Chapter 1 Introduction Marketing for Hospitality and Tourism

“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 ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

Course Overview 1. Understand the hospitality and tourism marketing process 2. Recognize developing hospitality and tourism marketing strategies Understand how to develop the hospitality and tourism marketing mix Comprehend managing hospitality and tourism marketing ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

Chapter Objectives 1. Understand the relationships between the world’s hospitality and travel industry 2. Define the role of marketing and discuss its core concepts 3. Explain the relationship between customer value satisfaction and quality ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

Chapter Objectives 4. Discuss how marketing managers go about developing profitable customer relationships 5. Understand how the marketing concept calls for a customer orientation ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

The Travel Industry The travel industry is the world’s largest One billion international travelers by 2010 Over $1.5 trillion in receipts by 2010 Explosive growth in the past 30 years (Dubai, Cancun, and other destinations) ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

Customer Orientation The purpose of business is to create and maintain satisfied, profitable customers Put the customer first and reward employees for serving customers well ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

Customer Orientation Without customers assets have little value Why does Michael Leven, CEO of US Franchise Systems, say its important for businesses to have a customer orientation approach? ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

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 ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

Marketing Manager A person involved in marketing analysis, planning, implementation, and control activities ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

Core Marketing Concepts ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

Needs, Wants, and Demands A human need is a state of felt deprivation Wants are how people communicate their needs When backed by buying power, wants become demands ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

Product A product is anything that can be offered to satisfy a need or a want What are some travel and tourism “products” that you can list? ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

Value, Satisfaction, and Quality Customer value is the difference between the customer benefits from owning and/or using a product and the costs of obtaining the product Customer satisfaction is perceived value delivered relative to a buyer’s expectations Quality is the totality of features and characteristics of a product or service that bear on its ability to satisfy customer needs ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

Exchange, Transactions, and Relationship Marketing Exchange is the act of obtaining a desired object from someone by offering something in return A transaction is marketing’s unit of measurement and consists of a trade of values between two parties Relationship marketing is building strong economic relationships between with social ties by following through on promises ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

Markets A market is a set of actual and potential buyers who might transact with a seller ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

Marketing Management Marketing management is the analysis, planning, implementation, and control of programs designed to create, build, and maintain beneficial exchanges with target buyers for the purpose of achieving organizational objectives ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

Marketing Management Philosophies Manufacturing Product Selling Marketing Societal Marketing ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

Manufacturing Concept Consumers favor available and highly affordable products Management should improve production and distribution systems However, don’t forget the customer! ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

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! ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

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 ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

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” ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

Marketing and Sales Concepts Contrasted ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

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 ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

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 ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

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 ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

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” ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

Best Practices Accor and L’esprit Accor concept Ritz Carlton delivering “memorable experiences” McDonald’s QSC&V principle “DC Briefcase Incident” ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

Key Terms Create and maintain customers Demands Exchange Hospitality Industry ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

Key Terms Human need Human want Manufacturing Concept Market ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

Key Terms Marketing Marketing Concept Marketing Management Marketing Manger ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

Key Terms Product Product Concept Quality Relationship Marketing ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

Key Terms Selling Concept Societal Marketing Concept Transaction ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens