Tourism Marketing Introduction

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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It is the whole business seen

from the point of View of its

final result, that is, from the

customer’s point of view…

Business success is not

determined by the producer

but by the customer.

— PETER DRUCKER

Marketing is so basic…

It cannot be considered a

separate function.

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After reading this chapter, you should be able to:

OBJECTIVES





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• Understand the relationships between the world’s

hospitality and travel industry.

After reading this chapter, you should be able to:

OBJECTIVES

• Define marketing and outline the steps in the

marketing process.

• Explain the relationships between customer value

and satisfaction.

• Understand why the marketing concept calls for a

customer orientation.

• Understand the concept of the lifetime value of a

customer and be able to relate it to customer loyalty

and retention.





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• As a manager in a global economy, marketing will

greatly assist your personal career & the success of

the enterprise you manage.

– in today’s hospitality/travel industry, the customer is

global and is king or queen

• Customers can enhance or damage your career

through the purchase choices they make and the

positive or negative comments they make to others.

• The travel industry is the world’s largest industry

and the most international in nature.

– receipts of over $1 trillion and over 1 billion travelers

Hospitality in a Global Economy

Your Passport to Success

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• Thirty years ago there

was nothing in Dubai

but a creek, a sheik’s

palace, and a reputation

as a smuggling capital

of the Arabian Gulf.



• Today Dubai boasts some of the world’s best hotels

& $70 billion committed to development of tourism.

– 30% of Dubai’s gross domestic product is from travel &

tourism, and will increase when DUBAILANDTM opens

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http://www.dubailand.ae/





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• The title ―The World’s Best Airport‖ is not held by

a US or European airport, but by Hong Kong.

– Hong Kong International Airport boasts the world’s

largest enclosed space, with a terminal eventually

capable of handling 87 million visitors per year

• The best international airline is Singapore Airlines

• The world’s best hotel is Oberoi Udaivilas in

Udaipur, India.

– the other top five hotels are in four different countries:

South Africa, Thailand, Turkey, and Italy.



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http://www.hongkongairport.com/eng/index.html

http://www.singaporeair.com/saa/index.jsp

http://www.udaivilas.com/

http://www.udaivilas.com/





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• Tourism planning/promotion departments and

hospitality companies are filled with college

graduates from across the globe.

• Competition is strong and getting tougher each day.

– yet opportunities are greater than ever before

• Welcome to marketing…

Managing in a Global Economy


Your passport

to success!

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• Today marketing isn’t simply a business function.

– it’s a philosophy, a way of thinking, and a way

of structuring your business and your mind

– marketing is much more than a new ad campaign

• Marketing’s task is to provide real value to targeted

customers, motivate purchase, fulfill consumer

needs, and never fool the customer or endanger

the company’s image.

• Creating customer value and satisfaction are at the

heart of hospitality and travel industry marketing.

Marketing in a Global Economy


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• Today’s successful companies are strongly customer

focused and heavily committed to marketing.

• Accor has become one of the world’s largest hotel

chains by delivering L’esprit Accor

– the ability to anticipate and meet the needs of their

guests, with genuine attention to detail

• Ritz-Carlton promises & delivers truly ―memorable

experiences‖ for its guests.

• McDonald’s® grew into the world’s largest

restaurant chain by providing its guests with

QSC&V (quality, service, cleanliness, and value).



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http://www.accorhotels.com/

http://www.accorhotels.com/

http://www.ritzcarlton.com/




http://www.mcdonalds.com/







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• Successful hospitality companies know that if they

take care of their customers, market share & profits

will follow.

• As a manager, you will be motivating your

employees to create superior value for your

customers.

• You will want to make sure that you deliver

customer satisfaction at a profit.

• This is the simplest definition of marketing.



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• The purpose of a business is to create and maintain

satisfied, profitable customers.

– customers are attracted/retained when their needs are met

– customers talk favorably to others about their satisfaction

• Some hospitality managers act as if today’s profits

are primary and customer satisfaction is secondary.

– this attitude eventually sinks a firm as it finds fewer repeat

customers and faces increasingly negative word of mouth

• Successful managers understand that profits are best

seen as the result of running a business well rather

than as its sole purpose.

Customer Orientation

Satisfied Customers

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• When a business satisfies its customers, they will pay

a fair price for the product, which includes a profit

for the firm.

