© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Chapter Three The Marketing Mix and the Product/Service Mix

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Evolution of Marketing  4 Ps Traditional marketing  7 Ps Adds the service component of marketing  13 CsIncorporates the focus on customer loyalty

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition 4 Ps of Marketing  Product  Price  Place (distribution)  Promotion

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition 7 Ps of Marketing  Product  Price  Place  Promotion  Process  Physical attributes  People

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Thirteen Cs of Marketing  Customer  Categories of offerings  Capabilities of firm  Cost, profitability, and value  Control of process  Collaboration within firm  Customization  Communications  Customer measurement  Customer care  Chain of relationships  Capacity control  Competition

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition The Hospitality Marketing Mix  Another way of examining the marketing mix  Framework developed by Renaghan –Product/service mix –Presentation mix –Communications mix  Framework developed by Borden –Price –Distribution

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Designing the Hospitality Product  Begins with the wants of the customer  The bundle purchase concept: all individual elements of the bundle are important to the product as a whole –The formal product –The core product –The augmented product

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition The Complexity of the Product/Service Mix  Standard products –Cost benefits –Lose customers who want customization  Standard products with modifications –Easy to adapt as market changes  Customized products –Designed to the target market

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Making the Product Decision  Step 1: Identify the target market  Step 2: Define your business goals  Step 3: Assess capabilities

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Key Points  Analyzing the hospitality product/service –What is it in terms of what it does for the customer? –How does it solve problems? –What benefits does it offer? –How does it satisfy demand?

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Key Points (cont.)  Analyzing the hospitality product/service –Who uses it? Why? How? –How does it compete? –What are the occasions for its use? –What are its attributes? –What is the perception of it? –How is it positioned? –Which attributes are salient? Determinant? Important?

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition The Product Life Cycle Introduction Growth MaturityDecline Time Sales

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition The Product Life Cycle (cont.)  The Introductory/Embryonic Stage –Entry into the marketplace –The thirteen Cs: Focus on customer, category of offering, control of the process, communication, and capabilities of the firm –High-cost and low-profit –Produce to meet demand –The customer must be persuaded….

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition The Product Life Cycle (cont.)  The Growth Stage –Customers are “early adopters” –Satisfy the customer –Can be slow or rapid growth –Refine product –Price appropriately

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition The Product Life Cycle (cont.)  The Mature Stage –Positioning established –Market is steady and loyal –The thirteen Cs: examine category of offerings, communication –Refurbish physical elements –Sales growth slows

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition The Product Life Cycle (cont.)  The Decline Stage –Faster than the growth stage –Reduces costs –The thirteen Cs: Communicate –Failure due to loss of focus, slip in quality or unawareness of need to change –The “death spiral”

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition How to Determine Where You Are in the Product Life Cycle  Study past performance –Sales growth, market share progression –Alterations or enhancements made to product –Sales and profit history of similar related, complementary, or comparable products

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition How to Determine Where You Are in the Product Life Cycle (cont.)  Study past performance –Customer feedback –Repeat and new business –New competition and new concept introductions –Number of competitors and S&W –Critical factors for success –Customer

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition