Chapter 1

Introduction to hospitality marketing

Lecture plan What is marketing? Definitions Hierarchy of customer value Marketing concept Management orientations Environmental influences

macro micro

Special characteristics of services marketing Hospitality marketing mix

Definitions of marketing

Many different definitions of marketing business philosophy to create and retain

satisfied customers exchange process – short term transactional

marketing relationship marketing – development of

mutually beneficial long-term relationships between suppliers and customers

creating memorable experiences

Figure 1.1 The hierarchy of customer value

The marketing conceptMarketing is:

a business philosophy with the customer at the centre of a hospitality organization’s purpose

an exchange activity between hospitality organizations and their customers

a management process that focuses on planning for the future success of the organization

a set of marketing tools, which marketers use to understand customers’ needs and wants and to develop products, and services to satisfy or delight customers

The central purpose of marketing is to manage demand

Management orientations

Product or service orientation Operations or production orientation Selling orientation Marketing orientation Societal marketing orientation

Figure 1.2 Marketing orientations

Figure 1.3 Macro- and micro-environmental influences on hospitality organizations

Macro-environmental influences

The macro-environment

Political Economic Socio-cultural Technological Environmental

Interaction of PESTE factors

Impact of macro-environment

Hospitality companies have limited control over PESTE influences; but major changes in even one PESTE factor can significantly impact on the business, either for better or worse

PESTE factors are constantly changing

Business cycle Growth: occupancy and room rates increase in

response to growing demand Peak: occupancy and room rates remain

strong, funds still available for investment; growth tends to slow

Decline: occupancy begins to decrease Trough: there is a large imbalance of supply

and demand during a recession; hospitality businesses fail

Resurgence: there is a gradual resurgence, and the cycle starts all over again

Figure 1.4 Typical hotel industry cycle

Micro-environment

Internal company factors customers employees suppliers intermediaries

External factors direct competitors various publics

Micro-environment

Hospitality companies have more influence over the micro-environment than over the macro-environment

Special characteristics of services marketing

Seasonality Intangibility Perishability Inseparability Variability Interdependence Supply Exceeding demand High fixed costs

Hospitality marketing mix

The term marketing mix is used to describe the tools that the marketer uses to influence demand

The marketing mix is a core concept in marketing

The hospitality marketing mix adopted in this text is based on the eight marketing activities:

Figure 1.5 The hospitality marketing mix

Jobs in hospitality marketingPeople who work in marketing work in:

online and offline advertising, sales promotion and publicity

sales, sales promotion, print and publicity, direct mail, advertising

public relations and customer relations marketing research online sales and marketing roles such as guest user

interface (GUI) management, web product development, website sales, search engine optimization

database management, daily web operations and content management

References and further reading Albrecht, K. (1992). The Only Thing That Matters. Harper Business Books. American Marketing Association. (October 2007). http://www.marketingpower.

com/aboutama/pages/definitionofmarketing.aspx. Brown, S. (2001). Marketing: The Retro Revolution. Sage. Carlzon, J. (1987). Moments of Truth. Ballinger Publishing. Chartered Institute of Marketing. (2007). Shape the Agenda: Tomorrow’s Word,

Re-evaluating the Role of Marketing, October 2007. Grönroos, C. (1994). ‘From marketing mix to relationship marketing: towards a

paradigm shift in marketing’. Management Decision, 32, pp. 4–20. http://www.fairmount.com. Kotler, P. (1999). Kotler on Marketing. Simon and Schuster. Kotler, P. (2003). Marketing Management. Prentice Hall. Kotler, P. and Armstrong, G. (2010). Principles of Marketing. Pearson Education. Kotler, P., Bowen, J. and Makens, J. (2009). Marketing for Hospitality and

Tourism (5th ed.). Prentice Hall. Levitt, T. (1960). ‘Marketing myopia’. Harvard Business Review, 38, pp. 45–56. Pine, J. and Gilmore, J. H. (1999). The Experience Economy. Harvard Business

School Press.