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marketing for hospitality tourism and airlines

  1. 1. Marketing for hospitality and tourism
  2. 2. Tourism in India  Tourism is the largest service industry in India, with a contribution of 6.23% to the national GDP and 8.78% of the total employment in India.  India witnesses more than 5 million annual foreign tourist arrivals and 562 million domestic tourism visits.  The tourism industry in India generated about US$100 billion in 2008 and that is expected to increase to US$275.5 billion by 2018 at a 9.4% annual growth rate.
  3. 3. Marketing in tourism and hospitality  As the production and consumption experiences are inseparable, it is impossible to sample a tourism service before purchase.  Marketing of tourism is based on  Trust  Relationship  Delivering value
  4. 4. “Marketing is so basic that it cannot be considered a separate function. It is the whole of business seen from the point of view of its final result, that is, from the customers point of view…Business success is not determined by the producer, but by the customer.” -Peter Drucker
  5. 5. What is Marketing  Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others
  6. 6. Hospitality marketing  Marketing is the process for getting a company's product or service out to consumers. Hospitality marketing is how segments of the hospitality industry, such as hotels, restaurants, resorts, amusement parks and other entertainment and accommodations businesses promote their products or services.
  7. 7. Career Information Hospitality marketing professionals can work in a variety of entertainment, accommodations and food service companies. Some companies may train entry- level workers, but others may require experience in sales, customer relations, marketing and management. Job titles may include: •Advertising manager •Promotions manager •Public relations worker •Market researcher •Brand manager
  8. 8. Tourism marketing  Tourism marketing is the application of marketing concepts in the travel and tourism industry. Tourism marketing could be complex due to the product being an amalgam of many different industries such as accommodation and transportation. The markets also vary widely, and determining the consumers´ preferences could be difficult. Definition  Tourism marketing refers to the organized, combined efforts of the national tourist bodies and/or the businesses in the tourism sector of an international, national or local area to achieve growth in tourism by maximizing the satisfaction of tourists. In doing so, the tourist bodies and businesses expect to receive profits.
  9. 9. Markets 11 A market is a set of actual and potential buyers who might transact with a seller.
  10. 10. Marketing Management Philosophies 12 Production Concept Product Concept Selling Concept Marketing Concept Societal Marketing Concept •Consumers favor products that are available and highly affordable. •Improve production and distribution. •Consumers favor products that offer the most quality, performance, and innovative features. •Consumers will buy products only if the company promotes/ sells these products. •Focuses on needs/ wants of target markets & delivering satisfaction better than competitors. •Focuses on needs/ wants of target markets & delivering superior value.
  11. 11. Manufacturing Concept • Consumers favor available and highly affordable products • Management should improve production and distribution systems • However, don’t forget the customer!
  12. 12. Product Concept • Consumers prefer existing products and product forms • Management’s job is to develop good versions of these products • Inward focused like the Manufacturing Concept, so don’t forget your customers!
  13. 13. Selling Concept • Consumers will not buy enough products unless the company undertakes large selling and promotion efforts • Aim is to maximize sales without worrying about customer satisfaction • Fails to establish a long-term relationship with customers
  14. 14. Market Concept • Achieving organizational goals depends on determining the needs and wants of target markets and delivering desired satisfaction better than competitors • Creates long term customer relationships • Frequently confused with “Selling Concept”
  15. 15. Marketing and Sales Concepts Contrasted
  16. 16. Societal Marketing Concept  Organization should determine the needs, wants, and interests of target markets and deliver the desired satisfaction more effectively and efficiently than competitors in a way that maintains or improves the consumer’s and society’s well-being
  17. 17. Importance of Marketing • Corporate giants have increased marketing importance for entire industry • Predicted hotel consolidation into 5 or 6 chains will create intense competition • Growing competitive pressures increasing importance of the Marketing Director
  18. 18. The Future of Marketing • Rapid changes make yesterday’s techniques out-of- date • All company departments are becoming involved in satisfying customers • A focus on internal as well as external marketing
  19. 19. Best Practices • Four Seasons and putting customers first • Singapore Airlines and its top ranked product • Dubai – ridding itself of its reputation of being the “smuggling capital of the Arab world” • Hong Kong and the “world’s best airport” • Ritz Carlton delivering “memorable experiences” • McDonald’s QSC&V principle
  20. 20. 22
  21. 21. The tourism marketing mix Tourism service Intangible variable Inseparable product place Physical evidence processpeople promotion price
  22. 22. 24 Intangibility Inseparability Variability Perishability Can’t be seen, tasted, felt, heard, or smelled before purchase. Can’t be separated from service providers. Quality depends on who provides them and when, where and how. Can’t be stored for later sale or use. Characteristics of Services
  23. 23. Intangibility  High risk associated with services. It is difficult to evaluate service before the experience. Furthermore, lack of tangibility after the experience  Tangibilizing the intangible  Create strong organization image  Engage in post-purchase communication  Stimulate “Word of Mouth” & Publicity 26
  24. 24. Tourism and hospitality as a service Intangibility  Service oriented industries like travel and tourism, strive towards converting the intangible product into an experience that customer will value and cherish. Variability  Offering the same quality of service each time a customer interacts with the service marketing brand( which helps in image building).
