Marketing for Hospitality and Tourism
- Introduction: Marketing for Hospitality and Tourism
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.
In the restaurant industry, many people confuse marketing with advertising and sales promotion. In reality, selling and advertising are only two marketing functions and often not the most important. Advertising and sales are components of the promotional element of the marketing mix. Other marketing mix elements include product, price and distribution. Marketing also includes research, information system and planning.
Understanding the marketplace and customer needs:
Customer needs, wants and demands: The most basic concept underlying marketing is that of human needs. A human need is a state of felt deprivation. Included are the basic physical needs for food, clothing, warmth and safety, as well as social needs for belonging, affection, fun, and relaxation. There are esteem needs for prestige, recognition and fame, and individual needs for knowledge and self-expression. These needs were not invented by marketers, but they are part of the human makeup.
Wants: The second basic concept to marketing is that of human wants, the form human needs take as they are shaped by culture and individual personality. Wants are how people communicate their needs. A hungry person in Papua New Guinea needs food but wants taro, rice, yams and pork. A hungry person in the United States needs food but wants a hamburger, French fries and a Coke. Wants are described in term of objectives that will satisfy needs. As a society involves, the wants or its members expand. As people are exposed to more objectives that arouse heir interest and desire, producers try to provide more want-satisfying products and services.
Demands: People have almost unlimited wants, but limited resources. They choose products that produce the most satisfaction for their money. When backed by buying power, wants become demands. Outstanding marketing organizations go to great lengths to learn about and understand their customer’s needs, wants and demands.
Market offerings: tangible products, services and experiences: Consumer needs and wants are fulfilled through a market offering: a product that is some combination of tangible, services, information or experiential product components. We often associate the word product with a tangible product or one that has physical properties (e.g. the hotel room or the steak that we receive in a restaurant). In the hospitality industry, the intangible product including customer service and experiences are more important than the tangible products. Managers of resorts realize that their guests will be leaving with memories of their stay. They try to create experiences that will generate pleasant memories.
A market offering includes much more than just physical good or services. Consumers decide which events to experience, which tourist destinations to visit, which hotels to stay in and which restaurants to patronize. To the consumer these are all products.
Customer value and satisfaction: Customer value is the difference between the benefits that the customer gains from owning and using a product and the costs of obtaining the product. Costs can be both monetary and nonmonetary. One of the biggest nonmonetary costs for hospitality customers is time. Luxury hotels in Hong Kong such as the Shangri-La do not expect “executive guests” to stand in line to register. Instead, they are escorted to their room where hot tea is waiting. The registration is completed for them by the hostess.
Customer expectations are based on past buying experiences, the opinions of friends and market information. If we meet customer expectations, they are satisfied. Marketers must be careful to set the right level of expectations. If they set expectations too low, they may satisfy those who buy fail to attract new customers. If they raise expectations too high, buyers will be disappointed.
Customer
satisfaction depends on a product’s perceived performance in delivering
value relative to a buyer’s expectations. If a product’s performance
falls short of the customer’s expectations, the buyer is dissatisfied.
If performance matches expectations, the buyer is satisfied. If performance
exceeds expectations, the buyer is delighted.
- The importance of marketing in the hospitality industry
Designing customer-driven marketing strategy: To design a winning marketing strategy, the marketing manager must answer two important questions: What customers will we serve (what’s our target market?) and how can we serve these customers best (what’s our value proposition?).
Selecting customer to serve: The Company must first decide who it will serve. It does this by dividing the market into segments of customers (market segmentation) and selecting which segments it will go after (target marketing). Some people think of marketing management as finding as many customers as possible. But marketing managers know that they can not serve all customers. By trying to serve all customers, they may not serve any customers well. Instead, the company wants to select only customers that it can serve well.
Marketing management orientation: There are five alternative concepts under which organizations design and carry out their marketing strategies: the production, product, selling, marketing and societal marketing.
The production concept: The production concept is one of the oldest philosophies guiding sellers. The production concept holds that consumers will favor products that are available and highly affordable, and therefore management should focus on production and distribution efficiency. The problem with the production concept is that management may become so focused on production systems that they forget the customers.
A visitor was staying at a hotel in the Swiss Alps with a beautiful view of Lake Geneva. The dining room had an outdoor balcony to experience the beauty of the surroundings. Enjoying breakfast on the balcony was a perfect way to start a summer day. To the guest, the balcony was a great benefit; to the hotel, it as a nuisance. The balcony was at the edge of the dining room and thus the farthest spot from the kitchen. There were no service stations near the balcony, so all supplies had to come from the dining room. There was only one entrance to the balcony, making access difficult. Simply put, serving customers on the balcony was not efficient.
The hotel discouraged customers from eating on the balcony by not setting up the tables. If one asked to eat on the balcony, they received a pained expression from the service person. They then had to wait fifteen minutes for the table to be set. Once the food was served, the service person disappeared, never to be seen again. This was their way of reminding the guest that no one should eat on the balcony. Yet the hotel should have viewed the balcony as providing a competitive advantage.
The product concept: The product concept, like the production concept, has an inward focus. The product concept holds that consumers will favor products that offer the most in quality, performance, and innovative features. Under this concept, marketing strategy focuses on making continuous product improvements.
Product quality and improvement are important parts of most marketing strategies. However, focusing only on the company’s products can lead to marketing myopia. Consumers are trying to satisfy needs and might turn to entirely different products to better satisfy those needs, such as B&Bs instead of hotels or fast-food outlets in student centers instead of cafeterias.
The selling concept: The selling concept holds that consumers will not buy enough of the organization’s products unless the organization undertakes a large selling and promotion effort. The aim of a selling focus is to get every possible sale, not to worry about satisfaction after the sale or the revenue contribution of the sale.
The selling concept does not establish a long-term relationship with the customer because the focus is on getting rid of what one has rather than creating a product to meet the needs of the market. Restaurant often advertise when sales start to drop, without first analyzing why sales are dropping. They do not try to change their product to fit the changing market. They sell harder, pushing their products on the customer through increased advertising and couponing. Eventually, the go out of business because their product no longer satisfied the needs of the marketplace.
The selling concept exists within the hospitality industry. A major contributing factor is overcapacity. Virtually every major sector of this industry has suffered from overcapacity. When owners and top management face overcapacity, the tendency is to sell, sell, and sell.
The marketing concept: the marketing concept is a more recent business philosophy one that is being rapidly adopted in the hospitality industry. Many companies have adopted the marketing concept. We know that four Seasons Hotels and McDonald’s follow this concept fully. The marketing concept holds that achieving organizational goals depends on determining the needs and wants of target markets and delivering the desired satisfaction more effectively and efficiently than competitors.
Amazingly, niche opportunities sometimes remain available long after suppliers recognize the need. This is probably due to difficulties in changing the behavior of those who supply the products, such as the wait staff in a restaurant.
The societal marketing concept: The societal marketing concept, the newest marketing concept, holds that the organization should determine the needs, wants and interests of target markets and deliver the desired satisfactions more effectively and efficiently than competitors. The societal marketing concept questions whether the marketing concept is adequate in an age of environmental problems, resource shortages, rapid population growth, worldwide inflation and neglected social services. It asks if the firm that serves and satisfies individual wants is always doing what’s best for consumers and society in the long run. The pure marketing concept ignores possible conflicts between short-run consumer wants and long-run societal needs.
Advocates of the societal marketing concept would like public-interest groups to guide corporation toward decisions that will benefit society over the long term. Societal pressures are already manifested in the marketing of cigarettes and liquor. Hotel chains have established no-smoking floors and no-smoking sections in their restaurants. Restaurant and their state associations have developed training programs on how to serve alcohol responsibly. The cocktail reception may become phenomenon of the past. Today at many receptions mineral water, fruit juices and soft drinks are served.
- Service Characteristics of Hospitality and Tourism Marketing
The service culture: One of the most important tasks of hospitality business is to develop the service side of the business, specifically a strong service culture.
