Transcript Chapter Three

Chapter Three
The Marketing Mix and the
Product Life Cycle
Original Marketing Mix: The
Four Ps
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Price, product, promotion and
placement
Professor Neil Borden of Harvard
Developed for the marketing of goods
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Foundations and Practices by Shoemaker & Shaw
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Hospitality Marketing Mix:
The Seven Ps
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Product/service mix: the combination of
products aimed at the needs of the target
market
Presentation mix: all elements used by
the firm to increase the tangibility of the
product/service mix
Pricing mix: the combination of prices that
customers pay for products or services
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Foundations and Practices by Shoemaker & Shaw
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© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Hospitality Marketing Mix:
The Seven Ps
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Communications mix: all communications between
the firm and target market that increase the
tangibility of the product or service
Distribution (placement) mix: all channels
between the firm and target market that increase
the probability of getting the customer to the
product
People mix: people that work for an organization
and how they affect service delivery
Process mix: activities designed to deliver the
desired services to the guest
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Foundations and Practices by Shoemaker & Shaw
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The 13 Cs
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Customer
Categories of
offerings
Capabilities of the
firm
Cost, profitability and
value
Control of process
Collaboration within
the firm
Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
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Customization
Communications
Customer
measurement
Customer care
Chain of relationships
Capacity control
Competition
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Hospitality Product/Service Mix
Designing the hospitality product
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Begins with what the customer wants
Bundle purchase concept
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Consumers buy a hospitality product as
a whole, not the individual elements
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Foundations and Practices by Shoemaker & Shaw
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© 2008 Pearson Education, Upper Saddle River, NJ 07458.
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Hospitality Product/Service Mix
Formal product
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What the customer thinks they are buying
Core product
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What the customer is really buying
Augmented product
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The total of all benefits received by the
customer
Should solve even the problems the customer
did not recognize
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Foundations and Practices by Shoemaker & Shaw
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© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
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© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Complexity of the
Product/Service Mix
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Many consumers with many different
problems
Some characteristics of products are
taken for granted as a minimum
Product should not cause more
problems
Customers look for unique services
and experiences
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Foundations and Practices by Shoemaker & Shaw
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© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Complexity of the
Product/Service Mix
Standardization of
products
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Reduce variation by
standardizing
employee functions
Closes gap four by
delivering what has
been promised
Can be restrictive and
some standard
products can be
somewhat
customized
Standard products with
modifications
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Customized products
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Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
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Between the standard product
and customized product
Allows changes with the
market
Differentiation while
maintaining strategic position
Products designed to fit the
specific needs of a market
Can be price sensitive
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
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© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Making the Product Decision
Making the Product Decision
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Should we standardize or customize?
What is our target market? Will they want this?
Can they pay for it?
Do we have the capabilities?
Will this enhance the customer experience?
Remember that the customer is always changing
Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
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© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Product Life Cycle
A product goes through several stages
throughout its lifetime
Nature of product life cycles
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Can be short or long
Can be concave or “S” shaped
A product can be different stages in different parts
of the world
A product can adapt and remain in the “mature”
stage
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© 2008 Pearson Education, Upper Saddle River, NJ 07458.
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Exhibit 3-7; The Product Life Cycle
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Product Life Cycle
Introductory stage
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Entry into the
marketplace
High cost, low
profit
Awareness and
customer trial
Growth stage
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Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
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Sales growth
New and return
customers
Relationship
marketing
Product
refinement
Strengthen and
streamline
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
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Product Life Cycle
Mature stage
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Can be short or long
Leveling off or slowing
of sales
Good repeat business
Time for refurbishing
Be on the offensive
and preempt the
competition
Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
Decline stage
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The end is near
Death spiral
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Spiral of cutting
costs, less business
and more cutting
costs
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
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Exhibit 3-9; The Product Death Spiral
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© 2008 Pearson Education, Upper Saddle River, NJ 07458.
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Developing New Products and
Services
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Starts with customers’ needs and
wants
Numerous factors associated with
successful new products
Should be a total company effort
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Foundations and Practices by Shoemaker & Shaw
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© 2008 Pearson Education, Upper Saddle River, NJ 07458.
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Class Discussion
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Discuss your favorite products and
hypothesize where they are in the
product life cycle.
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Foundations and Practices by Shoemaker & Shaw
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© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.