Marketing for Hospitality and Tourism

Автор: Пользователь скрыл имя, 30 Апреля 2012 в 07:22, реферат

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What is hospitality and tourism marketing? In the hotel industry, marketing and sales are often thought to be the same and no wonder: the sales department is one of the most visible in the hotel. Sales managers provide clients with tours and entertain them in the hotel’s food and beverage outlets. Thus the sales function is highly visible.

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     By 2030 more than 1/3 part world`s human beings will not have enough water to drink. Renewable resources such as forests and food can be restored but not non renewable resources-oil, coal, various minerals. The Indian Ocean has risen 25 in the last twenty years and it could cover some of the Maldives by the end of the century.    

     Trend- the government of different countries varies in concern and efforts to promote a clean environment such as German government. Many poorer nations do little about pollution, largely because they lack the needed funds or political will.  

     Technological environment: Scientists are now speculating on products for the future: flying cars, personal voyages to space – include a stay at a space hotel. Robots are used to deliver hospital food trays to rooms. Machines cook automatically, electronic booking –checking in and out system, locking system.       Political environment –is made up of laws, governmental agencies.       There are 3 reasons that effect legislation and regulation

  1. It protects companies from each other most businesses praise competition. The department should be responsible for preventing unfair completion deception pricing, deception advertising.
  2. Aims to protect consumers from unfair business practices- the products can be unsafe, can quality deceive through packaging and pricing.
  3. Discourage- smoking, littering, polluting, over congestion.

     MADD- demands (Mothers against Drunk Driving) MADD has had a major impact on the hospitability industry by demanding that restaurants to be more responsible in their serving alcohol.       PETA- people for the Ethical treatment of animals -they would like to see all the restaurants that serve meat closed and has campaigned against McDonalds, Wendy, and Burger.         Cultural environment: People in a society have different beliefs and values for example, hoteliers in israel-understand the rules of kashruth-keeping kosher.  Hotel in israile must have two kitchen setups, one for meat and one for dairy products.  In Chine, Hong Kong, Singapore, Japan and Korea feng shui means wind and water. It means the building should face water and mountain.

  1. Designing and managing products and services
 

     What`s a product?: A product is anything that can be offered to a market for attention, acquisition or consumption that might satisfy a want or need. It includes physical objects, services, places, organizations and ideas.

                                                                                                

                                                                                                                     
 
 
 
 

     Core products: it answers the question what is the buyer really buying?     Facilitating products are services or goods that must be present for the guest to use the core product. A first class corporate hotel must have check-in and check-out services, telephones, a restaurant and valet service, for instance. In an economy hotel, facilitating services might be no more than check-in and checkout service. One of the most important aspect of facilitating products` is accessibility. Resorts often close the office and request desk in the evenings. They make arrangements for late- arriving guest to pick up keys. A business hotel could never close the front desk. Guests expect it to be accessible, when guests want to use it.             Supporting products: Supporting products are extra products –add value to the core product. In a corporate hotel, business center or full-service health spa are supporting products that exist to help to retain customers. Supporting product can be facilitating products for another market segment. For example although families may not require restaurant and valet service when staying at a hotel business traveler depend on them.          A supporting product offered in Ritz-Carlton Hotels is the technology butler. This is a person who provides “on the road office support”. The technology butler  helps sort out   problems with printers, scanners, laptops.  Jogging has become a popular means of exercise. Hotels are offering jogging maps as well as bottles of water in the lobby for joggers. The Swiss hotel provides cold bottles of water as well as note thanking the guest for staying at the hotel.      Augmented products include accessibility, atmosphere, customer interaction with the service organizations, customers’ participations, and customer interaction with each other.         Augmented products are an important concept because hospitality and travel services require customer coproduction of the service. For most hospitality products the customer comes to the service delivery system and has to interact with delivery system. For example guests have to check in at the front desk, get to the room, understand how to use TV and telephone system.

     Accessibility: If a product is not accessible it has no value. Two barrier to accessibility are hours of operation and lack of knowledge. A hotel health club or a swimming pool that opens at 7 A.M. does not help the business person who wants to work out at 6 A.M., eat breakfast, and get to an 8 A.M. business appointment. A restaurant that opens at 7 A.M. becomes an irritant to a guest that has to leave at 6 A.M. for the airport.          Atmosphere: the physical environment: Atmosphere can be the customer`s reason for choosing to do business with an establishment. Burgundy`s restaurant lacked street appeal and went out of business. The restaurant was located in shop center with glass panel exterior and wall. Perhaps they felt their food quality and service would attract customers. People who saw Burgundy didn`t come into restaurant. Conversely T.G.I. Friday`s has used atmosphere effectively. they had brightly painted buildings with red and white and friendly atmosphere. The main sensory channels for atmosphere are sight, sound, scent and touch.

  • Visual-color, size, brightness, shape
  • Aural-volume
  • Olfactory- scents and freshness
  • Tactile-softness, smoothness, temperature
 

     Environment can be a mood-creating medium. High load environment creates a playful, adventurous mood, whereas low –load environment create a relaxing mood. Front desk of the Flamingo Hilton is adjacent to the hotel`s casino. While waiting to check-in, guests hear the sound of casino, watch the players and fell excitement. In contrast, business travelers who often wish to relax in a homelike setting after a busy-day tend to prefer low-load environment.     Customer Interaction with Service delivery system: the customer participates in the delivery of most hospitality and travel products. There are three phases to this involvement: joining, consumption and detachment. In the joining stage, the customer makes the initial inquiry contract. When designing products we must make it easy for people to learn about the new product. The Inter Continental Hotel of Jakarta selling sample plates of selected native foods. This innovation created excitement enhanced the atmosphere. Well-trained and knowledgeable employees can greatly assist customers in the joining stage.    The consumption phase takes place when the service is consumed. In restaurant it occurs when the customer is dining. Designers of hospitality products must understand how guests will interact with the product. A business hotel near a large amusement park developed a package for the summer family market. The package proved to be so popular that some of the hotel`s main market, business travelers, were driven away. The noise of the children in the hallways and the lobby changed the atmosphere. Gone was the comfortable atmosphere desired by the business travelers.      

     Detachment phase is when the customer is through using a product and departs. Guests who leave the hotel want to know road conditions and hotels feel pride to give them information at the final stages about the road. For example some hotels purchase and resell airport departure tax stamp. The guest does not have to wait in line at the airport. The hotel does not receive income from reselling departure stamps, the guest leaves with a good impression.     Customers interact with other customers-interaction of customers with each other. An airline flight on Friday afternoon from Dallas to Houston was sold out with a number of people on standby. They were workers returning home from their job. The airline’s ground crew put construction workers in an first-class seat. The passenger paying a premium to sit in first class did not appreciate a worker in dirty construction clothes in the next seat. The problem arises when guests represent a different culture; speak foreign language, from different age.          Customers as employees: Customers often help hospitability organization to sell products. Involving the guest as an employee can increase capacity, improve customer satisfaction, and reduce costs.

     New product development: A company has to be good at developing new products. It has to be good at managing in the face of changing tastes, technologies, competition. Every product seems to go through a life cycle. It is born, passes through several phases and dies. The product life cycle presents two major challenges. First, because all products decline, a firm must find new product, to replace new ones. Second, the firm must understand how its product age and then change marketing strategies as products pass through life-cycle stages.

     Product life –cycle is marked by five distinct stages:

  1. Product development begins when the company finds and develops a new product idea. During product development, sales are zero, the company’s investment costs add up.
  2. Introduction is a period of slow sales growth as the product is being introduced into the market. Profits are non-existent.
  3. Growth is a period of rapid market acceptance and increasing profits.
  4. Maturity is a period of slowdown in sales growth because the product has achieved acceptance by most of its potential buyers. Profits level off or decline because of increased marketing outlays to defend the product against competition.
  5. Decline is the period when sales fall off quickly and profits drop.
  6. Pricing the offer
 

     Price: Price is the only marketing mix element that produces revenue. Price is the amount of money charged for a good or service.

     You pay rent for your apartment, tuition for your education and a fee for dentist. Airlines, railways, taxes and bus companies charge you a fare. A hotel charges you a room rate. The bank charges interest for using their money. Marketers and managers must have an understanding of price. Charging too little can leave a company without enough revenue to maintain the operation properly. Equipment wears out, carpets get stained, and painted surfaces need to be repainted.

     Factors to consider when setting prices: Internal and external company factors affect a company’s pricing decision.