  25. 25. Perishability Lack of ability to inventory Capacity and demand management  Managing demand  Understanding demand patterns  Price, Shift demand  Reservation, Overbooking  Create promotional events  Managing capacity  Cross-train employees  Schedule downtime during periods of low capacity 28
  26. 26. Tourism as a service Inseparability  Tourism is a service in the true sense, because of its unique features.  Prospective customers have to travel to the destination to experience the place; and a trail or sampling or test drive is not possible before purchase.
  27. 27. Inseparability The customer becomes part of the service  Service encounter, Moment of truth  Managing employees  Communication training  Empowerment  Managing customers  What do you expect customers to do?  Interaction with other customers 30
  28. 28. Variability Lack of consistency  Managing consistency  Standardized procedure: industrialize service and cutting interaction  Customized: taking care of individual  Educate customers  Train contact and non-contact employees  Manage suppliers’ quality 31
  29. 29. Management Strategies for Service Business  Positioning strongly in the chosen target markets  Effective interaction between customers and employees  Managing differentiation  Managing service quality  Tangibilizing the product 32
  30. 30. Management Strategies for Service Business  Tangibilizing the product  Managing the physical surroundings  Managing employees  Managing perceived risk  Managing capacity and demand  Managing consistency 33
  32. 32. MARKETING MIX “MARKETING MIX’ is a general phrase used to describe the different kinds of choices Organisations have to make In the whole process of bringing a product or services to market.”
  33. 33. The Ten “P’s” of Tourism Marketing* Marketing is “to design a product/service combination that provides real value to targeted customers, motivates purchase, and fulfills genuine customer needs.”
  34. 34. Ten “P’s”  Product  Place  Price  Promotion  Partnership  Packaging  Programming  Positioning  People  Planning
  36. 36. PRODUCT •Design. •Quality. •Range. •Brand Name. •Features. PLACE •Distribution Channels. •Methods of Distribution. •Coverage. •Location. PRICE •List Price. •Discounts. •Commissions. •Surcharges. •Extras. PROMOTION •Advertising. •Sales Promotion. •Salesmanship. •Publicity. 4P’s OF MARKETING MIX
  39. 39. 1. Product 􀁨 The tourism product differs from other products due to the wide range it covers, including such areas as accommodations, transportation, food, recreation and attractions. Often the product includes intangibles such as history, culture and natural beauty. Many times the hospitality or tourism product is viewed as a “service” in the customer’s eyes. The closer we can determine how to satisfy the customer’s needs, the more successful the destination will be.
  40. 40. Product and Place  Travel companies design tour packages covering a wide range of tourist attractions at different prices to attract diverse target segments
  41. 41. Giving a Feel For The “Product” Inside a Service Wrapper . •Consumers are demanding not products, or features of products but the benefits they will be offered. •The airline product includes of two types of services: 1. On the Ground Services. 2. In-Flight Services. PRODUCT MIX Airlines service products  CABIN SERVICE.  CATERING SERVICE  RAMP SERVICE.  OTHER SERVICE.