• Managers who forever try to maximize short-run

profits are short-selling both customer & company.

– much of the behavior of employees toward their

customers is the result of management philosophy

• The alternative management approach is to put the

customer first and reward employees for serving the

customer well.


Satisfied, Profitable Customers

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• Without customers,

assets have no value.

– a new multi-million-dollar

restaurant will close

– a $300 million hotel will

go into receivership


Satisfied, Profitable, Repeat Customers

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• It is wise to assess the customer’s long-term value

and take appropriate actions to ensure a customer’s

long-term support.

• The Forum Company found the cost of retaining a

loyal customer is 20 percent of the cost of attracting

a new one.

• Another study found an increase in customer

retention rates yielded a profit increase of 25 to

125 percent.


Satisfied, Profitable, Repeat Customers

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• In the hotel industry, marketing and sales are often

thought to be the same

• Sales managers provide prospective clients with

tours, entertaining them in the hotel’s food and

beverage outlets.

– the sales function is highly visible, where most areas of

the marketing function take place behind closed doors

• It is not uncommon to hear restaurant managers say

that they ―do not believe in marketing‖.

– when they actually mean they are disappointed

with the impact of their advertising

Sales & Marketing

What is Hospitality and Tourism Marketing?

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• Advertising and sales are components of the

promotional element of the marketing mix.

– other elements include product, price, and distribution,

research, information systems, and planning

The Marketing Mix


• The Four-P framework calls for marketing to decide:

• Some critics feel the four Ps underemphasize or

omit certain important activities

– Product: the product and its characteristics

– Price: set the price

– Place: decide how to distribute the product

– Promotion: choose methods for promoting the product

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• If marketers do a good job of identifying consumer

needs, developing a good product, and pricing,

distributing, and promoting it effectively, the result

will be attractive products and satisfied customers.

Products Serving Needs


Starbucks Coffee has created customer

loyalty, allowing it to open shops around the

world. In this photo, Starbucks customers sit

in an outdoor café in Singapore. © Jonathan

Drake.

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• Marriott developed its Courtyard concept; Darden

designed the Olive Garden Italian Restaurant.

Products Serving Needs


Companies such as Sonic have brought

marketing skills to the restaurant industry.

Courtesy of Sonic Corporation and

Subsidiaries.

• Different products, offering new consumer benefits.

– marketing means ―hitting the mark.‖

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• The marketing mix must be just that—a mix of

ingredients to create an effective

product/service package for the target market.

• This does not mean that selling and promotion are

unimportant.

– they are part of a larger marketing mix, a set of marketing

tools that work together to produce satisfied customers

• The only way selling and promoting will be

effective is if we first define customer targets and

needs and then prepare an easily accessible and

available value package.

Effective Marketing


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• The hospitality industry is one of the world’s major

industries & in the US, the second largest employer.

• The entrance of corporate giants into the hospitality

market transformed it from a mom-and-pop industry

to an industry is now dominated by chains

• Twenty-four companies now account for over a third

of all restaurants in the United States.

– McDonald’s leads the restaurant group at over 30,000

stores in 119 countries serving 52 million customers a day

– Accor, Blackstone & Starwood are buying hotel chains

and operating different brands under one organization

Importance of Marketing

Marketing in the Hospitality Industry

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• In response to growing competitive pressures, hotel

chains are relying more on the marketing director.

• While the marketing director is a full-time marketer,

everyone else must be a part-time marketer.

– all managers must understand marketing

Importance of Marketing


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• The two main industries comprising the activities we

call tourism are the hospitality and travel industries.

– successful hospitality marketing is highly dependent on

the entire travel industry

Tourism Marketing


• Many resort/hotel guests

purchase travel-hospitality

packages assembled by

wholesalers and offered

through travel agents

Visitors to international destinations, such as these tourists on the Brazilian side of Iguacu Falls, often

purchase packages that include international airfare, ground transportation, and hotel

accommodations. Courtesy of Demetrio Carrasco © Dorling Kindersley.

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• By agreeing to participate in packages arranged by

wholesalers, hotels effectively eliminate competitors.

• Hotel & rental car companies have developed

cooperative relationships with airlines that offer

frequent-flyer plans.

• The success of cruise lines is a result of coordinated

marketing by many travel industry members.

