Tourism Marketing and Promotion
Marketing in a Global Economy
• Creating customer value and satisfaction
Marketing in a Global Economy
• Today’s successful companies are strongly customer focused
and heavily committed to marketing.
• Accor has become one of the world’s largest hotel chains by
delivering L’esprit Accor
– the ability to anticipate and meet the needs of their
guests, with genuine attention to detail
• Ritz-Carlton promises & delivers truly “memorable
experiences” for its guests.
• McDonald’s® providing its guests with QSC&V (quality,
service, cleanliness, and value).
Marketing in a Global Economy
• Successful hospitality companies know that if they
take care of their customers, market share & profits
will follow.
Marketing in a Global Economy
• Marketing manager. A person who is involved in
marketing analysis, planning, implementation, and
control activities.
– As a manager, you will be motivating your employees to
create superior value for your customers.
– You will want to make sure that you deliver customer
satisfaction at a profit.
Customer Orientation
Satisfied Customers
• The purpose of a business is to create and maintain satisfied,
profitable customers.
Customer Orientation
Satisfied, Profitable, Repeat Customers
• Without customers, assets
have no value.
– a new multi-million-dollar
restaurant will close
– a $300 million hotel will
go into receivership
Customer Orientation
Satisfied, Profitable, Repeat Customers
• It is wise to assess the customer’s long-term value
and take appropriate actions to ensure a customer’s
long-term support.
– Another study found an increase in customer retention rates
yielded
a
profit
increase
of
25
to
125 percent.
What is Hospitality and Tourism Marketing?
Sales & Marketing
• Sales = Sell What’s in Stock
• Marketing = Align with Customers, Now and for the Future
What is Hospitality and Tourism Marketing?
The Marketing Mix
• Marketing mix. is a business tool used in marketing and by marketers.
• The Four-P framework calls for marketing to decide:
– Product: the product and its characteristics
– Price: set the price
– Place: decide how to distribute the product
– Promotion: choose methods for promoting the product
What is Hospitality and Tourism Marketing?
Products Serving Needs
• If marketers do a good job of identifying consumer needs,
developing a good product, and pricing, distributing, and
promoting it effectively, the result will be
• attractive products and satisfied customers.
Starbucks Coffee has created customer
loyalty, allowing it to open shops around
the world. In this photo, Starbucks
customers sit in an outdoor café in
Singapore. © Jonathan Drake.
What is Hospitality and Tourism Marketing?
Products Serving Needs
Companies such as Sonic have brought
marketing skills to the restaurant industry.
Courtesy of Sonic Corporation and
Subsidiaries.
• Marriott developed its Courtyard concept; Darden designed
the Olive Garden Italian Restaurant.
• Different products, offering new consumer benefits.
– marketing means “hitting the mark.”
What is Hospitality and Tourism Marketing?
Effective Marketing
• Define customer targets and needs
• prepare a value package
Marketing in the Hospitality Industry
Importance of Marketing
• The hospitality industry is one of the world’s major
industries & in the US, the second largest employer.
• Industry is now dominated by chains
Marketing in the Hospitality Industry
Tourism Marketing
• The two main industries comprising the activities we call
tourism are the hospitality and travel industries.
– successful hospitality marketing is highly dependent on
the entire travel industry
Visitors to international destinations, such as these
tourists on the Brazilian side of Iguacu Falls, often
purchase packages that include international airfare,
ground transportation, and hotel accommodations.
Courtesy of Demetrio Carrasco © Dorling Kindersley.
Marketing in the Hospitality Industry
Cooperative Marketing
• The success of cruise lines is a result of coordinated marketing
by many travel industry members.
– airlines, auto rental firms, and passenger railways cooperatively
develop packages with cruise lines
– requires
coordination
in
pricing,
promotion
&
delivery of those packages
Marketing in the Hospitality Industry
Definition of Marketing
• Marketing. The art and science of finding, retaining, and
growing profitable customers.