  43. 43. 2. Price: This refers to the amount customers pay for the product or service provided. A quality tourism experience at a fair price is what the customer is looking for in most cases . Pricing should be based upon clear-cut goals and objectives: survival, profit maximization, market share, competition or positioning
  44. 44. PRICE MIX Premium Pricing Value For Money Pricing Cheap Value Pricing APEX Fares Low-Cost Pricing
  46. 46. .3. Place: The place where the customer buys the tourism product can vary greatly. Travel agents, tour operators and tour wholesalers are a few examples of the distribution points for tourism products. Look for new distribution points in which you can sell your services. For example: web sites like Country-
  47. 47. Place  The world has become a global village.  In recent times the concept of place has transformed tremendously as bookings can be made from anywhere online.
  48. 48.  Online 24-hour reservation Systems.  Consolidation.  Tour Operator/ Travel Agent.  Affiliated with companies. PLACE MIX
  50. 50. 4. Promotion A range of activities can be used to convince customers to buy the product, including information kits, web sites, advertising, personal selling, sales promotion, travel shows, and public relations. Utilize tourist information centers, such as welcome centers. Participation with your state, regional and local tourism offices and associations.
  51. 51. Promotion Incredible India campaign  Advertisements in BAFTA, Grammy, Oscars and major European channels. Major components of promotion  Advertising  Public relations  Publicity  Word of mouth
  52. 52. PROMOTION MIX Advertising Publicity Sales promotion Word of mouth Airlines Advertisement Needs to Keep in Mind the Image of Country, The Scenic Beauty, Tourist Attractions, Rich Cultural Heritages or Which Would Attract Number of Tourists.
  53. 53. People  People in the travel and tourism industry like travel agents, tourist guides, hotel and restaurant staff, transport personnel play an important role in brand building and customer satisfaction.
  54. 54.  Competence.  Reliability.  caring Attitude.  Responsiveness.  Initiative.  Problem Solving Ability.  Goodwill. PEOPLE MIX
  55. 55. Process  Detailed and well documented procedures for addressing every situation and service context supported by infrastructure and IT systems provide consistent and good quality service.
  56. 56.  Reservation.  Flight Information.  Facilities at The Airport.  Baggage Handling.  Meal Service.  Flight Entertainment.  Deliver Quality Service. PROCESS MIX
  57. 57. Physical Evidence  Good customer experience is extremely important for generating repeat business and also business from new customer trough positive word-of-mouth.
  58. 58.  On the ground:  Booking offices or ticket counters.  Paperwork.  Brand Logo.  Tickets. PHYSICAL EVIDENCE In-flight: •Aircraft. •Seating Configuration. •Good Inner-exteriors. •Cleanliness. •Uniforms. •Ambience. •Baggage. •Labels or Tag.
  59. 59. Scope of marketing in tourism Lot of tourism places are not discovered by tourism companies, if marketed will add to the revenue.
  60. 60. Case Study: SOTC, India's leading outbound tour operator SITA ONLINE TOURISM CORPORATION.. .  A pioneer and market leader in outbound group travel, this division markets and operates foreign holiday packages under the SOTC World Famous Tours brand in India and in the big NRI markets of the Middle East, USA and UK. It is also active in the Incentive Tours and the Trade Fair Tours segments. SOTC operates from 26 branches with over 400 employees in India
  65. 65. PROMOTION
  66. 66. Marketing Mix Kingfisher Airlines
  67. 67.  1. Product  Kingfisher First (International & domestic routes) Kingfisher Class (International & domestic routes) Kingfisher Red – formerly known as Air Deccan (Domestic routes) Flying Chef  2. Price  Kingfisher Airlines being a premium airline adopts a premium pricing Strategy Kingfisher Red its low fare arm adopts a low fare pricing The pricing strategy aviation industry is highly dependent on the behavior of the crude oil prices, dollar rates and competition. Fuel at present accounts for 45 per cent of an airline’s total operating cost.  3. Place  Kingfisher Airlines operates services to 80 destinations domestic as well as international. International operations started on 3 September 2008, with a flight from Bangalore to London. One of the reasons to acquire Air Deccan was to gain entry on to the international circuit, by gaining advantage on Air Deccan`s eligibility to fly international (as per DGCA rules) It also has plans to add several international destinations such as Bangkok, Hong Kong, Karachi, Kuala Lumpur, Lahore, Malé and Singapore in 2009
