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Chapter 1 Introduction to hospitality marketing What is marketing? Definitions Hierarchy of customer value Marketing concept Management orientations Environmental influences macro micro Special characteristics of services marketing Hospitality marketing mix Many different definitions of marketing business philosophy to create and retain satisfied customers exchange process – short term transactional marketing relationship marketing – development of mutually beneficial long-term relationships between suppliers and customers creating memorable experiences Figure 1.1 The hierarchy of customer value Marketing is: a business philosophy with the customer at the centre of a hospitality organization’s purpose an exchange activity between hospitality organizations and their customers a management process that focuses on planning for the future success of the organization a set of marketing tools, which marketers use to understand customers’ needs and wants and to develop products, and services to satisfy or delight customers The central purpose of marketing is to manage demand Product or service orientation Operations or production orientation Selling orientation Marketing orientation Societal marketing orientation Figure 1.2 Marketing orientations Figure 1.3 Macro- and micro-environmental influences on hospitality organizations The macro-environment Political Economic Socio-cultural Technological Environmental Interaction of PESTE factors Hospitality companies have limited control over PESTE influences; but major changes in even one PESTE factor can significantly impact on the business, either for better or worse PESTE factors are constantly changing Growth: occupancy and room rates increase in response to growing demand Peak: occupancy and room rates remain strong, funds still available for investment; growth tends to slow Decline: occupancy begins to decrease Trough: there is a large imbalance of supply and demand during a recession; hospitality businesses fail Resurgence: there is a gradual resurgence, and the cycle starts all over again Figure 1.4 Typical hotel industry cycle Internal company factors customers employees suppliers intermediaries External factors direct competitors various publics Hospitality companies have more influence over the microenvironment than over the macroenvironment Seasonality Intangibility Perishability Inseparability Variability Interdependence Supply Exceeding demand High fixed costs The term marketing mix is used to describe the tools that the marketer uses to influence demand The marketing mix is a core concept in marketing The hospitality marketing mix adopted in this text is based on the eight marketing activities: Figure 1.5 The hospitality marketing mix People who work in marketing work in: online and offline advertising, sales promotion and publicity sales, sales promotion, print and publicity, direct mail, advertising public relations and customer relations marketing research online sales and marketing roles such as guest user interface (GUI) management, web product development, website sales, search engine optimization database management, daily web operations and content management Albrecht, K. (1992). The Only Thing That Matters. Harper Business Books. American Marketing Association. (October 2007). http://www.marketingpower. com/aboutama/pages/definitionofmarketing.aspx. Brown, S. (2001). Marketing: The Retro Revolution. Sage. Carlzon, J. (1987). Moments of Truth. Ballinger Publishing. Chartered Institute of Marketing. (2007). Shape the Agenda: Tomorrow’s Word, Re-evaluating the Role of Marketing, October 2007. Grönroos, C. (1994). ‘From marketing mix to relationship marketing: towards a paradigm shift in marketing’. Management Decision, 32, pp. 4–20. http://www.fairmount.com. Kotler, P. (1999). Kotler on Marketing. Simon and Schuster. Kotler, P. (2003). Marketing Management. Prentice Hall. Kotler, P. and Armstrong, G. (2010). Principles of Marketing. Pearson Education. Kotler, P., Bowen, J. and Makens, J. (2009). Marketing for Hospitality and Tourism (5th ed.). Prentice Hall. Levitt, T. (1960). ‘Marketing myopia’. Harvard Business Review, 38, pp. 45–56. Pine, J. and Gilmore, J. H. (1999). The Experience Economy. Harvard Business School Press.