– airlines, auto rental firms, and passenger railways

cooperatively develop packages with cruise lines

– requires coordination in pricing, promotion &

delivery of those packages

Cooperative Marketing


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• Government or quasi-government agencies play an

important role through legislation and promotion of

regions, states, and nations.

• Few industries are as interdependent as travel–

hospitality which will only increase in complexity.

• The travel industry must understand the big picture and

respond to changing consumer needs through creative

strategies based on solid marketing knowledge.

Marketing Complexities and Definition


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• Many people think of marketing only as selling

and advertising, which is really only a tip of the

marketing iceberg.

– today, marketing must be understood in a sense

of satisfying customer needs

• If the marketer understands customer needs;

develops products that provide superior customer

value; and prices, distributes, and promotes them

effectively, these products will be sought after by

the customer. • Marketing is the art and science of finding, retaining, and growing

profitable customers.

Definition of Marketing


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Figure 1-1

A simple model

of the marketing

process.

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2 3

4

The Marketing Process

A Five-Step Model

• Here are steps one through four of a simple five-step

model of the marketing process.

– companies working to understand consumers, create

customer value & build strong customer relationships

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• In the fifth, final step, companies reap the rewards

of creating superior customer value.

The Marketing Process

A Closer Look

• By creating value for

customers, they capture

value from customers

in the form of sales,

profits & long-term

customer equity.

• As the first step, marketers need to understand

customer needs & wants, and the marketplace

within which they operate.

Figure 1-1

5

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• The most basic concept underlying marketing is that

of human needs. A human need is a state of felt

deprivation.

– these needs were not invented by marketers, but

are part of the human makeup

• The second basic concept to marketing is that of

human wants, the form human needs take as they

are shaped by culture and individual personality.

– wants are how people communicate their needs

– wants are described in terms of objectives that will

satisfy needs

Understanding the Marketplace & Customer Needs

Customer Needs, Wants and Demands

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• Sellers can confuse wants with needs. A drill bit

maker may think his customer needs a drill bit,

but what the customer really needs is a hole.

– these sellers forget that a physical product is only a

tool to solve a consumer problem.

• These sellers get into trouble if a new product comes

along that serves the need better or cheaper.

Understanding the Marketplace…


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• People have almost unlimited wants, but limited

resources, and so choose products that

produce the most satisfaction for their money.

– when backed by buying power, wants become

demands

• Outstanding marketing organizations go to great

lengths to learn about & understand their

customer’s needs, wants and demands.

– they conduct customer research.

– smart companies also have employees at all levels—

including top management—stay close to customers

The Marketplace & Customer Needs


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• Consumer needs and wants are fulfilled through a

market offering.

– a product that is some combination of tangible, services,

information, or experiential product components

• In the hospitality industry, the intangible product

including customer service and experiences are

more important than the tangible products.

– a market offering includes much more than physical

goods or services

• Consumers decide which destinations to visit, events

to experience, hotels and restaurants to patronize.

Products, Services, and Experiences


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– at a Ritz-Carlton Resort, every evening at sunset they set

up chairs on the beach & hire a cellist to play

– Marriott provides Dolphin safaris at its Newport Beach

property, and a water rafting trip for its Utah property

– Lufthansa and Air France created a personalized first-

class service above regular first class

Tangible Products, Services, and Experiences


• To the consumer these are all products.

• Managers of resorts realize their guests will be

leaving with memories of their stay, and try to

create experiences that will generate pleasant ones.

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– luxury hotels in Hong Kong such as The Shangri-La do

not expect ―executive guests‖ to stand in line to register

– Domino’s Pizza saves the customer time and provides

convenience by delivering pizza

– limited service hotels provide value to the overnight

traveler by offering a free continental breakfast

Customer Value and Satisfaction


• Customer value is the difference between benefits

the customer gains from owning and/or using a

product, and the costs of obtaining the product.

• Costs can be monetary or nonmonetary & a very big

nonmonetary costs for hospitality customers is time.

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• One of the biggest management challenges is to

increase their product value for their target market.

– managers must know their customers and

understand what creates value for them

• Customer expectations are based on past buying

experiences, the opinions of friends, and market

information.

• Marketers must set the right level of expectations.

– if they set expectations too low, they may satisfy

those who buy but fail to attract new customers

– too high and buyers will be disappointed



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• Managers must realize the importance of creating

highly satisfied, rather than just satisfied customers.

• On a 7-point scale, with 1 very satisfied and 7 very

dissatisfied, most managers are happy to receive a 2.

• Think of the last time you went to a restaurant and

were just satisfied. Would you go back?

– probably not

• When you walk out of a restaurant and say,

―Wow, that was great!‖

– you will probably return and tell others about your

discovery



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Figure 1-2 Scores of 1, 2, and 3 are all on the satisfaction side of the scale; that is, they are all better

than a score of 4, which is ―neither satisfied nor dissatisfied.‖ You can see that satisfying

the guest is not enough. Only when guests leave very satisfied are they likely to come back.

As a manager, your goal is to have all guests leave very satisfied.

Results of a guest survey at

a Boston hotel show a huge

gap between a guest who

rates a hotel a 1, and a

guest who rates it a 2.

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• Exchange is the act of obtaining a desired object

from someone by offering something in return.

• Marketing consists of actions taken to build and

maintain desirable exchange relationships with

target markets.

• Beyond attracting new customers and creating

transactions, the goal is to retain customers and

grow their business with the company.

• The concept of transactions leads to the concept

of a market.


Exchanges and Relationships

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• A market is a set of actual and

potential buyers of a product.

Markets


This advertisement for The Point Hilton Resorts communicates the

variety of activities that the resorts offer. These activities will increase

the value of the resort to those customers who perceive them as

benefits. Courtesy of The Pointe Hilton Resorts, Phoenix, Arizona.

• These buyers share a particular need

or want that can be satisfied through

exchange relationships.

• Marketing means managing markets

to bring about profitable customer

relationships.

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• Marketing management can be defined as the art

and science of choosing target markets and building

profitable relationships with them.

• To design a winning marketing strategy two

important questions require answers:

– What customers will we serve?

(what is our target market)?

– How can we serve these customers best?

(what’s our value proposition)?

• The company wants to select only customers that

it can serve well and profitably.

Designing Customer-Driven Marketing Strategy

Selecting Customers to Serve

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• A company’s value proposition is the set of benefits

or values it promises to deliver to consumers to

satisfy their needs.

– such propositions differentiate one brand from another

• The company must decide how it will serve targeted

customers—how it will differentiate and position

itself in the marketplace.

• Companies must design strong value propositions

that give them the greatest advantage in their target

markets.


Choosing a Value Proposition

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• What philosophy should guide marketing strategies

that will build profitable relationships with target

consumers?

• What weight should be given to the interests of

customers, the organization, and society?

– often, these interests conflict with each other

• There are five alternative concepts under which

organizations design and carry out their marketing

strategies:

– production, product, selling, marketing, &societal

marketing concepts


Marketing Management Orientation

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• One of the oldest philosophies guiding sellers, the

production concept holds that consumers will favor

products that are available & highly affordable.

– therefore management should focus on production

and distribution efficiency

• Management may become so focused on production

systems they forget the customer.

• Unionization of service staff is another reason for

a production mentality, when workers tend to work

in accordance with union work rules, which often

conflict with customer needs.


The Production Concept

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The Product Concept

One way that Olive Garden Italian Restaurants differentiates itself

is by freshly grating cheese for the guest. Courtesy of Jeff

Greenberg/Alamy Images.

• The product concept, like the production concept,

has an inward focus.

• This concept holds that consumers

will favor products which offer

the most in quality, performance,

and innovative features.

• Focusing only on the products

can lead to marketing myopia.

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• The selling concept holds consumers will not buy

enough products unless the organization undertakes

a large selling and promotion effort.

• The aim is to get every possible sale, not worry about

satisfaction or the revenue contribution of the sale.

• It does not establish a long-term relationship with the

customer; the focus is on getting rid of what one has.

• The concept exists within the hospitality industry,

with overcapacity being a major contributing factor.

– when owners & top management face overcapacity,

the tendency is to sell, sell, sell


The Selling Concept

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• Pride in having the most capacity and false belief

economies of scale will occur as size increases.

• Economic incentives by governments to build a

larger tourism/hospitality infrastructure to create

economic growth.

– tax laws encourage overbuilding because of tax write-offs

• Poor/nonexistent forecasting & planning by owners,

consultants, financial organizations, governments.

– failure to merge revenue & sales/marketing management

• A myth that the travel industry faces almost

unlimited future demand.