  68. 68.  4. Promotion  Kingfisher Airlines as a brand is promoted in many ways When it was launched Yana Gupta was the brand ambassador Hoardings/ Press Release Kingfisher Airlines sponsors Mumbai ATP Open KF First sponsors Mtv Style Awards 06 Kingfisher kicks off Rs 1 billion campaign (On Launch of its international flight to London) Formula 1 team (Force India) IPL team (Royal Challengers) Red Pouch The colour “RED” King Club frequent flier programme Vijay Mallya himself is a brand ambassador for all his brands including Kingfisher Airlines  5. Physical Evidence  Kingfisher Airlines started its operations on May 9, 2005 with a fleet of 4 Airbus A320 aircrafts. Kingfisher Airlines was the first airline in India to operate with all new aircraft. On June 15 2005 Kingfisher Airlines became the first Indian airline to order the Airbus A380, to be delivered by 2014 Fleet size of 73 and 137 orders placed The planes have the best in-flight facilities that match world class standards
  69. 69.  6. Process  KFs Tickets through ATMs The Roving Agent Web Check-In FlyBuy SMS Flight Updates Mobile Ticketing  7. People  Being a service industry it has two types of customers: External Customers (Passengers) Internal Customers (Employees) Kingfisher Airlines uses the term “Guests” for its external customers. Dr Mallya tells his crew to treat every guest “In the same way as if they have visited his home.” In an airline,Cabin Crew play an important role because they are the ones who deliver the service and therefore they are termed as The Walking Billboards of an organization.
  70. 70. 91
  71. 71. “Would you tell me, please, which way I ought to go from here?” -Alice (from Lewis Carroll’s Alice in Wonderland)
  72. 72. Objective  Explain company-wide strategic planning  Understand the concepts of stakeholders, processes, resources, and organization as they relate to a high- performing business  Explain the four planning activities of corporate strategic planning
  73. 73. Market-Oriented Strategic Planning  Market-oriented strategic planning is the managerial process of developing and maintaining a feasible fit between the organization’s objectives, skills and resources and its changing market opportunities
  74. 74. Nature of High-Performance Business  Stakeholders  Processes  Resources  Organization
  75. 75. The Relationship Between Analysis, Planning, Implementation, and Control
  76. 76. The High Performance Business
  77. 77. Strategic Planning Strategic planning is the process of developing and maintaining a feasible fit between the organization’s objectives, skills, and resources and its changing marketing opportunities (Kotler pg38) 98
  78. 78. Strategic Planning According to Kotler (2012) Company-wide strategic planning guides marketing strategy and planning. Like marketing strategy, the company’s broad strategy must also be customer oriented 99
  79. 79. Reasons for Planning Kotler posit the following :  if one does not know where we are going any road will take us there.  The essence of strategic planning is the contemplation of current decision choices in the light of their probable outcome in the future  The future is unpredictable however it is not a arbitrary stroll. 100
  80. 80. Four Organizational Levels of Strategic Planning Source: Marketing for Hospitality and Tourism, 3e ©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458 101 Corporate SBU Unit Functional
  81. 81. Four Steps in Corporate Strategic Planning Process 1. Defining the corporate mission. 2. Establishing strategic business units (SBU). 3. Assigning resources to each SBU. 4. Developing growth strategies (Kotler pg 38- 102
  82. 82. Corporate Strategic Planning (cont.) Defining the corporate mission 1. Mission  The organization’s mission should define the competitive scopes within which the company will operate. Industry scope, products and applications scope, competencies scope, market-segment scope, and vertical scope.  should be market oriented and defined in terms of satisfying basic customer needs.  Products and technologies eventually become outdated, but basic market needs may last forever. 103
  83. 83. Corporate Strategic Planning (cont.) Defining the corporate mission 1. Mission Questions to ask in establishing Mission!  What is our current business?  Who is the customer?  What do consumers value?  What do we do best?  What should our business be?  What are the values/ethics of the company? 104
  84. 84. Corporate Strategic Planning (cont.) Defining the corporate mission 2. Establishing Strategic Business Units Business portfolio:The collection of businesses and products that make up the company.( Kotler 2012 pg 40) • Define Strategic Business Units by need rather than product.  food vs patty  Convenience food fried chicken etc  Defining business by product lead to • Defined in terms of satisfying basic customer needs to Marketing myopia – communication vs blackberry phone. 105
