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HOSPITALITY MARKETING
Chapter 1
Hospitality Marketing
After completion of the chapter, the student shall be
able to understand:
Hospitality industry and its sectors
Marketing definition.
The need of the customer (consumer).
Concepts of Marketing.
Hospitality is:
Derived from the Latin word hospitare meaning to
receive as a guest
Hospitality is act of kindness in welcoming and
looking after the basic needs of guests or strangers,
mainly in relation to food, drink and accommodation.
Hospitality is the relationship process between a
guest and a host.
Hospitality reception and entertainment of guests,
visitors, or strangers with liberality and goodwill.
1.2 Marketing
This definition is based upon a basic marketing exchange process and recognizes the importance
of value to the customer.
The authors, Kotler & Armstrong developed their original definition to recognize the importance
of the long term relationship with the customer. This according to them is achieved by
relationship marketing and Customer Relationship Management (CRM).
The CIM definition looks not only at identifying customer needs, but also satisfying
them(short term) and anticipating them in future (long term retention). The definition
also states importance of a process of marketing, with marketing objectives and
outcomes. CIM is recognized as being one of the most influential marketing bodies in
the world. It is the professional body for marketing in the United Kingdom.
An important part of the marketing definition is, customers NEED. The moment a human
being feels a need, she/he is motivated to satisfy it.
Market
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1.4.a Develop
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1.4.b Manufacture
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1.4.c Market
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1.4.d Deliver
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1.5.2 Products
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1.5.3 Value/Cost/Satisfaction
Decision for purchase made based on
value/cost satisfaction delivered by product/offering.
Product fulfills/Satisfies Need/Want.
Value is products capacity to satisfy
needs/wants as per consumers
perception or estimation.
Each product would have a cost/price
elements attached to it. E.g.Travel
from city A to city B.
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1.5.3 Value/Cost/Satisfaction
Need to reach B (from A)
Method/ Products- Rail/ air/ road
or train/ plane.
Satisfaction Estimated in terms of time
lead & travel comfort.
VALUE- Products capacity to satisfy.
COST- Price of each product.
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1.5.4 a. Exchange
The act/ process of obtaining a desired product from
someone by offering something in return. For
exchange potential to exist, the following conditions
must be fulfilled.
There must be at least two parties.
Each party has something of
value for other party.
Each party is capable of communication & delivery
Each party is free to accept/reject the exchange offer.
Each party believes it is appropriate to deal with the
other party.
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1.5.4 b. Transaction
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1.5.4 b. Transaction
Proof of transaction is BILL/ INVOICE.
TRANSFER: It is one way. Hence, differ from
Transaction.
NEGOTIATION: Process of trying to arrive at
mutually agreeable terms.
Negotiation may lead to:
Transaction.
Decision not to Transact.
Compiled by: Ms. Madhuri.
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1.5.5 Relationship/Networking
Relationship marketing: - Its a pattern of building
long term satisfying
relationship with customers,
suppliers, distributors in order
to retain their long term performances and business.
Achieved through promise and
delivery of high quality good
Service, Fair pricing,
over a period of time.
Outcome of Relationship Marketing is a
MARKETING NETWORK.
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1.5.6 Market
A market consists of all potential customers sharing
particular need/want who may be willing and able to
engage in exchange to satisfy need/want.
Types of Markets:
1. Resource Market,
2. Manufacturing Market,
3. Intermediary Market,
4. Consumer Market,
5. Government market.
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1.5.7 Marketers/Prospects
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1.5.7 Marketers/Prospects
Marketer may be seller or buyer.
Most of time, marketer is seller.
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1.6 Pillars of
Marketing Management
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1.6.5 The
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1.6.5 The
The societal marketing orientation was a response to
these criticisms, and recognizes that commercial
organizations have a wider responsibility than simply
looking after customers and staff.
A societal marketing orientation suggests that
companies should become proactive in the
community, adopting a good neighbor policy in
their companys best interest.
A number of hospitality organizations have genuinely
adopted societal marketing.
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1.7 An Introduction to
Hospitality Marketing
Consumers have to make buying choices based on
their own resources or buying power. Consumers will
often buy the best bundle of benefits provided by a
product, for the price that can be afforded. The
combined purchase decisions of all the
individuals buying a product
(or service) is described as
market demand.
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1.7 An Introduction to
Hospitality Marketing
Market demand is normally measured using two
criteria:
1. The number of units sold, which
is a reflection of the number of
people buying the product or
service; This is called the volume.
2. How much people have paid for
the product; This is called the value.
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1.7 An Introduction to
Hospitality Marketing
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1.7 An Introduction to
Hospitality Marketing
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1.7 An Introduction to
Hospitality Marketing
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1.7 An Introduction to
Hospitality Marketing
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1.7 An Introduction to
Hospitality Marketing
2. Leisure travel demand includes journeys where
people travel away from home for amusement,
entertainment or relaxation for example, holidays,
weekend breaks, or same-day visits.
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1.7 An Introduction to
Hospitality Marketing
3. Domestic travel demand includes all the travel
generated within a country by people living in that
country For example, the domestic demand for
business travel in India is all business journeys taken
in India by people
living in India.
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1.7 An Introduction to
Hospitality Marketing
4. International travel demand includes all the
journeys generated to a country from people living in
other countries. France is one of the most popular
tourist destinations, and attracts international visitors
from all over the world.
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THANK YOU !!
Compiled by: Ms. Madhuri.
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Chapter 2
ELEMENTS OF SERVICE MARKETING
Chapter 1
Hospitality Marketing
After completion of the chapter, the student shall be
able to understand:
To define service marketing.
To understand the elements of marketing from the
point of view of service industry.
To know the importance of 7 Ps.
To understand the terms related to service marketing.
2.1.1 Inseparable
2.1.1 Inseparable
2.1.2 Intangible
2.1.3 Perishable
Perishable - in that once it has occurred it cannot be
repeated in exactly the same way.
E.g. Once a flight has taken off you cannot sell that
seat again, hence the airline makes no profit on that
seat. Therefore the airline has no choice but to price
at peak when it sells a seat at busy times in order to
make a profit. That's why restaurants offer vouchers
to compensate for quieter times, and it is the same for
railway tickets and matinees in Broadway during the
middle of the week.
2.1.4 Variable
Variability- since the human involvement in service
provision means that no two services will be
completely identical, they are variable.
E.g. With the greatly standardized McDonalds
experience, there are slight changes in service, often
through no fault of the business itself. Sometimes
Saturday lunchtime will be extremely busy, on other
days you may have to wait to go via the drive
through. So services tend to vary from one user
experience to another.
2.1.5 Homogenous
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2.1.5 Homogenous
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The
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Type of Hotels
We shall look at the hotel property as a product.
All hospitality marketers must be thoroughly familiar
with the types of hotel they promote and the clientele
they serve.
With the evolution of hotel and its proliferation
around the world it is impossible to categorize them
under one term.
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Type of Hotels
Here is a list of hotels usually used in the tourism
circuit, each with a specific purpose and clientele:
Airport Hotel
Bed & Breakfast Hotel
Boutique Hotel
Budget Hotel
Business Hotel
Casino Hotel
Conference Hotel
Conventional Hotel
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Type of Hotels
Destination Hotel
Deluxe
Hotel
Downtown Hotel
Family Hotel
Group Hotel
Inns
Motel
Residential Hotel
Resort
Suburban Hotel
Suite Hotel
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a.
b.
c.
d.
e.
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a.
b.
c.
d.
e.
Uniformed Services:
The basic services provided by the front office are:
Selling rooms
Reserving rooms for guests before their arrival
Registering guests into the hotel
Assigning rooms
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Uniformed Services
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Housekeeping Services:
This department is
responsible for the
cleanliness, maintenance
and the aesthetic standards
of the hotel. Housekeeping provides laundered staff
uniforms, room and restaurant linen and fresh and
dried flower arrangements. This service is
important to the guest because it keeps their rooms
clean to high standards of sanitation and hygiene.
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Restaurant Service
Restaurant service is available through a choice of
dining opportunities explained earlier. The restaurant
provides meals and drinks by a waiting staff that is
qualified and artful in their profession.
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Bar Service
Restaurant service is available through a choice of
dining opportunities explained earlier. The restaurant
provides meals and drinks by a waiting staff that is
qualified and artful in their profession.
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Kitchen Service
Kitchens in large hotels
have independent sections
to deal with various aspects
of food preparation due to the sheer volume of
activity, smaller kitchens would club sections or have
multi-skilled cooks to carry out several roles.
Kitchen personnel coordinate with restaurants, room
service and banquets for the supply of food orders.
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Service
Event Service
These are provided by the banquet department to
conduct any kind of event within the Hotel Premises.
Health Club & Recreational Services
The health club is a specialist that has an
independent and qualified charge over gymnasium
for the guests. The recreation can be an independent
activity based on the no. of options available, like
Tennis Court, Squash court or outdoor sports
activities.
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Service
The beauty salon provides hair dressing and beauty
care services.
Guest Relations
Guest relation executive ensures that all guests
especially the V.I.P.s are kept comfortable during
their stay.
Concierge Services
Concierge provides personalized services and
information to guests in large hotels during their stay
and offers messaging services.
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2.4.1 Product
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2.4.2 Pricing
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2.4.3 Place
Since service delivery is concurrent with its
production and cannot be stored or transported, the
location of the service product assumes importance.
Service providers have to give special thought as to
where the service is provided.
A fine dining restaurant is better located in a busy,
upscale market as opposed to the outskirts of a city.
A holiday resort is better situated in the countryside
away from the rush and noise of a city.
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2.4.4 Promotion
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2.4.4 Promotion
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2.4.5 People
People are a defining factor in a service delivery
process, since a service is inseparable from the
person providing it. A restaurant is known as much
for its food as for the service provided by its staff.
The same is true of banks and department stores.
Consequently, customer service training for staff has
become a top priority for many organizations today.
Customer service lies at the heart of modern service
industries.
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2.4.5 People
Customers are likely to be loyal to organizations that
serve them well - from the way in which a telephone
query is handled, to direct face-to-face interactions.
Although the 'have a nice day' approach is a bit
corny, it is certainly better than a couldn't care less
approach to customer relations. Call center staff and
customer interfacing personnel are the front line
troops of any organization and therefore need to be
thoroughly familiar with good customer relation's
practice.
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2.4.6 Process
The process of service delivery is crucial since it
ensures that the same standard of service is
repeatedly delivered to the customers.
Most companies have a service blue print which
provides the details of the service delivery process,
often going down to even defining the service script
and the greeting phrases to be used by the service
staff. - associated with customer service are a
number of processes involved in making marketing
effective in an organization
e.g. processes for handling customer complaints,
processes for identifying customer needs and
requirements, processes for handling order etc.
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2.5.1 Popularity
The popularity of the hotel is how much search there
is for your hotel.
Its a simple factor and can be measured through
basic tools like Google Analytics or other site
analytics tools.
The searches for your brand are the most qualified
leads you can get and the most important long term
strategy is to increase those searches.
Other tools are: Social media, advertising on search
engines and much more.
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2.5.4 Design
There are two extremes in design and one middle
ground.
The first extreme is going totally creative and
making the most amazing website. While this is
tempting and great for ones ego, it isnt necessarily
the most efficient.
Then theres the other extreme which is doing a site
thats only there to generate bookings and doesnt
help the hotels image.
The middle-ground is always the hardest it requires
extremely good knowledge of the elements that make
a website sell while having a keen eye for design.
