obesity cases
increasing media coverage of negative health
implications associated with fast food
increasing awareness of customers about the
negative impacts of fast food on health
aggressive competition in the food industry