Causes of Overcapacity

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• The marketing concept is a recent philosophy and

is being rapidly adopted in the hospitality industry.

• It holds that achieving organizational goals depends

on determining needs & wants of target markets and

delivering the desired satisfaction more effectively

and efficiently than competitors.

– Four Seasons Hotels, Accor, and McDonald’s follow

this concept fully

• The pure marketing concept ignores possible

conflicts between short-run consumer wants &

long-run societal needs.


The Marketing Concept

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The Concepts Contrasted

Figure 1-3 The Selling and Marketing Concepts Contrasted

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– determine the needs, wants & interests of target markets

– deliver desired satisfactions more effectively and

efficiently than competitors

– in a way that maintains or improves the consumer’s

and society’s well-being


The Societal Marketing Concept

• The newest concept, societal marketing, holds

that the organization should…

• It questions marketing concepts in an age of

environmental problems, resource shortages,

rapid population growth, worldwide inflation,

and neglected social services.

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• Societal marketing asks if the firm that serves &

satisfies individual wants is always doing what’s

best for consumers and society in the long run.

• Advocates of societal marketing would like public-

interest groups to guide corporations to decisions

that will benefit society over the long term.

• Societal pressures are already manifested in the

marketing of cigarettes, liquor & fast-food.

– hotels & restaurants have no-smoking sections

– restaurants can face liability for serving excessive alcohol

– fast-food pursues environmentally sound packaging


The Societal Marketing Concept

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• To deliver its value proposition, the firm must first

create a need-satisfying market offering: Product

• It must decide how much it will charge for the offer:

Price, and how it will make the offer available to

target consumers: Place.

• Finally, it must communicate with customers about

the offer & persuade them of its merits: Promotion.

• The firm must these into a comprehensive, integrated

marketing program that communicates and delivers

the intended value to chosen customers.

Preparing an Integrated Marketing Plan

The Four P’s of Marketing: Product, Price, Place, Promotion

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• The first three steps in the marketing process all

lead up to the fourth and most important step, that

of building profitable customer relationships

– a company can adopt any of three value-building tools

to develop stronger customer relationships

• The first relies primarily on adding financial benefits

to the customer relationship.

– airlines offer frequent-flyer programs

– hotels give room upgrades to their frequent guests

– restaurants have frequent-diner programs

.

Building Profitable Customer Relationships

Value-Building Tools - Financial Benefits

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• The second approach is to add social as well as financial benefits, turning customers into clients.

– company personnel work to learn individual customers’ needs and wants

– products and services are individualized & personalized

• The third approach is to add structural ties to the

financial and social benefits.

– airlines developed reservation systems for travel agents

and lounges & limo service for their first-class customers

– Sheraton developed flexible check-in and checkout times

– Hilton provides a personalized welcome message on the

guest’s television


Value-Building Tools - Social Benefits

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• A company should develop relationships selectively,

determining which customers are worth cultivating.

– because you meet their needs more effectively than others


Selective Customer Relationships

– customers who are high on profitability and frequency

deserve management attention.

– those high on profitability but low on frequency can

sometimes be developed in higher frequency customers

Table 1-1 Types of customers.

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• When it comes to relationship marketing you

don’t want a relationship with every customer.

• Guests who are in the low-frequency, low-

profitability quadrant are often bargain hunters.

– they come when there is a promotion and avoid paying

full price at all costs

• It is very difficult to build a relationship with these

price-sensitive customers.



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• Customer relationship management (CRM) may

be the most important concept of modern marketing.

• It involves managing detailed information about

individual customers, carefully managing customer

―touchpoints‖ in order to maximize loyalty.

• A customer touch point is any occasion a customer

encounters the brand & product, in actual experience,

personal/mass communication or casual observation

– for a hotel this includes reservations, check-in & out,

frequent-stay programs, room service, business services,

amenities, restaurants, and bars.

Customer Relationship Management


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• CRM enables companies to provide excellent real-

time customer service through effective use of

individualized information.

– important because a major driver of profitability is

the aggregate value of the company’s customer base

• More recently, CRM has taken on a broader meaning

as an overall process of building and maintaining

profitable customer relationships.

• By delivering superior customer value &

satisfaction, it deals with all aspects of

acquiring, keeping, and growing customers.