     Internal factors:

  • Marketing objectives
  • Marketing – mix strategy
  • Costs
  • Organization for pricing
 

    External factors:

  • Nature of the market and demand
  • Competition
  • Other environmental factors (economy, resellers, government).
 

    Internal factors affecting pricing decision:

     Marketing objectives: Before establishing price, a company must select a product strategy. If the company has selected a largest market and positioned itself carefully, it’s marketing mix strategy. For example, Four Seasons positions its hotels as luxury hotels and charges a room rate that is higher than most. Motel 6 have positioned themselves as limited – service motels, providing rooms for budget – minded travelers. This market position requires charging a low price.

     The clearer a firm is about its objectives, the easier it is to set price. Examples of common objectives are survival, short – run profit maximization, market – share maximization and product –  quality leadership.

     Survival: During a recession a 300-room hotel still has 300 rooms to sell each night, although the demand has dropped to 140 a night. The hotel tries to ride out the slump in the best way possible by cutting rates and trying to create the best cash flow possible under the conditions.

     Observers of the hospitality industry have sometimes suggested that competition using a survival pricing strategy should be monitored carefully. If the hotel is one of two in a market such as a small town, the effect of price discounting could be considerable. In contrast, if the hotel is in Orlando, Florida may want to use their marketing skills to gain customers rather than cut their price.

     Current profit maximization: Many companies want to set a price that will maximize current profits. The companies choose the price that will produce the maximum current profit, cash flow, or return on investment.

     Market-share leadership: Other companies want to obtain a dominant market-share position. They believe that a company with the largest market share will enjoy low costs and high long-run profit. Marriot strives to be the market-share leader in its class. When it opens a new hotel, Marriot builds market share as quickly as possible. Marriot opened its resort on Australia’s Gold Coast with 99$ rates; six month later the hotel charged almost twice this rate.

     Product-quality leadership: The Ritz-Carlton chain has a construction or acquisition cost per room that often exceeds 500,000$. Besides a high capital investment per room, luxury chains have a high cost of labor per room, well-qualified staff and a high employee-to-guest to provide luxury service. They must charge a high price for their luxury hotel rooms’ product.

     A bowl of chili and a beverage does not exceed 10$ in most restaurants, but the Red Sage Restaurant in Washington-charges twice that amount for its southwestern cuisine. The restaurant spent 5$ million to recreate the wide-open spaces of the West. More than a hundred craftspeople and artists were employed to create original designs.

     Fast-food restaurants may reduce prices temporarily to create excitement for a new product or draw customers into a restaurant.

     Let’s take two upscale restaurants Mickey Mantle’s. Mickey Mantle’s restaurant purposely established a high price for alcoholic beverages. A beer here isn’t cheap. We charge more than other bars to keep out the kids.

     An opposite pricing strategy is employed at Rusty Staub’s Restaurants pricing philosophy for wine is unique for the industry. He believes that “the better the wine is markup”. A lot of people in the industry say that you should charge at least three times the cost of the wine. I want people to know we are one of the great-value restaurants.

     Marketing mix strategy: Price must be coordinated with product design, distribution and promotion. Resorts that plan to distribute most of their rooms through wholesalers must build enough margins into their room price to allow them to offer a deep discount to the wholesaler. Owners usually refurbish their hotels every five to seven years to keep them in good condition. Prices must cover the costs of future renovations.

     A restaurant catering gets less money than a neighborhood restaurant and must advertise in city guides. Managers of restaurants who do not consider promotional costs when setting prices experience revenue/cost problems.

     Costs: Costs set the floor for the price a company can charge for its product. A company wants to charge a price that covers its costs for producing, distributing and promotion. Many companies work hard to become low-cost producers. Effective low-cost producers achieve cost saving through efficiency rather than cutting quality.

     Costs take two forms: fixed and variable.

     Fixed costs are costs that do not vary with production or sales level. A company must pay bills each month for rent, interest and executive salaries. Fixed costs are not directly related to production level. Variable costs vary directly with the level of production.

     External factors affecting pricing decision:

     Market and demand: before setting prices, a marketer must understand the relationship between price and demand for a product.

     Rudy’s was one of finest restaurants in Houston’s boom, but later Houston moved into recession. The demand for fine dining fell and Rudy’s suffered.

     Business dropped at Rudy’s because people could no longer afford their prices. Another restaurant in Houston, La Colombe d’Or, adapted its pricing tactics for fit the recession.

