Learning Objectives Chapter 1: Marketing Defined 1. Define marketing and explain the six marketing fundamentals used in this book. 2. Explain the price of marketing concept. 3. Compare and contrast the roles of marketing during four evolutionary eras and describe the digital marketing era. 4. Describe the symptoms of production and sales orientation. 5. Explain the marketing myopia concept. Learning Objectives Chapter 1: Marketing Defined 6. Describe the characteristics of a marketing orientation and its benefits. 7. Explain the core principles of marketing. 8. Describe the environment for marketing in the hospitality and travel industry. 9. Explain the reasons for the increasing importance of marketing in the industry. Definition of Marketing Marketing is a continuous, sequential process through which management in the hospitality and travel industry plans, researches, implements, controls, and evaluates activities designed to satisfy both customers’ needs and wants and their own organization’s objectives. Six Marketing Fundamentals 1. Satisfying customer needs and wants. 2. Continuous nature of marketing. 3. Sequential steps in marketing. 4. Key role of marketing research. 5. Interdependence of hospitality and travel organizations. 6. Organization-wide and multi-department effort. The PRICE of Marketing P R I C E Planning Research Implementation Control Evaluation The Evolution of Marketing in Non-Service Industries 1920-1930 PRODUCTION ORIENTATION 1930-1950 SALES ORIENTATION 1950-1960 MARKETING DEPARTMENT 1960-1970 MARKETING COMPANY 1970-now SOCIETAL MARKETING Four Evolutionary Eras of Marketing Marketing Orientation The Digital Marketing Era Began in the 1990s Internet and World Wide Web E-commerce Ticketless travel/e-tickets Databases and database marketing Personal digital assistants (PDAs) CDs and DVDs Symptoms of Production and Sales Orientations 1. Planning is short-term. 2. Long-term decisions are made only when serious problems are encountered. 3. There is a definite reluctance to change. 4. Business growth is seen as being assured and current business volumes are viewed as guaranteed. 5. Providing the best or highest quality service is assumed to be an automatic guarantee of success (The Better Mousetrap Fallacy). Symptoms of Production and Sales Orientations (Continued) 6. Little is known about customers; research is not given a high priority. 7. Promotions stress service or product features, not customer's needs. 8. Customers are given only what they ask for and what is normally provided. 9. Decisions are made from a production or sales perspective, not with the customers' needs in mind. Symptoms of Production and Sales Orientations (Continued) 10. Organization or department is seen as an island unto itself. 11. Departments have overlapping activities/responsibilities related to marketing. 12. Department managers tend to be very defensive and protective of their domains. 13. Organization is set up and services offered because owners themselves like them (The Share-the-Wealth Syndrome). Marketing Myopia A term coined in 1960 by Theodore Levitt to describe many of the 13 symptoms of production and sales orientations. Myopia: shortsightedness or lack of discernment in thinking or planning. Characteristics of Marketing Orientation 1. Customer needs are first priority and understanding these needs is a constant concern. 2. Marketing research is an on-going activity assigned a very high priority. 3. Customers' perceptions of the organization are known. 4. Frequent reviews are made of strengths and weaknesses relative to competitors. 5. The value of long-term planning is fully appreciated. Characteristics of Marketing Orientation 6. The scope of business activities is broadly set and change is seen as inevitable. 7. Interdepartmental cooperation is valued and encouraged. 8. Cooperation with complementary organizations is seen as being worthwhile. 9. Measurement and evaluation of marketing activities are done frequently. Benefits of a Marketing Orientation 1. Produces more satisfied customers. 2. All departments, managers, and staff share a common goal. 3. Knowing customers and their needs increases the ability to satisfy these needs. 4. Changes in customer needs and characteristics are identified. 5. Viability of new products and services are determined. 6. Strengths are accentuated and weaknesses addressed. Benefits of a Marketing Orientation (Continued) 7. Changes in customer needs are anticipated and acted upon; marketing opportunities are realized. 8. Services, products, and promotions are designed to match customers' image. 9. Increased cooperation leads to better services and greater customer satisfaction. 10.Increased cooperation with complementary organizations again generates greater customer satisfaction. Benefits of a Marketing Orientation (Continued) 11. Adaptations to change are made smoothly and are not resisted. 12. Opportunities that serve customers more comprehensively, or those that tap into related fields, and capitalized upon. 13. Effective marketing programs are repeated or enhanced; ineffective ones are dropped. 14. Marketing expenditures and human resources are used effectively. Core Principles of Marketing 1. The marketing concept 2. Marketing or customer orientation 3. Satisfying customers' needs and wants 4. Market segmentation 5. Value and the exchange process 6. Product life cycle 7. The marketing mix The Hospitality and Travel Marketing Environment Consists of two parts: 1. Marketing Strategy Factors (controllable) 2. Marketing Environment Factors (uncontrollable) The Hospitality and Travel Marketing Environment Marketing Strategy Factors The Marketing Mix/8 Ps Traditional 4 Ps of Marketing Product Place Promotion Price Additional 4 Ps of Hospitality and Travel Marketing People Packaging Programming Partnership The Hospitality and Travel Marketing Environment Marketing Environment Factors 1. 2. 3. 4. 5. 6. Competition Legislation and regulation Economic environment Technology Societal and cultural environment Organizational objectives and resources Reasons for Increased Importance of Marketing in the Industry 1. Greater competition. 2. Increased market fragmentation and complexity. 3. More experienced and sophisticated customers. 4. Acquisition of hospitality and travel companies by firms in other industries.