The documents discuss several key marketing concepts for hospitality businesses. The Marketing Concept suggests focusing all efforts on identifying and satisfying customer needs. The Strategic Marketing Concept adds that businesses must sustain a competitive advantage. The Societal Marketing Concept states that businesses should consider the impact on society. Marketing myopia can occur when businesses define themselves too narrowly around specific goods and services rather than customer needs. The service-profit chain model suggests that treating employees well leads to improved customer satisfaction and loyalty, and ultimately better financial performance.

1. Transcript: The Marketing Process Continuum
Mission statement
The mission statement should answer the following questions
about the business:
· Who am I?
· Type of hotel—product focus and need
· Quality level—luxury, first-class, budget
· Business mix
· What are the key market segments I serve?
· What makes me unique?
· Salience, determinance, and importance
· Who are the key competitors whose success directly affects
my business?
· Who are my constituents—formal and informal groups
(employees, unions, suppliers, regulators/inspectors, and so
on)—whose efforts on my behalf may contribute to success?
· How will I improve over the next 3-5 years?
The answers to these questions help organizations define their
target markets and their business mix.
Strategy
Strategy involves matching opportunities with corporate
capability. The strategic window of opportunity is a limited
period during which the combination of an opportunity and the
firm's ability to exploit it exists.
Breakthrough Opportunities are opportunities that help
innovators develop hard-to-copy marketing strategies that will
be very profitable for a long time. There must be a match or
"fit" between the target market opportunity and the company's
resources.
Competitive Advantage means that a firm has a marketing mix
which the target market sees as better than a competitor's mix.
The goal of strategic planning is to gain a sustainable
competitive advantage.
An organization with a production orientation would focus on

2. achieving a competitive advantage by increasing production
efficiencies to develop a production cost advantage. A company
with a sales orientation would develop a competitive advantage
by having a more persuasive sales message. A firm with a
marketing orientation would achieve a competitive advantage by
satisfying consumers' needs.
Unless the company has some overriding competitive advantage,
the target market selected should be served by only a few, small
competitors.
Analysis
There are two schools of thoughts regarding what happens after
an opportunity is identified. The traditional belief is that
marketers must conduct an environmental analysis to analyze
the sociocultural, demographic, economic, technological,
political and legal, competitive, and ecological environments.
Marketers use the data they've gathered in an environmental
analysis to conduct a SWOT analysis, identifying the strengths,
weaknesses, opportunities, and threats associated with their
enterprise. In concert with the identification of organizational
resources, this enables organizations to define marketing
objectives and a unique competitive advantage.
The opposing, and more nascent view, known as the Effectual
Approach, is that analogical reasoning based on experience
should be used to make marketing decisions, whereas predictive
information should be ignored or given little weight. The goal is
to control outcomes, co-create value through partnerships, and
transform situations to achieve desired results.
Read, Stuart, Nicholas Dew, Saras D. Sarasvathy, Michael
Song, and Robert Wiltbank (2009), "Marketing Under
Uncertainty: The Logic of an Effectual Approach," Journal of
Marketing, 73 (3), 1-18.
Tactics
Under the traditional approach, organizations develop product,
place, price, and product strategies for each target market based
on resource and capability constraints; develop actionable
tactics to implement strategy; and identify all resources needed

3. for implementation.
As part of this stage, they also create a set of tools such as
budget and pro-forma income statements for the next five years.
These are used to perform a business analysis to ensure the
direction the firm is taking will be a profitable one, to
determine the actual cost of the business tactics, and to identify
how much income the firm expects to generate. In addition,
accountability controls and methods of evaluation are developed
to assist with the review process that will follow at a later time.
Contingency plans are also created so that organizations are
prepared to respond rapidly to minor changes in their situations.
Following the effectual approach, the belief is that markets and
products can be broadly transformed when moving along the
path from concept to acceptance. Thus, alternative markets are
more likely to be considered, pricing is likely to follow a
skimming strategy, and channel strategies are more likely to
focus on partnerships serving a narrow customer segment.
Succinctly, the effectual approach is focused on relationships,
networking, equity, co-creation, humans, and operant resources.
Review
During this phase, marketers re-examine strategies to ensure
their continued fit with the organization's defined objectives as
well as the prevailing environmental constraints. Further, they
review and evaluate the effectiveness of their tactics based on
the accountability controls, methods of evaluation, and
contingency plans they established earlier.
Strategy
On the basis of their review, it may be necessary to revise
strategies and even, in the most extreme circumstances, the
mission statement. Such revisions lead to consequent revisions
in tactical implementations, which are followed by another
review cycle, another round of revisions, another review cycle,
another round of revisions, and so on.