  85. 85. Corporate Strategic Planning (cont.) Defining the corporate mission 2. Establishing Strategic Business Units Kotler contends the following : The best business portfolio is the one that best fits the company’s strengths and weaknesses to opportunities in the environment. Business portfolio planning involves two steps.  First, the company must analyze its current business portfolio and determine which businesses should receive more, less, or no investment. 106 Portfolio analysis The process by which Management evaluates the products and businesses that make up the company. (Kotler 2012 pg 42)
  86. 86. Corporate Strategic Planning (cont.) Defining the corporate mission 2. Establishing Strategic Business Units Kotler contends the following :  Second, it must shape the future portfolio by developing strategies for growth and downsizing. The purpose of strategic planning is to find ways in which the company can best use its strengths to take advantage of attractive opportunities in the environment. 107
  87. 87. Corporate Strategic Planning (cont.) Defining the corporate mission 3. Assigning Resources to Each SBU • The best-known portfolio-planning /analytical tools is the Boston Consulting Group growth-share matrix are used to guide management in evaluating each SBU. • Anticipate changes 108 Growth-share matrix A portfolio-planning method that evaluates a company’s SBUs in terms of its market growth rate and relative market share. (Kotler…..)
  88. 88. Analyzing Current SBU’s: Boston Consulting Group Approach 109 MarketGrowthRate LowHigh Question Marks • High growth, low share • Build into Stars or phase out • Require cash to hold market share Stars • High growth & share • Profit potential • May need heavy investment to grow Cash Cows • Low growth, high share • Established, successful SBU’s •Produce cash Dogs • Low growth & share • Low profit potential High Low Relative Market Share
  89. 89. Limitations of the Boston Consulting Group Approach 110 Porter contend that the BCG matrix exhibits the following weaknesses: 1. Market growth rate is only one factor in industry attractiveness:-  relative market share is only one factor in competitive advantage.  The growth-share matrix overlooks many other factors in these two important determinants of profitability. 2. The framework assumes that each SBU is independent of the others.  In some cases, a business unit that is a "dog" may be helping other business units gain a competitive advantage.
  90. 90. Limitations of the Boston Consulting Group Approach 111 3. The matrix depends heavily upon the breadth of the definition of the market.  A business unit may dominate its small niche, but have very low market share in the overall industry. In such a case, the definition of the market can make the difference between a dog and a cash cow. (adapted from:
  91. 91. Corporate Strategic Planning (cont.) 4. Developing Growth Strategies  Intensive growth opportunities: Identify further opportunities to achieve growth within the company’s current business.  Market penetration strategy seeks to increase current products in current markets.  Market development strategy looks for new markets in which current products can expand.  Product development strategy considers new product possibilities 112
  92. 92. Corporate Strategic Planning (cont.) - Diversification growth opportunities: Identify opportunities to add attractive businesses that are unrelated to the company’s current businesses.  Concentric diversification strategy: Company seeks new products that have technological and/or marketing synergy with existing product lines, even though the product may appeal to a new class of customers 113
  93. 93. Corporate Strategic Planning (cont.) - Horizontal diversification strategy: Company searches for new products that could appeal to its current customers though technologically unrelated to its current product line.  Conglomerate diversification strategy.- Financial Institutions getting into real estates or farming business 114
  94. 94. Corporate Strategic Planning (cont.) - Integrative growth opportunities.  Backward integration: An Agro-Processing company acquiring one of its supplier’ farms.  Forward integration: Agro Processing company acquiring a distribution chain. conglomerate  Horizontal integration: An Agro-Processing company acquiring one or more competitors, provided the government does not bar the move. or Digicel acquiring Claro 115
  95. 95. Developing Growth Strategies in the Age of Connectedness 116 1. Market Penetration 2. Market Development 3. Product Development 4. Diversification Existing Markets New Markets Existing Products New Products Product/ Market Expansion Grid Adapted from Kotler. pg44
  96. 96. Developing Growth Strategies in the Age of Connectedness 117 Product/ Market Expansion Grid Product/market expansion grid:- A portfolio-planning tool for identifying company growth opportunities through market penetration, market development, product development, or diversification