The service culture focuses on serving and satisfying the customer. Creation of a service culture has to start with top management and flow down. For example, an organization wants to deliver a quality product, so the management must support and reward attention to customer needs. This means the business mission contains a service vision. It also means an organization hires employees with a customer service attitude, and then it works with employees to instill the concept of service.
Characteristics of service marketing: Service marketers must be concerned with four characteristics of services: intangibility, inseparability, variability and perishability.
Intangibility: Unlike physical products, services cannot be seen, tasted, felt, heard or smelled before they are purchased. Prior to boarding an airplane, passengers have nothing but an airline ticket and the promise of safe delivery to their destination. Members of a hotel sales force cannot take a hotel room with them on a sales call. In fact, they do not sell a room. Instead, they sell the right to use a room for a specific period of time. When hotel guests leave, they have nothing to show for the purchase but a receipt. Robert Lewis observed that someone who purchases a service may go away empty-handed, but they do not go away empty-headed.
Inseparability: In most hospitality services, both the service provider and the customer must be present for the transaction to occur. The food in a restaurant may be outstanding, but if the service person has a poor attitude or provides inattentive service, customers will not be satisfied with their experience.
Service inseparability also means that customers are part of the product. A couple may have chosen a restaurant because it is quiet and romantic, but if a group of loud and boisterous conventioneers is seated in the same room, the couple will be disappointed. Managers must manage their customers so they do not create satisfaction for others.
Another implication of inseparability is that customers and employees must understand the service delivery system because they are coproducing the service. Customers must understand the menu items in a restaurant so that they get the dish they expect.
Variability: Services are highly variable. Their quality depends on who provides them and when and where they are provided. There are several causes of service variability. Services are produced and consumed simultaneously, which limits quality control. Fluctuating demand makes it difficult to deliver consistent products during periods of peak demand. The high degree of contact between the service provider and the guest means that product consistency depends on the service provider’s skills and performance at the time of the exchange.
A guest can receive excellent service one day and mediocre service from the same person the next day. In the case of mediocre service, the service person may not have felt well or perhaps experienced an emotional problem. Lack of communication and heterogeneity of guest expectations also lead to service variability.
Perishability: services can not be stored. A 100-room hotel that sells only 60 rooms on a particular night cannot inventory the 40 unused rooms and then sell 140 rooms the next night. Revenue lost from not selling those 40 rooms is gone forever. Because of service perishability, airlines and some hotels charge guests holding guaranteed reservations when they fail to arrive.
Restaurants are also starting to charge a fee to customers who do not show up for reservation. They, too, realize that if someone does not show up for a reservation, the opportunity to sell that seat may be lost. Ritz-Carlton: taking care of those who take care of customers: Ritz-Carlton, a chain of eighty-five luxury hotels located around the world. Ritz-Carlton caters to the top 5 percent of corporate and leisure travelers. The company’s credo sets lofty customer service goals: “The Ritz-Carlton hotel is a place where the care and comfort of our guests is our highest mission. We provide the finest personal service and facilities for our guest, who will always enjoy a warm, relaxed, yet refined ambience.”
Since its incorporation in 1983, the Ritz-Carlton Hotel Company has received all the major industry awards the hospitality industry.
At Ritz-Carlton, more than 90 percent of Ritz-Carlton customers return. Despite its hefty room rate, the chain enjoys a 70 percent occupancy rate. Most of the responsibility for keeping guests satisfied falls to Ritz-Carlton’s customer-contact employees. Thus the hotel chain takes great care in selecting its personnel.
Ritz-Carlton employees are empowered to handle problems on the spot, without consulting higher-ups. Each employee can spend up to 2.000$ to redress a guest grievance and each is allowed to break from his or her routine for as long as needed to make a guest happy. “We master customer satisfaction at the individual level. This is our most sensitive listening post… our early warning system”. Thus while competitors are still reading guest comment cards to learn about customer problems, Ritz-Carlton has already resolved them.
Ritz-Carlton instills a sense of pride in its employees. “You serve”, they are told, “but you are not servants”. The company motto states, “We are ladies and gentlemen serving ladies and gentlemen”.
Ritz-Carlton’s
success is based on a simple philosophy: to take care of customers,
you must take care of those who take care of customers.
- Marketing Information Systems and Marketing Research
The marketing information system: A marketing information system consists of people, equipment, and procedures to gather sort, analyze, evaluate and distribute needed, timely and accurate information to marketing decision markers.
Assessing information needs: A good marketing information system balances that managers would like to have against that which they really need. A company begins by interviewing managers to determine their information needs. For example, Mrs Field’s Cookies provides their managers with sales forecasts each hour. When sales are falling, the computer suggests merchandising techniques such as sampling in the mall to pick up sales.
Some managers ask for whatever information they can get without thinking carefully about its cost or usefulness. Too much information can be as harmful as too little. Other busy managers may fail to ask for things they need to know, or managers may not ask for some types of information that they should have.
Developing information: information needed by marketing managers can be obtained from internal data, marketing intelligence and marketing research.
Internal data: Many companies build extensive internal databases, electronic collections of consumer and market information obtained from data sources within the company network. Marketing managers can readily access and work with information in the database to identify marketing opportunities and problems, plan programs and evaluate performance.
Internal database usually can be accessed more quickly and cheaply than other information sources, but they also present some problems. Because internal information was often collected for other purposes, it may be incomplete or in the wrong form of marketing decision.
Marketing intelligence: Marketing intelligence includes every day information about developments in the marketing environment that helps managers prepare and adjust marketing plans and short-run tactics.
Marketing research: Marketing research is a process that identifies and defines marketing opportunities and problems, monitors and evaluates marketing actions and performance, and communicates the finding and implications to management.
The marketing research process consists of four steps: defining the problem and research objectives, developing the research plan, implementing the research plan, interpreting and reporting the findings.
Defining the problem and research objectives: Managers must know enough about marketing research to interpret the finding carefully. If they know little about marketing research, they may accept the wrong information. Marketing research can help the managers define the problem and use the findings correctly.
Developing the research plan: To meet a manager’s information needs, researchers can gather secondary data, primary data, or both. Secondary data consist of information already in existence somewhere, having been collected for another purpose. Primary data consist of information collected for the specific purpose at hand.
Researchers usually start by gathering secondary data. Secondary data are usually obtained more quickly and at lower cost than primary data. Basing decisions on secondary data, however, can also present problems. The required information may not exist. Even when it exist, it might not be very relevant and accurate.
There are three basic research approaches of primary data: observations, surveys and experiments. Observational research is the gathering of primary data by observing relevant people, actions and situations.
Survey research is the approach best suited to gathering descriptive information. Survey research can be structured and unstructured. Structured surveys use formal lists of questions asked of all respondents in the same way. Unstructured surveys let the interview probe respondents and guide the interview according to their answers.
Marketing research in smaller organizations: Managers of small businesses often believe that marketing research can be done only by experts in large companies with large research budget. But many marketing research techniques can be used by smaller organizations and a little or no expense.
Managers of small businesses can obtain good marketing information by observing what occurs around them. Thus, restaurateurs can evaluate their customer mix by recording the number and type of customers in the restaurant at different times during the day.
Managers
can conduct informal surveys using small convenience samples. The manager
of travel agency can learn what customers like and dislike about travel
agencies by conducting informal focus groups, such as inviting small
groups to lunch. Thus, secondary data collection, observation, surveys
and experiments can be used effectively by small organizations with
small budgets.
- Understanding and segmenting customers, consumer markets and consumer buyer behavior
Market segmentation: Markets consists of buyers who differ in one or more ways. They may differ in their wants, resources, locations, buying attitudes and buying practices.
There is no single way to segment a market. In segmenting consumer market used the geographic, demographic, psychographic and behavioristic variables.
Geographic segmentation: geographic segmentation calls for dividing the market into different geographic units such as nations, states, regions, counties, cities or neighborhood.
Demographic segmentation: Demographic segmentation consists of dividing the marketing into groups on demographic variables such as age, life cycle, gender, income, occupation, education, religion, race and nationality. Demographic variables are the most common bases for segmenting customer groups. One reason is that consumer preferences and use rates often closely with demographic variables. Another is that demographic variables are easy to measure.
Age and life-cycle stage: Consumer preferences change with age. Some companies offer different products to penetrate various age and life-cycle segments.
For example, McDonald’s offers Happy Meals that include toys aimed at young children. McDonald’s know that 79 percent of the family decisions to eat out are influenced by children.
Gender: Gender segmentation has long been used in marketing clothing, hair, cosmetics and magazines. It is now used in the hospitality industry. In 1970 women accounted for less than 1 percent of all business travelers.
Today women represent a very important market segment. Hotel corporations now take women into consideration of designing their hotel rooms. Design changes include lobby bars, fitness facilities, hair dryers and others.
Psychographic segmentation: Psychographic segmentation divides buyers into different groups based on social class, lifestyle and personality characteristic.
Almost every society has some form of social class structure. Social classes are permanent and ordered divisions in a society whose members share similar values, interests, and behaviors.
People coming from the same subculture, social class and occupation may have quite different lifestyles. A lifestyle is a person’s pattern of living as expressed in his or her activities, interests and opinions.
Each person’s personality influences his or her buying behavior. Personality can be useful in analyzing consumer behavior for some product. For example, a beer company may discover that heavy beer drinkers are sociability and aggressiveness. This information can be used to establish a brand image for the beer and to suggest the type of people to show in an advertisement.
Behavioral segmentation: In behavioral segmentation buyers are divided into groups based on their knowledge, attitude and use or response to a product. Occasion segmentation
Market targeting: When evaluating different market segments, a firm must look at three factors: segment size or growth, segment structural attractiveness, and company objectives and resources.
Segment size and growth: A company must first collect and analyze data on current segment sales growth rates and expected profitability for various segments. It will be interested in segments that have the right size and growth characteristics. Some companies want to target segments with large current sales, a high growth rate and a high profit margin.
However, the largest fastest growing segments are not always the most attractive for every company.
Segment structural attractiveness: A segment might have desirable size and growth and still not offer attractive profits. The company must examine several major structural factors that affect long-run segment attractiveness.
For
example, a segment is less attractive if it already contains many strong
and aggressive competitors. The existence of many actual or potential
substitute products may limit prices and profits.
- The buyer decision process
Personal characteristics affecting consumer behavior: Consumer purchases are strongly influenced by cultural, social, personal and psychological characteristics.
Cultural factors: Cultural factors exert the broadest and deepest influence on consumer behavior. We examine the role played by the buyer’s culture, subculture and social class.
Culture is the most basic determinant of a person’s wants and behavior. It comprises the basic values, perceptions, wants and behaviors that person learns continuously in a society.
Each culture contains smaller subcultures, or groups of people with shared value systems. Subcultures include nationalities, religions, racial groups and geographic regions. Many subcultures make up important market segments, and marketers often design products to their needs. Example, of three such important subculture groups include Hispanic, African American and Asian consumers.
Almost every society has some form of social class structure. Social classes are permanent and ordered divisions in a society whose members share similar values, interests, and behaviors.
Social factors: Consumer behavior is also influenced by social factors, including the consumers’ groups, family, social roles and status.
Groups that have a direct influence and to which a person belongs are called membership groups. They include primary groups, such as family, friends, neighbors, specifically, those with whom there is regular but informal interaction. Secondary groups are more formal and have less regular interaction; they include religious groups, professional associations and trade unions. In some societies, secondary groups may be membership groups.
Reference groups serve as direct or indirect points of comparison or reference in the forming of a person’s attitudes and behavior. People can also be influenced by aspirational groups to which they do not belong but would like to.
A person belongs to many groups: family, clubs and organizations. An individual’s position in each group can be defined in terms of role and status. A role consist of the activities that a person is expected to perform according to the persons around him or her. Common roles include son or daughter, wife or husband and managers or workers.
Each role carries a status reflecting the general esteem given to it by society. People often choose products that show their status in society.
Personal factors: A buyers decisions are also influenced by personal characteristics such as age and life-cycle stage, occupation, economic situation, lifestyle, personality and self-concept.
The types of goods and services people buy change during their lifetimes. Preferences for a leisure activities, travel destinations, food and entertainment are often age related.
Buying behavior is also shaped by the family life-cycle stages. Young unmarried persons usually have few financial burdens, and they spend a good portion of their discretionary income on entertainment. Young married people without children have high discretionary incomes and dine out frequently. In fact, they have a higher frequency of dining out than any other group.
A person’s occupation affects the goods and services bought. For example, business executives purchase meals from a full-service restaurant, whereas clerical employees may bring their lunch or purchase lunch from a nearby quick-service restaurant. Employees of some consulting firms are not allowed to eat in fast-food restaurants.
A person’s economic situation greatly affects product choice and the decision to purchase a particular product. Consumers cut back on restaurant meals, entertainment and vacations during recessions. They trade down in their choice of restaurants or menu items and eat out less frequently.
People coming from the same subculture, social class and occupation may have quite different lifestyles. A lifestyle is a person’s pattern of living as expressed in his or her activities, interests and opinions.
Each person’s personality influences his or her buying behavior. Personality can be useful in analyzing consumer behavior for some product. For example, a beer company may discover that heavy beer drinkers are sociability and aggressiveness. This information can be used to establish a brand image for the beer and to suggest the type of people to show in an advertisement.
Psychological factors: A person’s buying choices are also influenced by four major psychological factors: motivation, perception, learning, and beliefs and attitudes.
Motivation: A person has many needs at any given time. Some are biological, arising from hunger, thirst and discomfort. Others are psychological, such as the need for recognition, esteem or belonging. Most of the needs are not strong enough to motivate a person to act at a given point in time. A need become a motive when it is aroused to a sufficient level of intensity.
Perception: A motivated person is ready to act. How that person acts is influenced by his or her perception of the situation. In the same situation, two people with the same motivation may act quite differently based on how they perceive conditions. Why do people have different perceptions of the same situation? All of us experience a stimulus by the flow of information through our five senses: sight, hearing, smell, touch and taste. However, each of us receives, organizes and interprets this sensory information in an individual way. Perception is the process by which an individual selects, organizes and interprets information to create a meaningful picture of the world.
Beliefs and attitudes: A belief is a descriptive thought that a person holds about something. A customer may believe that Adam’s Mark Hotels have the best facilities than any other hotel. People have attitudes about almost everything: religion, politics, clothes, music and food. Attitude put people into a frame of mind for liking or disliking things and moving toward or away from them.
The buyer decision process: consists of five stages: need recognition, information search, evaluation of alternatives, purchase decision and post purchase behavior.
Need recognition: At this stage, marketers must determine the factors and situations that trigger consumer problem recognition. They should research consumers to find out what kinds of needs or problems led them to purchase an item, what brought these needs about, and how they led consumers to choose this particular product.
Information search: An aroused consumer may or may not search for more information. If the consumer’s drive is strong and satisfying product is near at hand, the consumer is likely to buy it at the moment. If not, the consumer may simply store the need in memory and search for relevant information.
Evaluation of alternatives: There is no simple and single evaluation process used by all consumers or even by one consumer in all buying situations. Some basic concepts help explain consumer evaluation process. First, we assume that each consumer sees a product as a bundle of product attributes. The most attention is paid to attributes connected with their needs. Second, the consumer attaches different degrees of importance to each attribute. Third, the consumer develops a set of beliefs about where each brand stands on each attribute. Fourth, the consumer is assumed to have a utility function for each attribute.
Purchase decision: The consumer forms a purchase intention based on factors such as expected family income, expected price, and expected benefits from the product. When the consumer is about to act, unexpected situations may arise to change the purchase intention.
Post
purchase behavior: Following a purchase, the consumer will be satisfied
or dissatisfied. If the product matches expectations, the consumer will
be satisfied. If it falls short, the consumer will experience dissatisfaction.
- Market environment, Market segmentation, targeting and positioning
The marketing environment is made up of a microenvironment and macro environment. Microenvironment consists of factors close to the company that affect its customer, company, and marketing channels. The macroenvironment consists of larger societal forces that affect whole microenvironment (demographic, economic, natural, technological and political). The company’s microenvironment:
The company: Marketing managers must work closely with the top management and various company departments. The finance department is concerned with funding to carry out marketing plan. Account department measures revenues and costs to help marketers to achieve goals. All managers should think consumers and provide superior customer value and satisfaction. Existing competitors: Every company faces a broad range of existing competitors. The marketing concept holds a successful company must satisfy the needs and wants of consumers better than its competitors. A large restaurants chain can use its buying power to purchase national advertising, spreading the cost while small individually owned restaurants are able to adjust quickly to local trends and offer menu of local character. In general a company should monitor the following while analyzing competitors:
- Share of market
- Share of mind
- Share of heart. Name the company from whom you would prefer to buy the product.
Managers often fail to identify its competitors correctly. The manager of Houston seafood restaurants said that his restaurant had no competition because there were no other seafood restaurants within several miles. Several months later the restaurant went out of business. Customers decided to spend their money at competitors, either by driving farther to other seafood restaurants or by dining at nearby non-seafood restaurant.
Suppliers:
Suppliers are firms or individuals that provide the resources needed
by the company to produce its goods and services. Some hotels have contracted
with restaurants companies to supply their food and beverage services.
The New York, New York in Las Vegas has contracted with ARC restaurant
to manage its restaurants. These hotels are bringing branded restaurants
to their hotels to create value for their guests. Outsourcing of food
and beverage allows the hotel to concentrate on lodging while letting
food and beverage specialists handle this area within the hotel. Marketing
intermediaries: Marketing intermediaries help the company promote
sell and distribute its goods to the final buyers. They include travel
agents, wholesale tour operators and hotel representatives. Disinter
- Media publics- TV, newspaper, magazines
- Financial – banks, stockholders
- Government public – the company lawyers
- Citizen- action public-environment groups, minority groups
- Local publics – include neighborhood residents and community organizations
- General public- a company needs to be concerned about the general public`s attitude toward its products and activities.
- Internal public- workers, managers, volunteers, broad of directors
The company’s macroenvironment: Future competitors: Two forces affect the competition to enter and exit markets. Entry barriers prevent firms from getting into a business and barriers to exit prevent them from leaving. Low barriers to entry characterize the restaurant industry. It takes a relatively small amount of capital to get started in the restaurant industry. This makes it hard to predict future competition because a large pool of organizations and individuals can open restaurant. Hotels have moderately high barriers of entry, due to the cost of building a hotel. Large capital investment required to build a hotel becomes a sunk cost. If the hotels cannot meet their debt payments, taxes, the hotel may operate at a loss rather than close their doors. Demographic environment: Demography is the study of human populations in terms of size, density, location, age, gender, race, occupation and other statistics. Now the population is 6.6 billion but by the year 2030 it will grow to 8.1 billion. Changes in the world demographic environment have major implications for business. For example, consider Chine. Chinese government limited families to one child each. As a result, Chinese children are known as prince and princess. 1 emperor has 6 people who are taking care of them-grandparents and parents. Because of 1 child policy close to 75% of all Chinese families will be childless. Either because they choose to have no children or their child decides not to leave with the family. The result will be that Chinese will travel and senior living. The U.S. population contains several groups:
- Baby boomers
- Generation X
- The millennial
The
baby boomers: The post World War baby boom produced
78 million baby boomers, born between 1946 and 1964. Over the years,
the baby boomers have been one of the most powerful forces shaping the
marketing environment. These baby-boomers do not feel old. They spent
billions of dollars on travel, looking for active vacations where they
can have adventure or explore, polar bear sighting expedition in northern
Canada. Butterfield and Robinson developed biking tours for these baby-boomers. Gene
- growing shortages of raw materials
- increased pollution
- increased government intervention in natural resource management
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