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2.6 Terms
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2.6 Terms
Marketing Mix: A business tool used in marketing
products; often crucial when determining a product
or brand's unique selling point. Often synonymous
with the four Ps: price, product, promotion, and
place.
Internal Marketing: Marketing by a service firm to
train effectively and motivate its customer contact
employees and all the supporting service people to
work as a team to provide customer satisfaction.
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2.6 Terms
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2.6 Terms
Revenue Management: A pricing method using
price as a means of matching demand with capacity.
Service Inseparability: A major characteristics of
services; they are produced and consumed at the
same time and cannot be separated from their
providers, whether the providers are people or
machines.
Service Intangibility: A major characteristics of
services; they cannot be seen, tasted, felt, heard or
smelled before they are bought.
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2.6 Terms
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2.6 Terms
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THANK YOU !!
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Chapter 3
ENVIRONMENTAL INFLUENCES ON
HOSPITALITY ORGANIZATION
Chapter 3
Environmental Influences on Hospitality
Organization
After completion of the chapter, the student shall be
able to understand:
To define the term Environment, and understand its
importance.
To segregate the environment into external (Macro)
& internal (Micro).
To study the impact of environmental factors on the
hotel industry.
3.1 Introduction
Since marketing is an outward-looking business
philosophy, marketers in hospitality companies need
to understand and adapt to changes in the business
environment.
Marketing opportunities offers both opportunities and
threats. Successful companies know the vital
importance of constantly watching and adapting to
the changing environment.
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3.3.1 Political
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3.3.1 Political
Examples include:
Planning regulations (permission for building
hotel, restaurant and leisure extensions or
developing new properties), which alter the
industry capacity.
Licensing laws, which regulate the opening times of
licensed premises.
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3.3.1 Political
Local, regional or national government taxes,
which impact on prices (Value Added Tax and
General Sales Tax rates, and excise duty on
alcoholic drinks) and therefore influence the
demand for hospitality products.
Regulation of marketing communications
(different European countries have different
regulations concerning advertising, direct mail and
the use of databases for marketing purposes).
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3.3.1 Political
Monopolies and Restrictive Practices Act to protect
companies from unfair competition.
Consumer Protection Act to protect consumers
from unfair business practice.
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3.3.1 Political
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3.3.2 Economic
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3.3.2 Economic
The exchange rate. These factors combine to
influence business confidence, consumers
disposable income and consumer confidence,
which play a significant role in changing demand
for hospitality markets. When business and
consumer confidence is high, hospitality markets
thrive; when business and consumer confidence is
low, hospitality markets decline and firms are
prone to failure. A key economic factor is the
business cycle, which influences demand.
Hospitality firms need to respond to the stages in
the business cycle.
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3.3.2 Economic
o When business and consumer confidence is high,
hospitality markets thrive; when business and
consumer confidence is low, hospitality markets
decline and firms are prone to failure.
o A key economic factor is the business cycle, which
influences demand.
oHospitality firms need to respond to the stages in
the business cycle.
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3.3.2 Economic
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3.3.2 Economic
Growth.
Occupancy and room rates increase in
response to growing demand, there is a strong
positive cash flow (which means that capital is
available for further investment), property values
increase, and hoteliers have high business
confidence.
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3.3.2 Economic
Peak.
Occupancy and room rates remain
strong, and funds are still available for
investment; however, growth tends to slow.
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3.3.2 Economic
Decline
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3.3.2 Economic
Trough.
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3.3.3 Socio-Culture
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3.3.3 Socio-Culture
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3.3.3 Socio-Culture
Growth in Ethnic Minorities This increases
demand for varied and special food.
Food habits of Target markets Restrictions such
as no beef for Hindus, No pork for Muslims, some
people being vegetarian, some people being allergic
to garlic, peanuts ,etc. also affect the sale of food.
Greater Environmental Consciousness This has
generated demands for recycling, preserving,
nature, etc.
Health The health conscious public now wants
diet food and salad bars in the menu. They also
want non-smoking guest rooms and dining areas.
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3.3.5 Technological
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3.3.5 Technological
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3.3.5 Technological
Technologies like Mechanization of work methods,
Food technology - production of organic
vegetables, frozen food, and meat and dairy
alternatives have helped the hotel industry and
minimized labour work.
Future innovations, rather today we already hear
about underwater hotels, desalination of sea water,
and booking in space hotels have commenced.
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3.3.6 Environmental
Tourism:
Encourages new hotel and leisure developments.
Impinges on natural habitats.
Uses up scarce resources.
Generates air and noise pollution.
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3.3.6 Environmental
Tourism:
Creates waste disposal problems.
Although the concept of sustainable tourism is
much publicized, and green pressure groups lobby
government and hospitality companies to improve
the industrys environmental policies, the hotel and
restaurant industry does not have a good reputation
in this area.
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3.4.1 Customers
Hospitality companies typically target a broad mix of
customers, including business and leisure hotel
residents, non-resident diners and drinkers.
Managing the customer mix to ensure that all the
different types of customers are satisfied or delighted
is one of the major roles for marketing.
Over time customers can change their needs and
wants, so companies have to monitor and respond to
these changes.
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3.4.1 Customers
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3.4.1 Customers
The hospitality company needs to study five types of
general customer markets closely. Consumer markets
consist of individuals and household that purchase
hospitality services for leisure activities, medical
needs and gatherings such as re-unions, weddings or
funerals.
Business markets buy hospitality services to facilitate
their business. This can be individual rooms for
travelers representing the company or for group
meetings the company or organization may conduct
or produce.
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3.4.1 Customers
Government markets are made up of government
agencies that, like business, purchase hospitality
services for individual travelers and meetings.
Finally, international markets consist of those buyers
in other countries, including consumers, business,
resellers and governments. Each market type has
special characteristics that call for careful study by
the seller.
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3.4.2 Employees
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3.4.3 Suppliers
The hospitality companys performance is dependent
upon its suppliers.
Although marketers are not directly involved in
operational purchase decisions, marketing should
have an input into setting quality standards and
specifications.
The hospitality marketer will certainly be responsible
for handling relationships with external marketing
communication and marketing research agencies.
Trends and developments affecting suppliers can, inturn, seriously affect a companys marketing plan
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3.4.3 Suppliers
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3.4.4 Intermediaries
Intermediaries are those companies who advise,
influence and make bookings for customers.
They include travel agents, tour operators, conference
placement agencies and incentive agencies.
Intermediaries are important links in the distribution
channel from the customer to the hospitality outlets.
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3.4.4 Intermediaries
For e.g. a wholesaler creates leisure packages that
include air transportation, ground transportation and
hotel accommodation. These packages are promoted
through newspaper advertisings and travel agents.
Through volume purchasing, the wholesaler receives
reduced prices, which enable the wholesaler to pay
the travel agent a commission for selling the product,
give customer a good price and produce a profit.
In choosing wholesalers, hotels must select
reputable firms that will deliver the promised product
to the customer and pay the hotel for their services.
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3.4.4 Intermediaries
Disintermediation:
The internet has created both disintermediation
and pricing transparency. Disintermediation is the
elimination of intermediaries.
Hotels have created their own internet
reservation systems, making them less dependent on
the travel agents and other intermediaries. Small
hotels can now distribute their products world-wide
over the internet.
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3.4.5 Competitors
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3.4.5 Competitors
For hotels, a three-star provincial business hotel
could have a local competitor set including all
three-star hotels, and possibly some two- and fourstar hotels, within a 10-mile radius or 15 minutes
travel time. Watching, knowing and anticipating
what your competitors are doing is a vital part of
knowing your market.
Competitors offering substitute products these
are offers that potential consumers can choose
instead of a hospitality product and which satisfies
the same need (e.g. Staying at home and cooking a
meal instead of going out to a restaurant).
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3.4.6 Public
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3.4.6 Public
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3.4.6 Public
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3.4.6 Public
Citizen-action public - A companys marketing
decisions may be questioned by consumer
organizations, environmental groups, minority
groups and others. Its public relations department
can help it stay in touch with consumer and citizen
groups.
Local public include neighborhood residents and
community organizations. Large companies usually
appoint a community relations officer to deal with
the community, attend meetings, answer questions
and contribute to worthwhile causes.
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3.4.6 Public
General public - The publics image of the
company affects its buying.
Inter public - This includes workers, managers,
volunteers and the board of directors. Large
companies use newsletters and other means to
inform and motivate their internal public. When
employees feel good about their company, this
positive attitude spills over to external public.
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3.5.2 Intangibility
Services are described as intangible products,
meaning that they cannot be experienced - heard,
seen, smelt, tasted or touched prior to being
purchased.
Unlike shopping for a personal stereo or buying a
motorcar, hospitality consumers cannot really
examine competing hotel, restaurant or leisure
products without entering into a purchase contract
and buying the product.
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3.5.2 Intangibility
For example, they cannot stay overnight in a hotel
and test out the rooms without being expected to
pay first. Marketing intangibles create difficulties
for the service provider.
Customers often sense a higher level of risk, and
also find it difficult to assess quality. Customers
need to be provided with information to help them
to choose an appropriate hospitality outlet to satisfy
their particular needs and wants.
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3.5.2 Intangibility
The challenge for marketers is how to provide such
information in a way that will encourage customers
to choose their offer without raising customer
expectations too high, and then failing to deliver
customer satisfaction.
The role of marketing communications in designing
effective promotional material to generate
appropriate bookings is crucial.
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3.5.3 Perishability
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3.5.3 Perishability
The key marketing principle is to ensure that the
price at peak demand times is set to deliver the
maximum return to the company, provided it is
compatible with customer satisfaction.
In low season periods, the aim is to generate
additional sales by developing attractive
promotions.
Managing the booking process to ensure that the
business achieves this balance is essential.
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3.5.4 Inseparability
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3.5.4 Inseparability
Ways to manage the problems of inseparability
include:
Ensuring that customer segments are compatible.
Ensuring that the operations system is suitable for
the projected market demand.
Adopting appropriate booking policies.
Organizing effective queuing systems
Training staff effectively.
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3.5.5 Variability
Partly as a result of inseparability, hospitality
operations suffer from considerable fluctuations in
the standards of delivery of the service. This is
called variability, and is influenced by human
factors.
Services comprise a high element of interaction
between customers and staff; indeed, every service
performance is a unique event.
Human interaction cannot be standardized, and
consequently it is impossible for service companies
to deliver a totally non-variable experience.
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3.5.5 Variability
The difficulties arising out of variability are
considerable:
Imagine that the same customers order the same
meal, which is cooked by the same chef and served
by the same staff, in the same restaurant, at the
same time of the week. The resulting meal
experience can be very different from one
week(possibly perfect) to the next (possibly
disastrous)!
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3.5.5 Variability
Companies respond to this problem of variability
by trying to standardize their operations and
training their staff to perform according to the
companys standard operating procedures ( SOPs)
but with varying degrees of success.
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3.5.6 Independence
Tourists make a variety of travel purchase decisions
in one trip, and their overall satisfaction with a visit
is based upon a complex set of evaluations of
different elements including the travel
arrangements, accommodation, attractions and
facilities of a destination. The choice of hospitality
products is only one element on which the
consumer needs to decide.
Hotel accommodation sales in particular are
influenced by the consumers choice of other
tourism products. First and foremost is the tourists
choice of destination.
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3.5.6 Independence
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THANK YOU !!
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Chapter 4
UNDERSTANDING GUESTS
Chapter 4
Understanding Guests
After completion of the chapter, the student shall be
able to understand:
Understand the core concepts of hospitality
consumer, and organizational guests, behavior.
Discuss the role of guest expectations.
Identify the factors that influence the hospitality
consumer buyer decision-making process.
Chapter 4
Understanding Guests
Explain the principles of segmenting demand in
hospitality markets.
Describe hospitality segmentation variables.
Evaluate the characteristics of hospitality target
markets.
4.1 Introduction
Today's market place has become very competitive
with thousands of hotels and restaurants.
In addition, during recent years the hospitality and
travel industries have undergone globalization.
4.1 Introduction
The result is a fiercely competitive international
market with companies fighting for their share of
consumers.
To win this battle, they invest in research that will
reveal what guests want to buy, which locations they
prefer, which amenities are important to them, how
they buy and why they buy.
4.1 Introduction
India is surely not lagging behind. The Marketing
Directors are banking on the terminology, Atithi
Devo Bhava and understanding the deeper meaning
of the word and most of all implementing it.
In order to introduce this fact in a different light, the
chapter has been as Understanding Guests and not
consumer Behaviour.
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4.1.3. Understanding
Guest Expectations
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4.1.3. Understanding
Guest Expectations
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4.1.3. Understanding
Guest Expectations
There have been a number of attempts to understand
and classify expectations. One of those schemes
suggests that there are four different types of
expectation:
1. The ideal level what can be.
2. The predicted level what will be.
3. The minimum tolerable what must be.
4. The deserved level what should be.
(This is the level that guests think is appropriate given
what they have invested in finding and buying the
product).
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4.2. Influences on
Guest Behavior
The amount of disposable income consumers have, to
spend varies according to environmental conditions.
When countries are at peace, economies are growing
and there are many employment opportunities,
consumers are more optimistic about the future.
These factors create the conditions where consumers
can enjoy real increases in disposable income and
Consumer confidence grows higher, and they are
likely to spend more on hospitality products.
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4.2. Influences on
Guest Behavior
Influences on individual consumer buyer behavior
can be categorized under three broad headings:
Socio-cultural influences,
Individual differences,
Contextual circumstances.
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3.
4.
5.
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Motivation,
2. Perception,
3. Learning,
4. Beliefs & Attitudes.
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3.
4.
5.
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1.2 Marketing:
Today marketing isnt simple business function; Its a philosophy, a way of thinking, and a way of
structuring your business and your mind. Marketing is much more than a new ad campaign. The task of
marketing is never to fool the customer or endanger the companys image. Marketings task is to provide
real value to targeted customers, motivate purchase, and fulfill consumer needs.
Marketing is the social process by which individuals and organizations obtain what they need
and want through creating and exchanging value with others.
This definition is based upon a basic marketing exchange process and recognizes the importance
of value to the customer.
Theprocess by which companies create value for customers and build strong customer
relationships in order to capture value from customers in return.
Kotler & Armstrong ( 2010)
Defining the term MARKET : A market is , the set of actual and potential buyers of a product or
services.
1.6.1 The Production Concept:The philosophy that consumers will favour products that are available,
that management should therefore focus on improving production and distribution efficiency.The
production orientation is based on conditions of mass production and limited consumer choice. This leads
to an inward-looking focus as management strives to control costs, improve quality and efficiency, and
increase volume.
1.6.2 The Product Concept:The idea that consumers favour products that offer the most quality,
performance and features, and that the organization should therefore devote its energy into making
continuous product improvements; a detailed version of the new product idea.
Companies adopting a product orientation believe that their customers can only be satisfied with a
particular type of product. Management concentrates on developing better versions of the existing
product, but fails to recognize that customers could be satisfied better by different types of products.
1.6.3 The Selling Concept:The selling concept determines that consumers will not buy enough of the
organisations products unless the organization undertakes a large scale selling and promotion
effort.Companies adopt the selling orientation when their products are competing in markets where
supply exceeds demand, and growth is low or declining.