  97. 97. Business Strategy Planning – Planning at the SBU Level 1. Business mission 2.External environment analysis– opportunities and threats 3.Internal environment analysis– strengths and weaknesses 4.Goal Formulation (What do we want?)–The vision 118
  98. 98. Business Strategy Planning (cont.) 5. Strategy Formulation (How do we get there?) - Michael Porter’s three generic types of strategy:  Overall cost leadership  Differentiation  Focus  Strategic Alliances: companies need to form strategic alliances with domestic or multinational companies that complement or leverage their capabilities and resources to achieve leadership nationally or globally. 119
  99. 99. Business Strategy Planning (cont.) 6. Program formulation. Corporations must develop hiring, training, advertising, and other programs to support their strategy. 7. Implementation. If A firm is going to be successful , it must communicate its strategy to its employees and it must have the resources to carry out its strategy. 120
  100. 100. Business Strategy Planning (cont.) 8. Feedback and control are unquestionably essential to track outcomes and monitor new developments in the market environment. 121
  101. 101. “If you don’t have a competitive advantage, don’t compete.” - Jack Welch “At Preferred Hotels & Resorts, we believe that the product preferences of affluent customers are as diverse as the consumers themselves.” - Peter Cass
  102. 102. Purpose of a Marketing Plan  Provides a road map for all marketing activities of the firm for the next year  Ensures that marketing activities are in agreement with the corporate strategic plan  Forces marketing managers to review and think through objectively all steps in the marketing process  Assist in the budgeting process to match resources with marketing objectives  Creates a process to monitor actual against expected results ☞ It is also an excellent training device for younger staff members who wish to be manager
  103. 103. Marketing Plan Sections I. Executive Summary II. Corporate Connection III. Environmental Analysis and Forecasting (Positioning Statement) IV. Segmentation and Targeting V. Next Year’s Objectives and Quotas VI. Action Plans: Strategies and Tactics VII. Resources Needed to Support Strategies and Meet Objectives VIII. Marketing Control IX. Presenting and Selling the Plan X. Preparing for the Future
  104. 104. Section I: Executive Summary ☞ A few tips in writing the executive summary  Write it for top executives  Limit the pages to between two and four  Use short sentences and paragraphs  Avoid using words that are unlikely to be understood.  Organize the summary as follows: describe next year’s objectives in quantitative terms; briefly describe marketing strategies to meet goals and objectives, including a description of target markets; describe expected results by quarter; identify the dollar costs necessary, as well as key resources needed
  105. 105. Environmental Analysis and Forecasting  Positioning Statement: - A marketing plan should provide a positioning statement of how the enterprise intends to differentiate – position itself in the marketplace ☜ Advertising Sources ☞ Due to confused array of strategy and tactics, the desired position let’s them know stakeholders and publics. ☞ American Air vs Southwest Air  Major Environmental Factors  Social: crime, demographics, geographic ☞ Hotel market in India vs America  Political: legislation, taxes ☞ local policies and international policies. ☞ No tax, Exchange Policy  Economic: lodging and cruising sectors are highly sensitive to business-cycle movement
  106. 106. Cont.. Competitive Analysis: Scales and contents, guests, sales force and their abilities.  Market Trends  Visitor Trends: Business sources  Competitive Trends: all concerned  Related Industry Trends: Opportunities ☞ Select only those trends that are useful in developing the plan.  Market Potential: should be viewed as the total available demand for a hospitality product within a particular geographic market at a given price. ☞ Search from All suite hotel to budget motel - Never assume that market potential is static or that it is unimportant to marketing success. - “Guesstimates” ← meet competitors  Market Research  Macromarket information  Industry trends, social-economic political trends, competitive information, industry wide customer data, etc,.
  107. 107. Market research  Market Research  Micromarket Information  Guest information, product/service information, new product analysis and testing, intermediary buyer data, pricing studies, key account information, advertising/promotion effectiveness  Marketing/Advertising/Sales managers need a continuous flow of reliable informations(through PMS) → essential for the coming year.