The Marketing Process
A Five-Step Model
• Here are steps one through four of a simple five-step model of the
marketing process.
– companies
working
to
understand
consumers,
create
customer value & build strong customer relationships
1
Figure 1-1
A simple model
of the marketing
process.
2
5
3
4
The Marketing Process
A Closer Look
•
•
In the fifth, final step, companies reap the rewards of creating superior customer
value.
By creating value for customers, they capture value from customers in the form of
sales, profits & long-term customer equity.
5
Figure 1-1
1. Understanding the Marketplace & Customer Needs
Customer Needs, Wants and Demands
• Human need. A state of felt deprivation in a person.
– Needs
were
not
invented
by
are part of the human makeup
marketers,
but
• Human want. The form that a human need takes when shaped by culture
and individual personality.
– wants are how people communicate their needs
– wants are described in terms of objectives that will
satisfy needs
• Demands - Human wants that are backed by buying power, want or need.
It includes physical objects, services, persons, places, organizations, and
ideas.
The Marketplace & Customer Needs
Customer Value and Satisfaction
• Customer value is the difference between benefits the
customer gains from owning and/or using a product, and the
costs of obtaining the product.
– luxury hotels in Hong Kong such as The Shangri-La do not expect
“executive guests” to stand in line to register
– Domino’s Pizza saves the customer time and provides
convenience by delivering pizza
– limited service hotels provide value to the overnight traveler by
offering a free continental breakfast
The Marketplace & Customer Needs
Customer Value and Satisfaction
•
•
•
One of the biggest management
challenges is to increase their product
value for their target market.
– managers must know their
customers
and
understand what creates value for
them
Customer expectations are based on
past buying experiences, the opinions
of friends, and market information.
Marketers must set the right level of
expectations.
The Marketplace & Customer Needs
Customer Value and Satisfaction
“Wow, that was great!”
you will probably return and tell others about your
discovery
The Marketplace & Customer Needs
Markets
• A market is a set of actual and
potential buyers of a product.
• These buyers share a particular need or
want that can be satisfied through
exchange relationships.
This advertisement for The Point Hilton Resorts communicates the
variety of activities that the resorts offer. These activities will increase
the value of the resort to those customers who perceive them as
benefits. Courtesy of The Pointe Hilton Resorts, Phoenix, Arizona.
2. Designing Customer-Driven Marketing Strategy
Selecting Customers to Serve
• Marketing management. The art and science of choosing
target markets and building profitable relationships with them.
• To design a winning marketing strategy two important
questions require answers:
– What customers will we serve?
(what is our target market)?
– How can we serve these customers
best?
(what’s our value proposition)?
Designing Customer-Driven Marketing Strategy
Choosing a Value Proposition
• A company’s value proposition is the set of benefits or values
it promises to deliver to consumers to satisfy their needs.
– such propositions differentiate one brand from another
• must design strong value propositions
Designing Customer-Driven Marketing Strategy
Marketing Management Orientation
• There are five alternative
concepts
under
which
organizations design and
carry out their marketing
strategies:
1.
2.
3.
4.
5.
Production Concept
Product Concept
Selling Concept
Marketing Concept
Societal Marketing Concepts
Designing Customer-Driven Marketing Strategy
The Production Concept
• Production concept - Holds that customers will favor products that are
available and highly affordable, and therefore management should focus on
production and distribution efficiency.
• Management may become so focused on production systems they forget
the customer.
Designing Customer-Driven Marketing Strategy
The Product Concept
• The product concept, like the production concept, has an
inward focus.
•
Product concept - The idea that consumers will favor
products that offer the most quality, performance, and
features, and therefore the organization should devote
its energy to making continuous product improvements.
•
This concept holds that consumers will favor products
which offer the most in quality, performance, and
innovative features.
One way that Olive Garden Italian Restaurants differentiates
itself is by freshly grating cheese for the guest. Courtesy of Jeff
Greenberg/Alamy Images.
