Methodical aspects of marketing management in the hotel and restaurant business
Here are discussed marketing management in the hotel and restaurant business.
According to many scholars, marketing has a dual character as on one hand it is directed at thorough
and comprehensive study of the market, demand, consumer behavior, and on the other hand it is to
form a production function [1]. This can be explained by the fact that marketing performs not only
analytical and production but also a management function.
According to Ph.Kotler, “marketing management is a complex process of the influence by the
management subject (management of a company, sales organizations, concerns, monopolies, state
bodies) on the management object which is presented by processes and subjects in the marketing
system [2].”
Marketing management in the hotel and restaurant business is regarded by a Russian researcher A.P.
Durovich not only as a function but also as a methodology. He gives the following definition, “marketing
management is a process which includes planning, implementing and monitoring marketing activities.
This process implies realization of basic management functions studied in the theory of management.”
[3] Basing on this definition, the process of management includes 6 successive stages: analyzing
market potential, defining long-term target market, choosing a marketing strategy, developing and
implementing a marketing complex, and marketing control.
A simpler approach to the system of marketing management is given by a Russian theorist
Yu.Razovski: “the process of marketing management includes:
1. Analysis of market potential
1. collecting information about the market
2. analyzing the situation of the market and demand
3. analyzing your own opportunities
4. formulating an aim, problem, and the main idea – a marketing concept
2. Selection of target markets
1. market segmentation
2. choice of the target segments
3. positioning of the product in the market or within a target segment
4. assessing demand volumes
3. Development of a marketing complex
1. developing a product
2. pricing
3. defining an effective distribution strategy for the product
4. designing an advertising campaign and other methods to stimulate sales
4. Implementation of marketing activities
1. defining the strategy of a company activity
2. planning work
3. monitoring plan realization”. [3]
As it is seen from the above-mentioned definition, there is a different order of marketing operations.
While A.P.Durovich says that the process of defining long-term target markets is followed by choosing
a strategy, Yu.Razumovski considers the choice of a strategy as a final stage.
From the point of view of methodology, the former approach is more convincing as the process
of strategy development is connected with hotels and restaurants positioning and it defines the course
of an organization’s activities.
G.A.Papiryan, a Russian researcher in the sphere of tourism management, considers marketing
management as a process of developing a marketing strategy. In his opinion, “marketing strategy
allows a company in the hospitality industry to withstand various kinds of influence of outside
environment in the long-term. However, it is very difficult to create an absolutely accurate/ precise
procedure of defini8ng a marketing strategy because of different internal characteristics of a company
and variety of outside influences”.
On the basis of this definition one can conclude that unpredictability of outside environment influence is
an essential factor which can result in developing different strategies.
Comparing A.Durov’s and G.A. Papiryan’s definitions it is clear that the former puts market analysis
and choice of segments as primary ones, while the later narrows down the notion of marketing
management to a strategy.
American modern school of marketing management, headed by Peter R.Dickson, gives the following
definition: “marketing management is a various organization’s activity aimed at studying consumers’
needs and psychology. It includes analysis and forecast of competitors’ behavior, development and
promotion of new competitive goods and services, and management of the system of commercial
relations with suppliers and intermediaries. He also implies interaction with clients and satisfying their
needs on a higher level compared to that of competitors”. [5]
Unlike other definitions, this one assigns a significant role to analyzing competition and issues of
competitiveness and also highlights the importance of cooperation with suppliers and intermediaries.
At the same time marketing management, both theoretic and applied, has been changing dramatically,
evolving together with the market. Heightened attention of researchers and theorists to developing new
approaches in the sphere of marketing management has lead to new modern marketing concepts. The
novel concepts require rethinking the ongoing changes and basic operation principles. That is why in
the theoretical aspects there is often a gap between working out new developments in the form of
concepts, theories, methodologies and their adaptation.
The works of T.P.Danko, PhD, professor of Russian Economic Academy named after G.V.Plekhanov,
present the following complex interpretation: “marketing management is a targeted activity of a firm to
monitor its position on the market by planning, organizing, controlling the implementation of every
stage of positional and active behavior, taking into account the influence of regularities of market
development, competitive environment for achieving profitability and efficiency of a subject’s activity on
the market”. [66, p.1]
This definition implies a conceptual approach based on systematization, complexity and
comprehensive coverage of aims.
Today’s trends in market development, its transformation and constant changes are objective
preconditions for improving its managerial impact.
Taking into account the trends in the development of hotel and restaurant services, we can see the
need to provide informational support for marketing activities, develop service sphere, expand the aims
and tasks of marketing, study consumer needs thoroughly, structure markets and create partner
relationship marketing.
Another principal approach is suggested by theorists in the sphere of marketing, T.A.Burtseva,
V.S.Sizov, and O.A.Tsen. According to them, “marketing management is a type of activity aimed at
managing sales and all business processes”. [6]
This definition is based on general theoretical description, without specification and the use of practical
tools for its implementation. That is why the dissertation research work includes two existing
approaches to relationship marketing.