  108. 108. Segmentation Targeting and positioning  Segmentation Analysis is the selection of segments as the result of  Understanding what the company is and what it wishes to be  Studying available segments and determining if they fit the capabilities and desires of the company to obtain and secure them ☞ Refer to Embassy Suite in Dallas
  109. 109.  Segmentation Analysis - A marketing plan tells you; ☞ Who is using your hotel? ☞ Who might be using your hotel? ☞ Where you can look to expand your business? - Marketers must look to both internal and external data sources for information concerning market segments–refer to 776
  110. 110.  Targeting - Begins by defining the mix of desired guests  support the positioning strategy of the company  support revenue management - Selected from the list of available segments ☞ Majority of target market will remain the same and new one appear
  111. 111. Benefits of Segmentation  Effective use of resources  Gain a focus  Create Value for a target market  Positioning 132
  112. 112. Steps in Market Segmentation, Targeting, and Positioning 133 Market Segmentation 1. Identify bases for segmenting the market 2. Develop segment profiles Market Targeting 3. Develop measure of segment attractiveness 4. Select target segments Market Positioning 5. Develop positioning for target segments 6. Develop a marketing mix for each segment
  113. 113. Step 1. Market Segmentation Levels of Market Segmentation 134 Through Market Segmentation, Companies Divide Large, Heterogeneous Markets into Smaller Segments that Can be Reached More Efficiently And Effectively With Products and Services That Match Their Unique Needs. Mass Marketing Same product to all consumers (no segmentation, i. e. a commodity) Segment Marketing Different products to one or more segments (some segmentation, i.e. Marriott)
  114. 114. Step 1. Market Segmentation Geographic Segmentation 135 Regional/City National International Accor
  115. 115. Step 1. Market Segmentation Demographic Segmentation  Dividing the market into groups based on variables such as:  Age  Gender  Family size or life cycle  Income  Occupation  Education  Religion  Race  Generation  Nationality 136
  116. 116. Step 1. Market Segmentation Psychographic Segmentation 137 Divides Buyers Into Different Groups Based on:
  117. 117. Step 1. Market Segmentation Behavioral Segmentation  Dividing the market into groups based on variables such as:  Occasions  Benefits  User status  Usage rate  Loyalty status  Readiness stage  Attitude toward product 138
  118. 118. Step 1. Market Segmentation Segments must respond differently to different marketing mix elements & programs Requirements for effective segmentation 139 • Size, purchasing power, profiles of segments can be measured. • Segments can be effectively reached and served. • Segments are large or profitable enough to serve. Measurable Accessible Substantial Actionable • Effective programs can be designed to attract and serve the segments.
  119. 119. Evaluating Market Segments  Segment size and growth  Segment structural attractiveness  Company objectives and resources 140
  120. 120. Step 2. Market Targeting Market Coverage Strategies 141 Segment 1 Segment 2 Segment 3 Segment 1 Segment 2 Segment 3 Company Marketing Mix Company Marketing Mix Company Marketing Mix 1 Company Marketing Mix 2 Company Marketing Mix 3 Market A. Undifferentiated Marketing B. Differentiated Marketing C. Concentrated Marketing
  121. 121. Choosing a market-coverage strategy Company resources Degree of product homogeneity Market homogeneity Competitors’ strategies 142
  122. 122. Step 3: Positioning for Competitive Advantage  Product’s Position - the way the product is defined by consumers on important attributes - the place the product occupies in consumers’ minds relative to competing products. Marketers must:  Plan positions to give their products the greatest advantage in selected target markets 143
  123. 123. Positioning Strategies  Positioning by specific product attributes  Positioning by benefits  Positioning for user category  Positioning for usage occasion  Positioning against another competitors  Positioning against another product class Marketing for Hospitality and Tourism, 3e ©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458 144
  124. 124.  Step 1. Identifying Possible Competitive Advantages: Competitive Differentiation.  Step 2. Selecting the Right Competitive Advantage: Unique Selling Proposition (USP).  Step 3. Communicating and Delivering the Chosen Position. 145 Steps to Choosing and Implementing a Positioning Strategy
  125. 125. Product Differentiation Physical attributes Service differentiation Personnel differentiation Location Image differentiation 146
  126. 126. Which differences to promote?  Important to customers  Distinctive  Superior  Communicable to customers  Preemptive  Affordable  Profitable 147