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• Companies are building more direct and lasting

relationships with carefully selected customers.

– many companies use profitability analysis to weed out

unprofitable customers and target winning ones

• Once they identify profitable customers, firms can

create attractive offers and special handling to

capture these customers and earn their loyalty.

• CRM has allowed companies to serve chosen

customers in a deeper, more lasting way.


The Changing Nature of Customer Relationships

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• The final step in the marketing process involves

capturing value in return, in the form of current and

future sales, market share, and profits.

• Good CRM creates delighted customers, who remain

loyal and talk favorably to others about the company.

– studies show differences in loyalty of customers who are

less satisfied, somewhat satisfied, and completely satisfied

– a slight drop in satisfaction can create a large loyalty drop

• Companies are realizing that losing a customer

means losing the entire stream of purchases he/she

customer would make over a lifetime of patronage.

Capturing Value from Customers

Customer Loyalty and Retention

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• Benefits of customer loyalty come from continued

patronage, reduced marketing costs, decreased price

sensitivity, and partnership activities.

– loyal customers purchase from the business they

are loyal to more often than nonloyal customers

– they also purchase a broader variety of items.

• Reduced marketing costs are the result of requiring

fewer marketing dollars to maintain a customer than

to create one.

– and the creation of new customers through the positive

word-of-mouth of loyal customers.



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• Lifetime value is the stream of profits a customer

will create in the life of a business relationship

– average life is determined through surveys or guest history



– Ritz-Carlton knows the life-time value of its loyal

customer is over $100,000 over their lifetime.

– a restaurant customer can be worth several thousand dollars’ worth of business

– a travel agency customer can generate over $50,000during his/her lifetime by using the agency

• It measures how much a member of a market

segment produces per year, multiplied by the

average life of a member of that segment.

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• Many markets have settled into maturity, with not

too many new customers entering most categories.

– outstanding companies go all out to retain their customers

• Competition is increasing, and the costs of attracting

new customers are rising.

– it might cost five times as much to attract a new customer

as to keep a current customer happy

• Offensive marketing typically costs more than

defensive marketing

– it takes a great deal of effort and spending to coax

satisfied customers away from competitors



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• Good CRM can help marketers increase their share

of customer—the share they get of the customer’s

purchasing in their product categories.

– banks want to increase ―share of wallet‖

– restaurants want to get more ―share of stomach‖

– airlines want greater ―share of travel‖

• Loyal customers have higher propensity to frequently

purchase a wider variety of a company’s products.

• Marketers train employees to identify possible

products that may create additional value for the

customer that they have not purchased yet.


Growing Share of Customer

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• Customer equity is the discounted lifetime values of

all the company’s current and potential customers

• The best approach to customer retention is to deliver

products that create high satisfaction and perceived

value, resulting in strong customer loyalty.

– the more loyal the firm’s profitable customers, the

higher the firm’s customer equity

• Customer equity may be a better measure of a firm’s

performance than current sales or market share.

– where sales & market share reflect the past, customer

equity suggests the future


Building Customer Equity

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• Rapid changes can quickly make yesterday’s

winning strategies out of date.


Marketing’s Future

– a technology executive stated, ―The pace of change is

so rapid that the ability to change has now become a

competitive advantage.‖

– management thought leader Peter Drucker observed,

―…a company’s winning formula for the last decade

will probably be its undoing in the next decade.”

• The Internet has changed the way we distribute

travel products, but as a market force it is just a

little over ten years old.

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• The importance of CRM has created the need for

those who understand database marketing and the

hospitality industry.

• The worldwide growth of the travel industry has

created a shortage of managers.

– in some regions projects are put on hold because

the developer cannot acquire a management staff

• Marketing, with its customer

orientation has become the

job of everyone, and…


Marketing’s Future

Your passport

to success!

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• Customer equity - is the discounted lifetime values

of all the company’s current and potential customers.

• Customer expectations - are based on past buying

experiences, the opinions of friends, and market

information.

• Customer relationship management (CRM) -

involves managing detailed information about

individual customers and carefully managing

customer ―touch points‖ in order to maximize

customer loyalty.

KEY TERMS

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• Customer touch point - is any occasion on which a

customer encounters the brand and product—from

actual experience to personal or mass communications

to casual observation.

• Customer value - the difference between benefits that

the customer gains from owning and/or using a product

and the costs of obtaining the product.

