Transcript Marketing in Changing World

Chapter 1
Introduction: Marketing
for Hospitality and
Tourism
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2002 Pearson Education, Inc.
Upper Saddle River, NJ 07458
1
The Purpose of a
Business Is to Create
and Retain the Right
Customer
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2002 Pearson Education, Inc.
Upper Saddle River, NJ 07458
2
The Four Ps
Marketing
Mix
Place
Product
(Distribution)
Price
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
Promotion
©2002 Pearson Education, Inc.
Upper Saddle River, NJ 07458
3
The Promotional Mix
Advertising
 Sales promotion
 Packaging
 Personal selling
 Public relations

Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2002 Pearson Education, Inc.
Upper Saddle River, NJ 07458
4
Defining Marketing
Marketing is a societal process by
which individuals and groups obtain
what they need and want through
creating, offering, and exchanging
products and value with others.
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2002 Pearson Education, Inc.
Upper Saddle River, NJ 07458
5
Core Marketing Concepts
Needs, wants,
and demands
Markets
Exchange,
transactions,
and relationships
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
Products
Value,
satisfaction,
and quality
©2002 Pearson Education, Inc.
Upper Saddle River, NJ 07458
6
Need, Wants, demands
• Need. A human need is a state of felt
deprivation. Examples include the need for
food, clothing, warmth and safety.
• Wants. Wants are how people communicate
their needs. A hungry person may want a
hamburger, noodles, or cheese and bread.
• Demands. When backed by buying power,
wants become demands.
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2002 Pearson Education, Inc.
Upper Saddle River, NJ 07458
7
Product
A product is anything that can be offered to satisfy a
need or a want.
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2002 Pearson Education, Inc.
Upper Saddle River, NJ 07458
8
Value, Satisfaction, and
Quality
• Customer value is the difference between the
benefits that the customer gains from owning
and/or using a product and the costs of
obtaining the product.
• Customer satisfaction depends on a product’s
perceived performance in delivering value
relative to a buyer’s expectations.
• Quality begins with customer needs and ends
with customer satisfaction.
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2002 Pearson Education, Inc.
Upper Saddle River, NJ 07458
9
Satisfaction and Customer Behavior
70
63 65
60
Percent
50
40
Definitely Recommend
30
30
Definitely Return
25
20
10
8
10
0
1
2
3
1 = Very Satisfied, 7=Very Dissatisfied
* Even though 3 is still a "positive"
score on the above 7 point scale, few
customers giving that rating will return
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2002 Pearson Education, Inc.
Upper Saddle River, NJ 07458
10
Why Satisfaction May Not Lead
To Customer Loyalty
• Some customers never return to an area –
but they can still recommend
• Some customers shop for the best price differentiate your product
• Some customers like to have different
purchase experiences – like to stay or dine
at different places
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2002 Pearson Education, Inc.
Upper Saddle River, NJ 07458
11
Why Managers Should Be Concerned
About Customer Loyalty
• Customer loyalty leads to increased
profit
• Customer loyalty leads to increased
partnership
• Lower marketing and sales costs
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2002 Pearson Education, Inc.
Upper Saddle River, NJ 07458
12
Exchange, Transactions, and
Relationships
• 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 builds relationships
with valued customers, distributors, dealers,
and suppliers by promising and consistently
delivering high-quality products, good service,
and fair prices.
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2002 Pearson Education, Inc.
Upper Saddle River, NJ 07458
13
Importance of Customer
Retention
5%
increase adds 25 - 125% to bottom
line
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2002 Pearson Education, Inc.
Upper Saddle River, NJ 07458
14
The Life Time Value of the
Customer
Revenue and profits by average
customer over a lifetime by segment
 Increase average purchase, frequency
of visit, life

Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2002 Pearson Education, Inc.
Upper Saddle River, NJ 07458
15
Example
Corporate business traveler - 4x a year,
2 nights per visit, $200 per visit = $800
a year
 Average life is 4 years
 4 yrs x $800 = $3200 lifetime value

Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2002 Pearson Education, Inc.
Upper Saddle River, NJ 07458
16
Markets
A market is a set of actual and potential buyers
who might transact with a seller.
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2002 Pearson Education, Inc.
Upper Saddle River, NJ 07458
17
Marketing and Sales Concepts
Contrasted
Starting
Point
Focus
Factory
Existing
Products
Means
Ends
Profits
through
Volume
Selling
and
Promoting
The Selling Concept
Market
Customer
Needs
Integrated
Marketing
Profits
through
Satisfaction
The Marketing Concept
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2002 Pearson Education, Inc.
Upper Saddle River, NJ 07458
18
Marketing Management
Philosophies
Production Concept
•Consumers favor products that are
available and highly affordable.
•Improve production and distribution.
Product Concept
•Consumers favor products that offer
the most quality, performance, and
innovative features.
Selling Concept
•Consumers will buy products only if
the company promotes/ sells these
products.
Marketing Concept
Societal Marketing Concept
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
•Focuses on needs/ wants of target
markets & delivering satisfaction
better than competitors.
•Focuses on needs/ wants of target
Pearson Education, Inc.
markets &©2002
delivering
superior value.
Upper Saddle River, NJ 07458
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Marketing’s Future
• “It (marketing) encompasses the entire
business. It is the whole business seen
from the point of view of the final result,
that is, from the customer’s point of
view.”
• Peter Drucker
• Marketing has become the job of
everyone.
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2002 Pearson Education, Inc.
Upper Saddle River, NJ 07458
20