Marketing for Hospitality and Tourism Chapter 3 Marketing and Stratigic Planning

Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
© 2010 Pearson Higher Education, Inc.
Pearson Prentice Hall - Upper Saddle River, NJ 07458
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“Would you tell me, please,
which way I ought to go from
here?” said Alice.
“That depends a good deal
on where you want to get to,”
said Cheshire Cat.
— LEWIS CARROLL
(ALICE IN WONDERLAND)
After reading this chapter, you should be able to:
OBJECTIVES
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• Explain company-wide strategic planning.
After reading this chapter, you should be able to:
OBJECTIVES
• 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.
• Understand the processes involved in defining a
company’s mission and setting goals and objectives.
• Discuss how to design business portfolios and
growth strategies and explain the steps involved
in the business strategy planning process.

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• A major challenge facing hospitality companies is
building & maintaining healthy businesses in a
rapidly changing marketplace & environment.
• The consulting firm of Arthur D. Little proposed a
model of the characteristics of a high-performance
business which pointed to four factors:
– stakeholders, processes, resources, and organization.
Nature of High-Performance Business
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• The starting point for any business is to define the
stakeholders and their needs.
• A business must at strive to satisfy the minimum
expectations of each stakeholder group.
– including customers, employees, suppliers, and the
communities where their businesses are located
Stakeholders
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• Departmental organization poses some problems, as
departments typically operate to maximize their own
objectives, not necessarily the company’s.
– walls go up between departments
– there is usually less than ideal cooperation
– work is slowed & plans often are altered
• Companies are increasingly refocusing attention on
the need to manage processes more than departments.
Processes
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• To carry out processes, a company needs resources
like personnel, materials, machines, and information.
– traditionally, companies sought to own & control
most of the resources that entered the business
• Companies are finding some resources under their
control are not performing as well as those they
could obtain from outside.
– more companies today outsource less critical sources
Resources
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• The organizational side of a company consists of its
structure, policies, and culture.
– all of which tend to become dysfunctional in a rapidly
changing company
• Although structure and policies can be changed, the
company is the hardest to change.
Organization
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Figure 3-1 Steps in Strategic Planning.
• The company starts strategic planning by defining its
overall purpose & mission at the corporate level.
– this mission is turned into detailed supporting objectives.
Strategic Planning: Defining Marketing’s Role
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• At first, it has a clear mission or purpose, but over
time, its mission may become unclear.
– as the organization grows, adds new products &
markets, or faces new conditions in the environment
Defining the Corporate Mission
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• Missions are at their best when they are guided by a
vision, an almost impossible dream.
• The corporate mission statement should stress
major policies the company wants to honor.
– policies define how employees should deal with
customers, suppliers, competitors & other groups
Defining the Corporate Mission
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• The company needs to turn its mission into detailed
supporting objectives for each level of management.
– each manager should have objectives and be responsible
for reaching them
Setting Company Objectives and Goals
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• Most companies operate several businesses, however,
they often fail to define them carefully.
– businesses are too often defined in terms of products
Designing The Business Portfolio
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• Companies need growth if they are to compete and
attract top talent.
– at the same time, a firm must be careful not to make
growth itself an objective
– the company’s objective must be “profitable growth”
Developing Growth Strategies
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• Management first considers whether it could gain
more market share with its current products in their
current markets
– market concentration strategy
• Then it considers whether it can find or develop new
markets for its current products
– market development strategy
• Next, management should consider product
development:
– offering modified or new products to current markets
Developing Growth Strategies
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• Diversification growth makes sense when good
opportunities are found outside present businesses.
Three types of diversification can be considered:
• The company could seek new products with
technological or marketing synergies with existing
product lines, even though the products may appeal
to a new class of customers
– concentric diversification strategy
Diversification Growth
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• The company might search for new products that
could appeal to its current customers, although
technologically unrelated to its current product line.
– horizontal diversification strategy
• The company might seek new businesses that have
no relationship to the company’s current technology,
products, or markets.
– conglomerate diversification strategy
Diversification Growth
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• Since markets consists of many types of customers,
products, and needs, the marketer must determine
which segments offer the best opportunities.
– consumers can be grouped & served based on geographic,
demographic, psychographic, and behavioral factors
• Dividing a market into distinct groups of buyers who
have different needs, characteristics, or behavior,
who might require separate products or marketing
programs is called market segmentation.
Market Segmentation
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• Market targeting involves evaluating each market
segment’s attractiveness and selecting one or more
segments to enter.
Market Targeting
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• After a company has decided which market segments
to enter, it must decide how it will differentiate its
market offering for each targeted segment and what
positions it wants to occupy in those segments.
• Positioning is arranging for a product to occupy a
clear, distinctive, and desirable place relative to
competing products in the minds of target consumers.
Market Differentiation and Positioning
Customer-Driven Marketing Strategy
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• Where marketers see themselves as selling products,
customers see themselves as buying value or
solutions to their problems.
Developing an Integrated Marketing Mix
• Marketers would do well to think through the four Cs
first and then build the four Ps on that platform.
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• The marketer should conduct a SWOT analysis,
which evaluates the company’s overall strengths (S),
weaknesses (W), opportunities (O), and threats (T).
Marketing Analysis
Figure 3-5
SWOT analysis.
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• Strengths include internal capabilities, resources,
and positive situational factors that help the company
to serve its customers and achieve its objectives.
• Weaknesses include internal limitations & negative
situational factors that may interfere with the
company’s performance.
• Opportunities are favorable factors or trends in the
external environment that the company may be able
to exploit to its advantage.
• Threats are unfavorable external factors or trends
that may present challenges to performance.
Marketing Analysis
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• Marketing planning involves deciding on marketing
strategies that will help the company attain its overall
strategic objectives.
– a detailed marketing plan is needed for each business,
product, or brand
• The plan begins with an executive summary of major
assessments, goals and recommendations.
Marketing Planning
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END
CHAPTER END

Marketing for Hospitality and Tourism Chapter 3 Marketing and Stratigic Planning

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