4. Transcript: Service Characteristics of Hospitality and Tourism
Marketing
Service
At first glance, defining service as a product is not an easy task,
because service is not a physical item that can be picked up and
examined. But customers paying money for your organization's
services, come to conclusions regarding the value of those
services. That is, they decide whether the service received has
been worth its cost.
Christian Grönroos (a pioneer of modern service marketing)
defines service as an intangible activity that takes place
between the guest and a service organization's service
employees, physical resources, or systems—or some
combination of those.
Characteristics of Services
Most products have components of both goods and services
inherent to their purchase. This can be as simple as a mailing
address to return a defective product, or a huge facility
equipped to respond to varying needs, such as an auto
dealership with an attached service department. Most services
are performed in the context of a tangible good, and most goods
are combined with some element of a service. In the restaurant
business, for example, the product is a combination of the food
(the "goods") and everything associated with the way it is
served (the service).
The relationship between goods and services can be illustrated
by the Goods-Services Continuum. Most hospitality purchases
fall to the right of this spectrum.
Characteristics of Services
In the hospitality industry, the key features of services include
intangibility, inseparability, perishability, and the difficulty of
standardization. Understanding each of these elements can help
you define your tasks as a manager to improve the production
and delivery of services.
Intangibility
The intangibility of service makes it difficult for hospitality

5. organizations to differentiate themselves from the competition,
and it makes it difficult for consumers to compare the quality of
different services prior to consumption. When it comes to
purchasing service, consumers simply do not have as much
information to go on before they spend their money. That means
it's riskier for consumers to try a new service or a new service
provider than it is to try a new good. At the same time, the risk
associated with trying new services means that, given a positive
experience, customers are more likely to purchase the same
service again.
Managers in the hospitality industry try to minimize the risk
associated with first-time service purchases by making the
nature of those services as tangible as possible, so that
customers know what they're buying before they spend their
money. Some of the strategies they use include:
· Requiring employees to wear uniforms
· Employing the same logo, building design, and façade on all
buildings
· Making certain features (such as lobbies) visible,
recognizable, and attractive
· Creating outward identifying signs and signifiers at every
opportunity
Inseparability
Inseparability means that the production and consumption of
services are tied together and often occur simultaneously. In the
hospitality setting this often involves interactions between guest
and clerk or guest and waiter; in such cases, there are usually
several well-defined points of contact. These moments of
personal contact between employees and guests are very
important in the effectiveness of the service delivered. The
interaction between the employee and the guest is part of the
total product. Proper training and proper attention to detail are
essential to ensure a successful interaction between guest and
employee.
Perishability
When it comes to most tangible goods, items not sold today will

6. keep their value and can be sold tomorrow. But certain goods
are perishable--fruit, for example, ripens and has retail value
for a limited window of time. The service-related efforts of your
staff are similar in that they cannot be stored or saved. To
manage a facility and staff profitably and ensure customer
satisfaction, managers in the hospitality industry must be aware
of such perishability and manage their capacity accordingly.
The value of a room carried vacant tonight can never be realized
in a future time period. To guard against this, hotels (and often
airlines) frequently overbook their facility. If this is a regular
business practice within your firm, then it's important to
develop a process for finding alternate accommodations when
guests walk in and discover their rooms have been given away.
Difficulty of Standardization
It is difficult to ensure consistent quality in the service
industries because of the human element involved in the service
production. Highly standardized behavior is almost impossible
and not always desirable. Still, employees must be managed so
that they provide a level of service that meets customer
expectations and is commensurate with the corporate image.
There are a wide variety of tactics used by the hospitality and
tourism industry to manage the difficulty of standardization
including:
· Increasing automation of tasks (electronic check in/out)
· Training employees to make good decisions
· Empowering employees to make those decisions
Nonetheless, one of the more frustrating aspects of the service
industry is that regardless of the employees' best efforts, ill-
natured guests will probably not have a good experience.
Transcript: Marketing Concepts
Definition of Marketing
The American Marketing Association defines marketing as the
activity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offerings that have