The analysis of foreign and Kazakhstan’s literature has shown that the definitions of marketing
management and marketing operations management are different. According to L.A.Pasechko, PhD in
Economics, “marketing management of commercial operations is a specific type of management
activity which is based on the marketing ideology and synthesis of its managerial concepts and aimed
at the strategic organization development on the market, which is ensured by improvement of
commercial activity and enhancement of its effectiveness, with a strong focus on meeting the needs of
a target market segment”. [7]
The author points out essential differences between the above-mentioned definitions and says that
“marketing management is aimed at defining the needs of a target market segment where the
organization operates and satisfying the needs of target consumers by more efficient ways and means
in comparison with competitors. In contrast, implementation of the marketing activity functions within
the framework of marketing management is a task to be performed by specially created functional
departments”. [7]
In general, basing on these concepts, one can conclude that marketing approach to management is
defined as a general theoretical basis which identifies the sphere of management activity founded on
the marketing ideology.
In contrast to marketing control, marketing management is aimed at forming a set of marketing
strategies of a company, using its resources and potential. The essential distinction of marketing
management from marketing operations management is no specificity in the object of marketing
activity.
In order to form the attitude to the problem under consideration there was conducted a research into
the evolution of the notion “marketing management” in the context of hotel and restaurant business. To
form an effective system of marketing management in the hotel and restaurant business it is necessary
to unite business specificity with the aims of marketing management. Having studied the business
specificity, let us consider the tools which are to be applied in the hotel and restaurant business (Table
1)
Table 1. Algorithm of the tasks of marketing management in the hotel and restaurant business
Tasks of marketing
management
Marketing tools
Target object
1. Analysis of market
potential
SWOT-analysis: the aim and strategies of hotels and
Marketing
restaurants, tasks, structure, personnel, managerial,
environment
productive, financial, and logistics technologies and human
resources management.
PEST- analysis: external environment of direct influence:
suppliers, intermediaries, contact audiences; external
environment of indirect influence: economic, political,
legislative, cultural, demographic, technological, and
geographical media
2. Selection of target
STP- analysis: assessment and forecast of the market,
Market volume
long-term segments and formation of criteria and segmentation features, selection of and capacity,
positioning
segmentation method, interpretation of segment profiles,
market share
selection of target segments; selection of positioning
method, identification of positioning indicators, and
development of positioning programme.
3. Development and
management of
marketing complex
7 «Р».Development of production, price, communication,
Consumer
and sales strategies; formation of effective environment, the segment
process of rendering hotel and restaurant services, and
personnel management
4. Implementation of
marketing activities:
strategic marketing
planning and control
Models of strategic marketing planning: formation of
Target
marketing and corporate positioning strategies of hotels and consumer
restaurants, development of strategic plan, monitoring
implementation of the strategy
The first stage is analysis of market potential which is carried out at two levels: an organization and its
external environment. While assessing the internal environment of a hotel or a restaurant, beside the
above-mentioned aspects, it is reasonable to define resource provision which includes structural,
financial, intellectual and relationship capital. The components of these resources are presented on
figure 1.
[img width="639" height="456" src="file:///C:/TEMP/msohtmlclip1/01/clip_image001.gif"
v:shapes="_x0000_s1026 _x0000_s1027 _x0000_s1028 _x0000_s1029 _x0000_s1030
_x0000_s1031 _x0000_s1032 _x0000_s1033 _x0000_s1034 _x0000_s1035 _x0000_s1036
_x0000_s1037 _x0000_s1038 _x0000_s1039 _x0000_s1040 _x0000_s1041 _x0000_s1042
_x0000_s1043 _x0000_s1044 _x0000_s1045 _x0000_s1046 _x0000_s1047 _x0000_s1048
_x0000_s1049 _x0000_s1050">
Figure 1. Resources underlying business development
Note – author’s systematization of theoretic resources
For the success of hotel and restaurant business marketing resources have a higher value. They
include highly qualified personnel, marketing database, efficient solutions to marketing tasks,
programme and technical support, sustainable relationships with clients and partners, development
and implementation of brand programme and marketing budget.
Reference
1. BagiyevG.L. Marketing/ G.L.Bagiyev, V.M.Tarasevich, H.ann. – М.: Economics, 2001 p. 344
2. KotlerPh. Principles of Marketing/ Ph.Kotler, V.Wong, J.Saunders, G.Armstrong - Kiev: Saint
Petersburg: Williams Publishing House, 1998- p. 564
3. Golubkov Ye.P. Marketing research: theory, methodology, practice. Moscow: Finpress, 2003 – p.568
4. Evans, J.R., Berman, B.R. Marketing. – Moscow: Economics, 1993. – p. 384
5. Churchill, G.A. Marketing research. – Saint Petersburg, 2002. – p.744
6. Durovich A.P., Marketing research in tourism. – Saint Petersburg, 2008. – p.384
7. Pankrukhin A.P. Marketing. – Moscow: Economics, 2003. – p.366