• Demands - Human wants that are backed by buying

power, want or need. It includes physical objects,

services, persons, places, organizations, and ideas.

KEY TERMS

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• Exchange. The act of obtaining a desired object from

someone by offering something in return.

• Hospitality industry. Made up of those businesses that

offer one or more of the following: accommodation,

prepared food and beverage service, and/or

entertainment.

• Human need. A state of felt deprivation in a person.

• Human want. The form that a human need takes when

shaped by culture and individual personality.

KEY TERMS

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• Lifetime value. The lifetime value of a

customer is the stream of profits a customer will

create over the life of his or her relationship to a

business.

• Market. A set of actual and potential buyers of

a product.

• Marketing. The art and science of finding,

retaining, and growing profitable customers.

KEY TERMS

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• Marketing concept. The marketing management

philosophy that holds that achieving organizational

goals depends on determining the needs and wants of

target markets and delivering desired satisfactions

more effectively and efficiently than competitors.

• Marketing management. The art and science of

choosing target markets and building profitable

relationships with them.

• Marketing manager. A person who is involved in

marketing analysis, planning, implementation, and

control activities.

KEY TERMS

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• Marketing mix. Elements include product,

price, promotion,and distribution. Sometimes

distribution is called place and the marketing

situation facing a company.

• Product. Anything that can be offered to a

market for attention, acquisition, use, or

consumption that might satisfy a need. It

includes physical objects, services, persons,

places, organizations, and ideas.

KEY TERMS

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• Product concept - The idea that consumers

will favor products that offer the most quality,

performance, and features, and therefore the

organization should devote its energy to making

continuous product improvements.

• Production concept - Holds that customers

will favor products that are available and highly

affordable, and therefore management should

focus on production and distribution efficiency.

• Purpose of a business - To create and

maintain satisfied, profitable customers.

KEY TERMS

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• Relationship marketing - Involves creating,

maintaining, and enhancing strong

relationships with customers and other

stakeholders.

• Selling concept - The idea that consumers will

not buy enough of an organization’s products

unless the organization undertakes a large

selling and promotion effort.

KEY TERMS

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KEY TERMS

• Societal marketing concept - The idea that an

organization should determine the needs, wants, and

interests of target markets and deliver the desired

satisfactions more effectively and efficiently than

competitors in a way that maintains or improves

the consumer’s and society’s well-being.

• Transaction - Consists of a trade of values between

two parties; marketing’s unit of measurement.

• Value proposition - The full positioning of brand—the

full mix of benefits upon which it is positioned.

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• Restaurant - Visit two restaurants in the same class,

such as two fast-food restaurants or two casual

restaurants.

– observe the cleanliness of the restaurants, in-house

signage, and other physical features

– order a menu item and observe the service and the

quality of the food

EXPERIENTIAL EXERCISES

Try One !

• Write up your observations, and then state which

restaurant you feel is more customer oriented.

– explain why

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• Hotel - Call the central reservation number of two

hotels. Request information on room availability,

different room types, and price for a date one month

from now. (Note: Do not make a reservation.)

EXPERIENTIAL EXERCISES

Try One !

• Write up your experience, including:

– description of how quickly the phone was answered

– customer orientation of information provided

– friendliness of the employee

• Based on your experiences, which hotels do you feel

had the more customer-oriented reservation system?

– why?

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• One of the support features of this book is a Web site

to assist you: www.prenhall.com/kotler

www.prenhall.com/kotler

Web Site

• The site serves as a portal to a wealth of information

on marketing and travel & hospitality organizations.

• Designed to give real-world examples of how

companies market and provide information on

companies mentioned in the book

• The site also contains a resource guide, where

students can find information about marketing.

– major association sites, job information, and

research information can be found in this section

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INTERNET EXERCISES

Try This !

• Choose three restaurants or hotels listed on the

book’s Web site under Internet Exercise Chapter

1,– or use restaurant/hotel companies you find on the

Internet

• Based on information provided in each Web site:

– describe how each of these companies tries to satisfy

a customer’s want

– how does each of these companies create value for the

customer?

– do they segment the market by offering pages for a

specific market segment?

– select the company you would purchase from and

state why

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END

CHAPTER END

Tourism Marketing Introduction

Documents

Transcript of Tourism Marketing Introduction