7. value for customers, clients, partners, and society at large.
This new definition positions marketing as an activity instead of
a function. It identifies marketing as a broader activity in a
company or organization, and not just a department. The new
definition also recognizes that marketing provides long-term
value as well as the short-term benefit of exchange of money for
the shareholder and the organization.
Concept of Exchange
The essence of marketing is an exchange between two parties,
meaning one party is willing to give up something (often
money) in exchange for something he or she would rather have.
Exchange occurs when one social unit (person or organization)
exchanges something of value with another social unit.
Conditions for Exchange
Six conditions must exist for an exchange to be able to occur:
· First, two or more social units must be involved.
· Second, the parties must be involved voluntarily—that is, each
party must be free to accept or reject the other's offer.
· Third, each must have needs that must be satisfied.
· Fourth, each party must have something of value to exchange.
· Fifth, the parties must believe that they will benefit from the
exchange.
· And finally, the parties must be able to communicate with
each other, and deliver the goods or services to be exchanged.
The Marketing Concept
The Marketing Concept is a philosophy that guides the firm in
how it conducts its business. The Marketing Concept suggests
that an organization should aim all its efforts at identifying and
satisfying consumer needs.
The Marketing Concept is based on three fundamental beliefs:
· First, all planning and operations should be customer-oriented.
· Second, all marketing activities in an organization should be
coordinated.
· And third, customer orientation and coordination of activities
are essential to achieve the organization's performance
objectives.

8. Strategic Marketing Concept
However, some observers have said that the focus of the
Marketing Concept was too narrow, because it failed to account
for the larger business and social environment. Consequently,
there have been efforts to extend the Marketing Concept to
create a philosophy more attuned to the realities of today's
business environment.
One such extension is the Strategic Marketing Concept.
Noting that the Marketing Concept does not adequately consider
a firm's competition, the Strategic Marketing Concept suggests
that a firm must satisfy customer needs while sustaining a
competitive advantage to ensure long-term profitability. That is,
a firm must have dual goals: satisfying customers and
outperforming the competition on one or more key factors.
For example, Tune Hotels is a rapidly growing lodging chain
designed to provide real value to the large population at the
base of the population pyramid. Tune Hotels' business model
embraces many of the efficient operating characteristics
pioneered by low-cost carrier airlines such as Southwest
Airlines, RyanAir, and Air Asia.
For Tune Hotels, this includes:
1. Internet distribution direct to customers,
2. Aggressive use of price to stimulate demand and maintain
high occupancies,
3. "Opt-in/opt-out" amenities,
4. High operating efficiencies, and
5. A simple and consistent operating model that gives the
customer a significant value proposition.
Using ten tiers of room rates, Tune can offer incredible value
for guests willing to book months in advance; this represents a
creative marketing opportunity for developing markets that have
rapidly growing, large populations with limited disposable
incomes. Guests can access a quality, compact, clean guest
room for less than US$5.00 per night, including all fees, and
pay only for the amenities they require. Prices are kept low
because incremental revenue is generated in every way possible,