     Cross-selling and upselling: The owner of La Colombe d’Or used cross-selling, one of the basics of effective revenue management. A hotel can cross-sell food and beverage, exercise room service and executive support services such as a fax and even a retail products from chocolates to terry-cloth bathrobes.

     Upselling involves training sales and reservations employees to continuously offer a higher-priced product, rather than settling for the lowest price. The common practice of offering after-dinner coffee can be turned into an upselling opportunity by offering high-image upgraded presentation of tea rather than the standard pot of coffee.

     Consumer perceptions of price and value: It is the consumer who decides whether a product’s price is right. When setting prices, management must consider how consumers perceive price and the ways that these perceptions affect consumers’ buying decisions.

     We can’t see the value of our product. We can only set price. The market value is set by our customers and our ability to sell to it.

     Effective pricing requires a creative awareness of the target market, why they buy and how they make their own buying decisions. For example, the same hamburger might cost 4$ at McDonald’s, 9$ at Chili’s and 15$ in an exclusive city club.

     The product concept usually contains a price range that the market is willing to pay.

     Consumers tend to look at the final price and then decide whether they received a good value. For example, two people dining in a restaurant receive their bill and see that it is 80$. The diners then decide whether they were satisfied during the post purchase evaluation. Rather than going over each item in the menu individually and judging its value, they judge the entire dining experience against the cost of that experience. If restaurant offers a good value on food but a poor value on wine - charging 9$ a glass for house wine, for instance – a couple who consumes six glasses of wine may feel the check total is too high when 54$ for wine is added to the bill. 

  1.   Distributing the offer
 

     Nature and importance of distribution systems: Distribution systems provide a steady flow of customers. Many hospitality companies are making greater use of the marketing channels available to them. Ritz-Carlton receives a significant share of business from travel agents because of aggressive development of this channel. In today`s competitive environment, it is not enough to count on a central reservation system and your own sales forces. Companies must develop increasingly complex distribution networks.             Competition, a global marketplace, electronic distribution techniques and a perishable product have increased the importance of distribution. Innovative ways of approaching new and existing markets are needed. Globalization has meant that many hotel companies must choose foreign partners to help them market or distribute their products. Sheraton built an alliance with the Welcome Group in India, which manages Sheraton hotels on the Indian subcontinent. New electronic distribution methods have resulted in the growth of international reservation systems such as Utell. Finally the importance of distribution has increased because hospitality products are perishable.

     Nature of Distribution channels: Development of a distribution system starts with the selection of channel members. In marketing, distribution systems are traditionally used to move goods (tangible products) from the manufacturer to the consumer. In the hospitality and travel industries, distribution systems are used to move the customer to the product: the hotel, restaurants, cruise ship or airplane.

     Why are marketing intermediaries used? A restaurant supply company displays, promotes and makes personal sales calls. The restaurant supply house sells hundreds of other item. Their large assortment makes them a convenient supplier to the restaurant industry. The sales potential from their products assortment allows them a convenient, to make personal sales calls, send catalogs and provide other support. Selling through wholesalers and retailers usually is much more efficient than direct sales.

     A restaurant manager can make one call to a restaurant supply house and order a French knife, a dozen plates, and case of candles. Each of these items is produced by a different manufacturer, but they are all available through one phone call. To the purchaser, this means access to small quantities of products because these become part of a large order. Without distribution systems, the restaurateur would have to call individual   manufacturers, such as a knife manufacturer, a china company and a paper company. Each of these   manufacturers would receive thousands of calls from individual restaurants. This would create unnecessary   work and shipping costs for both the manufacturer and the customer.

     Distribution   channel   Functions: Members of the marketing channel perform many key functions:

  • Information : Gathering and distributing marketing research and intelligence information about the marketing environment.
  • Promotion: Developing and spreading persuasive communications about an offer.
  • Contact:  Finding and communicating with prospective buyers
  • Matching:  Shaping and fitting the offer to the buyer’s needs, including such activities as manufacturing, assembling, and packaging.
  • Negotiation: Agreeing on price and other terms of the offer so that ownership and possession can be transferred.
  • Physical distribution: Transporting and storing goods.
  • Financing: Acquiring  and using  funds to cover the costs of channel work
  • Risk tasking: Financial risks such as the in ability to sell inventory at full margin.

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