Transcript Chapter 10 - Pearson Higher Education

Chapter Ten
Understanding
Competition
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
Macrocompetition
 Any
organization that competes for
a customer’s business
 The maturity stage
 Missed opportunities become
threats
 Marketing threats: Michael Porter’s
Five Forces Model
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
Choosing the Right Competition
 Critical
to a competitive analysis
 Focus on the concept at the expense
of the customer: “conceptitis”
 How do we compete?
– Choose competition you can and want
– Ask customers where else they would
like to patronize and why
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
Competitive Intensity
 How
intensely companies battle each
other
 Factors contributing to competitive
intensity
 Example: the amenities war
 Services can be easily duplicated
 When the market needs are similar,
intensity is greater
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
Competitive Intelligence
Know your
competition
 Measurable
differences:

–
–
–
–
–
REVPAR
Yield index
REVPOR
REVPAC
Internet REVPAR
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition

Measurable
differences (cont.):
–
–
–
–
Purchased data
RSQFT
REVPAS
Customer
satisfaction index
(CSI)
– Perceptual mapping
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
Example of Market Share
Hotel
Actual
Rooms
Rooms
Sold
Occupancy
%
Fair
Share %
Actual
Share %
Upper-Tier Hotels
A
300
220
73.3
11.5
15.5
B
500
350
70.0
19.2
24.7
C
1200
500
41.7
46.2
35.2
Yours
600
350
58.3
23.1
24.7
Total
2600
1420
54.6
100.0
100.0
E
275
220
80.0
31.3
39.6
F
425
360
84.7
48.3
50.0
G
180
140
77.8
20.4
19.4
Total
880
720
81.8
100.0
100.0
Middle-Tier Hotels
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
Example of REVPAR
Hotel
Actual
Rooms
Rooms
Sold
Occupancy
%
Average
Daily Rate
(ADR)
Revenue
REVPAR
Yield
Index
Upper-Tier
Hotels
A
300
220
73.3
$120
$26,400
$88.00
1.17
B
500
350
70.0
130
45,500
91.00
1.21
C
1200
500
41.7
150
75,000
62.50
0.83
Yours
600
350
58.3
140
49,000
81.67
1.08
Total
2600
1420
54.6
137.96
195,900
75.35
1.00
Middle-Tier
Hotels
E
275
220
80.0
$110
$24,200
$88.00
1.06
F
425
360
84.7
100
36,000
84.70
1.02
G
180
140
77.8
90
12,600
70.00
0.85
Total
880
720
81.8
101.11
72,800
82.70
1.00
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
Calculation of Competitive Index
Importance
Brand A
Rating
Brand B
Score
Rating
Score
Column
A
B
C
D
E
Feature
Scale: 1-10
Scale: 1-10
Ax B
Scale: 1-10
Ax D
It is a place friends like to
go
7.30
7.60
55.48
6.40
46.72
Atmosphere is very
pleasant
8.80
7.70
67.76
7.60
66.88
One place seems to have
better odds
7.40
6.80
50.32
6.00
44.40
Slot machines filled in a
timely manner
7.50
6.80
51.00
6.80
51.00
Types of promotions
offered
7.40
7.70
56.98
6.80
50.32
TOTAL
384.00
INDEX
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
281.54
259.32
73.32
(281.54/384
x 100)
67.53
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
Competitive Intelligence
 Types:
–Defensive
–Passive
–Offensive
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition

Objectives:
– Understand positional
advantage or
disadvantage
– Understand strategy or
tactics of competitors
– Create strategies that
will lead to a
competitive advantage
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
Competitive Intelligence (cont.)

Step-by-step procedure
1.
2.
3.
4.
Setting up the process
Collecting the raw data
Evaluate and analyze the data
Draw conclusions and use the data
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
Competitive Analysis
 Barriers:
–Size of a
targeted
market
–Cost
differentials
(i.e.,
advertising)
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition

Sustainable
competitive
advantage:
– Customers perceive a
consistent difference
– Differences are a result of
better capability
– Differences and capability
endure over time
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
Competitive Marketing
 Positioning
– Develop strengths that align with
competitors’ weaknesses
– Take the offense to disrupt the balance
– Anticipate shifts in the industry to
exploit change
– Obtain a position that is less vulnerable
to attack
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
Finding Marketing Opportunities
 Identify
and quantify customer
problems
 Simple and easily understood by
customer
 Know your market, customers, and
their problems
 Ask: Will it create/keep a customer?
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
Feasibility Studies
 Quantitative
research strength of
an opportunity
 Evaluate marketing opportunities
 Focus on proposed financial
performance
 Depends on the behavior of
customers
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.