9. including the selling of advertising space throughout the hotel's
physical structure.
Societal Marketing Concept
Another extension of the Marketing Concept is the Societal
Marketing Concept, which addresses the criticism that although
the Marketing Concept may lead to business success, it may
encourage actions that conflict with a firm's responsibility to
society. Thus, the Societal Marketing Concept evolved to
resolve what is known as "the micro-macro dilemma." That is,
what is good for some producers and consumers may not be
good for society as a whole.
The Societal Marketing Concept recognizes that the market
includes not only buyers of the firm's products, but also other
people affected by the firm's operations. It also means the firm
takes a long-term view of customer satisfaction.
For example, in one region of Cambodia, every tour bus
company stops at a particular wat (a Cambodian temple) starting
at 4:00 in the evening for the express purpose of letting tourists
view the sunset from the top of the hill where the wat is located.
Although including this scenic view increases the satisfaction of
the tour bus companies' customers, the vast number of tourists
clambering around the hill are destroying the ancient wat, so
future generations will be unable to enjoy it. If the tour
companies were practicing the Societal Marketing Concept, they
would identify another venue that would provide equal customer
satisfaction and would also protect the wat from destruction,
especially since the customers are there to view the sunset, not
the wat.
Firms that practice corporate social responsibility are utilizing
the philosophy of the Societal Marketing Concept.
Applying Marketing Concepts
So which of these marketing concepts is the most appropriate
for your organization?
In their 2008 article on the relative merits of the different
marketing concepts, Ward and Lewandowska indicate that in
volatile, uncertain business environments, following the simpler

10. Marketing Concept strategy of customer orientation seems to be
most effective. In stable business environments, it is better to
use the Societal Marketing Concept and competitive-based
Strategic Marketing Concept.
All strategies come with caveats and marketing is no different.
In very rare conditions, utilizing any form of marketing may
waste resources. These limited conditions include:
· When the customers are satiated to the point they will not
make any further purchases
· When a product that customers want will not be made
available
· When the cost of gathering the information about customer
needs exceeds the revenue it will generate
· When the firm is restricted in what it can exchange
Marketing Myopia
The Marketing Concept suggests that an organization should
aim all its efforts at identifying and satisfying consumer needs.
Businesses that define themselves in terms of goods and
services rather than consumer needs often find themselves
engaging in narrow, short-term thinking, which is sometimes
called "marketing myopia."
The term "marketing myopia" was coined by Ted Levitt in a
1975 essay published in the Harvard Business Review. When an
organization suffers from marketing myopia, it defines its
business strategy too narrowly, to the point where it cannot
adapt to evolving consumer needs.
Service-Profit Chain
Another critical concept in the hospitality industry is the
service-profit chain.
The concept of the service-profit chain was originally
introduced by Heskett and others in an essay published in
theHarvard Business Review in March-April 1994. It has been
widely embraced by the hospitality industry because the model
contends that if the organization treats employees well,

11. employees will be more satisfied and have greater loyalty and
productivity. In turn, increased employee productivity will
increase focus on providing an excellent customer experience,
and increase customer value and satisfaction. Because satisfied
customers are more loyal to the brand and more willing to shop
with the firm, the internal service focus leads to improved firm
financial performance.
Extended Service-Profit Chain Model
Most recently, in the March 2009 issue of Journal of Marketing,
Christian Homburg, Jan Wieseke, and Wayne D. Hoyer
published research that demonstrated that customer satisfaction
resulted more from employee-company identification than from
employee satisfaction. In this complementary model, employee-
company identification leads through improved customer focus
to customer-company identification. This directly influences
customer loyalty and customer willingness to pay. As in the
traditional service-profit chain, these factors lead to improved
financial performance.
These two complementary models make up the extended
service-profit chain.
Transcript: Marketing Mix: The Four Ps of Marketing
Product
Product means identifying and developing the goods and
services that consumers want or need. Often this involves in-
depth market research.
Place
Place is offering products in a location so that they are
convenient to the guest. For example, the number one hotel
attribute for which a customer selects a particular hotel over
that of a competitor is the convenience of the hotel's location.
Price
Setting the price is an essential step of the process. A price
must serve many functions. It must yield a profit, it must
provide value to the guest, and it has to take into account the
price of competing goods and services.

12. Promotion
Promotion involves letting guests know about the product
through advertising, personal selling, and other forms of
marketing communications.