Designing Customer-Driven Marketing Strategy
The Selling Concept
• Selling concept - The idea that consumers will not buy enough of an
organization’s products unless the organization undertakes a large selling
and promotion effort.
• The aim is to get every possible sale, not worry about satisfaction or the
revenue contribution of the sale.
Designing Customer-Driven Marketing Strategy
The Societal Marketing Concept
•
•
Societal marketing concept - The idea that an organization should determine the
needs, wants, and interests of target markets and deliver the desired satisfactions
more effectively and efficiently than competitors in a way that maintains or
improves the consumer’s and society’s well-being.
The newest concept, societal marketing, holds that the organization should…
– determine the needs, wants & interests of target markets
– deliver desired satisfactions more effectively and efficiently than competitors
– in a way that maintains or improves the consumer’s and society’s well-being
Designing Customer-Driven Marketing Strategy
The Societal Marketing Concept
• Societal pressures are already manifested
marketing of cigarettes, liquor & fast-food.
– hotels & restaurants have no-smoking sections
– restaurants can face liability for serving excessive alcohol
– fast-food pursues environmentally sound packaging
in
the
4. Building Profitable Customer Relationships
Value-Building Tools - Financial Benefits
•
•
•
The first relies primarily on adding financial benefits to the customer relationship.
– airlines offer frequent-flyer programs
– hotels give room upgrades to their frequent guests
– restaurants have frequent-diner programs
The second approach is to add social as well as financial benefits, turning
customers into clients.
– company personnel work to learn individual customers’ needs and wants
– products and services are individualized & personalized
The third approach is to add structural ties to the financial and social benefits.
– airlines developed reservation systems for travel agents and lounges & limo
service for their first-class customers
– Sheraton developed flexible check-in and checkout times
– Hilton provides a personalized welcome message on the guest’s television
Building Profitable Customer Relationships
Selective Customer Relationships
• A company should develop relationships selectively,
determining which customers are worth cultivating.
– because you meet their needs more effectively than others
Table 1-1 Types of customers.
– customers who are high on profitability and frequency deserve
management attention.
– those high on profitability but low on frequency can sometimes be
developed in higher frequency customers
Building Profitable Customer Relationships
Selective Customer Relationships
• Relationship marketing - Involves creating, maintaining, and enhancing
strong relationships with customers and other stakeholders.
• Guests who are in the low-frequency, low-profitability quadrant are often
bargain hunters.
– they come when there is a promotion and avoid paying
full price at all costs
• It is very difficult to build a relationship with these price-sensitive
customers.
Customer Relationship Management
Selective Customer Relationships
• Customer relationship management (CRM) - involves
managing detailed information about individual customers and
carefully managing customer “touch points” in order to
maximize customer loyalty.
• Customer touch point - is any occasion on which a customer encounters
the brand and product—from actual experience to personal or mass
communications to casual observation.
– for a hotel this includes reservations, check-in & out, frequent-stay programs,
room service, business services, amenities, restaurants, and bars.
Capturing Value from Customers
Customer Loyalty and Retention
• Lifetime value. The lifetime value of a customer is the
stream of profits a customer will create over the life of his
or her relationship to a business.
– average life is determined through surveys or guest history
• It measures how much a member of a market segment
produces
per
year,
multiplied
by
the
average life of a member of that segment.
– Ritz-Carlton knows the life-time value of its loyal customer is over
$100,000 over their lifetime.
– a restaurant customer can be worth several thousand dollars’ worth of
business
– a travel agency customer can generate over $50,000
during his/her lifetime by using the agency
Capturing Value from Customers
Building Customer Equity
• Customer equity - is the discounted lifetime values of all the
company’s current and potential customers.
• In layman terms, the more loyal a customer, the more is the
customer equity.
– Firms like McDonalds, Apple and Facebook have very high customer
equity and that is why they have an amazing and sustainable
competitive advantage.
• The best approach to customer retention is to deliver products
that create high satisfaction and perceived value, resulting in
strong customer loyalty.
– the more loyal the firm’s
higher the firm’s customer equity
profitable
customers,
the
Capturing Value from Customers
Marketing’s Future
• The Internet
travel products
has
changed
the
way
we
distribute
– a technology executive stated, “The pace of change is
so rapid that the ability to change has now become a competitive
advantage.”
– management
thought
leader
Peter
Drucker
observed,
“…a company’s winning formula for the last decade
will probably be its undoing in the next decade.”
Capturing Value from Customers
Marketing’s Future
• The importance of Customer relationship management (CRM)
has created the need for those who understand database
marketing and the hospitality industry.
• The worldwide growth of the travel industry has created a
shortage of managers.
– in some regions projects are put on
the developer cannot acquire a management staff
hold
because
• Marketing, with its customer orientation has become the job of
everyone, and…
Your passport
to success!
KEY TERMS
• Customer equity - is the discounted lifetime values
of all the company’s current and potential customers.
• Customer expectations - are based on past buying
experiences, the opinions of friends, and market
information.
• Customer relationship management (CRM) involves managing detailed information about
individual customers and carefully managing
customer “touch points” in order to maximize
customer loyalty.
KEY TERMS
• Customer touch point - is any occasion on which a customer
encounters the brand and product—from actual experience to
personal or mass communications to casual observation.
• Customer value - the difference between benefits that the
customer gains from owning and/or using a product and the
costs of obtaining the product.
• Demands - Human wants that are backed by buying power,
want or need. It includes physical objects, services, persons,
places, organizations, and ideas.
KEY TERMS
• Exchange. The act of obtaining a desired object from someone
by offering something in return.
• Hospitality industry. Made up of those businesses that offer
one or more of the following: accommodation, prepared food
and beverage service, and/or entertainment.
• Human need. A state of felt deprivation in a person.
• Human want. The form that a human need takes when shaped
by culture and individual personality.
KEY TERMS
• Lifetime value. The lifetime value of a customer is
the stream of profits a customer will create over the
life of his orher relationship to a business.
• Market. A set of actual and potential buyers of
a product.
• Marketing. The art and science of finding, retaining,
and growing profitable customers.
KEY TERMS
• 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 satisfactions more effectively and efficiently
than competitors.
• Marketing management. The art and science of choosing
target markets and building profitable relationships with them.
• Marketing manager. A person who is involved in marketing
analysis, planning, implementation, and control activities.
KEY TERMS
• Marketing mix. Elements include product, price,
promotion and distribution. Sometimes distribution is
called place and the marketing situation facing a
company.
• Product. Anything that can be offered to a market for
attention, acquisition, use, or consumption that might
satisfy a need. It includes physical objects, services,
persons, places, organizations, and ideas.
KEY TERMS
• Product concept - The idea that consumers will favor
products that offer the most quality, performance, and features,
and therefore the organization should devote its energy to
making continuous product improvements.
• Production concept - Holds that customers will favor
products that are available and highly affordable, and therefore
management should focus on production and distribution
efficiency.
• Purpose of a business - To create and maintain satisfied,
profitable customers.
KEY TERMS
• Relationship marketing - Involves creating,
maintaining, and enhancing strong relationships with
customers and other stakeholders.
• Selling concept - The idea that consumers will not
buy enough of an organization’s products unless the
organization undertakes a large selling and promotion
effort.
KEY TERMS
• Societal marketing concept - The idea that an organization
should determine the needs, wants, and interests of target
markets and deliver the desired satisfactions more effectively
and efficiently than competitors in a way that maintains or
improves
the consumer’s and society’s well-being.
• Transaction - Consists of a trade of values between two
parties; marketing’s unit of measurement.
• Value proposition - The full positioning of brand—the full
mix of benefits upon which it is positioned.
Thank You