1.6.5 The Societal Marketing Concept: The idea that the organization should determine the needs,
wants and interests of target markets and deliver the desired satisfaction more effectively and efficiently
than competitors in a way that maintains or improves the consumers and society's well-being.A societal
marketing orientation suggests that companies should become proactive in the community, adopting a
good neighbor policy in their companys best interest. Anumber of hospitality organizations have
genuinely adopted a societal marketing
2.1.1 Inseparable: Inseparable- from the point where it is consumed, and from the provider of the
service. Service inseparability also means that customers are part of the product. In most hospitality
services, both the service provider and the customer must be present for the transaction to occur.
2.1.2 Intangible: Unlike physical products, services cannot be seen, tasted, felt, heard, or smelled
before they are purchased.
2.1.3 Perishable: A major characteristic of services; they cannot be stored for later use.
2.1.4 Variable: Services are highly variable. Their quality depends on who provides them and when and
where they are provided.
2.1.5 Homogeneous: Homogeneity is where services are largely the same (the opposite of variability
above). Standardization is largely embodied by the large global brands which produce services.
Uniformed services
Housekeeping services
Food & Beverage services: This includes - Room service, Restaurant service, The Bar
service&Kitchen services.
Laundry services
Event services
Guest relation
Concierge services
2.4.1 Product - In the case of services, the "product" is intangible, heterogeneous and perishable.
Moreover, its production and consumption are inseparable.
2.4.2 Pricing Due to costs such as raw material cost, labor cost, overhead costs, Pricing of services is
tougher than pricing of goods.
2.4.3 Place - Service providers have to give special thought as to where the service is provided.
2.4.4 Promotion - Promotion is crucial in attracting customers in a segment where the services
providers have nearly identical offerings.
2.4.5 People - People are a defining factor in a service delivery process, since a service is inseparable
from the person providing it.Staff requires appropriate interpersonal skills, aptitude, and service
knowledge in order to deliver a quality service.
2.4.6 Process - The process of service delivery is crucial since it ensures that the same standard of
service is repeatedly delivered to the customers.
2.4.7 Physical Evidence - Since services are intangible in nature, most service providers strive to
incorporate certain tangible elements into their offering to enhance customer experience. Restaurants
invest heavily in their interior design and decorations to offer a tangible and unique experience to their
guests.
2.5.1 Popularity - The popularity of the hotel is how much search there is for your hotel. Its a simple
factor and can be measured through basic tools like Google Analytics or other site analytics tools. The
searches for your brand are the most qualified leads you can get and the most important long term strategy
is to increase those searches.
2.5.2 Rates / Availability - It goes without saying that your rates and availability are the number one
factor that will get you bookings (or not). In fact per Googles research (Travel Hotel Consumers of Nov
2010) 34% of the people who booked, chose a specific site as per the choice.
2.5.3Brand Protection. - No matter the popularity of your hotel (small or large) you need to protect
your brand. Remember these are your most valuable visitors. Find out how many third parties are
advertising on your name and make sure you are always before them. Additionally, there are ways you
can limit others to advertise on your name and you should demand your marketing department/agency to
take action on these.
2.5.4Design.The design of the website can be extremely creative and different from the rest of the hotel
sites or a simple one only to generate more bookings withou
3.3.1 Political: Examples include:Planning regulations, Licensing laws, Local, regional or national
government taxes, Regulation of marketing communications, Monopolies and Restrictive
Practices Act, consumer Protection Act, Labour laws. Laws related to environmental issues
3.3.2 Economic: The economic environment includes all those activities that influence the wealth and
income of the population. Examples of economic influences are: the state of the economy, the
structure of employment and the level of unemployment, the rate of inflation, the exchange rate.
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3.3.6Environmental: Environmental factors have become more important in all parts of the world
aspeople recognize the impact tourists have on the planet. In particular, mass tourismhas become much
more controversial.
3.4.2Employees: For most hospitality organizations, the local labor market is a key resource.
Theavailability and quality of skilled employees who have been educated and can beeasily trained is an
important factor in delivering a quality service. Because employeesinteract with customers, they can have
a major influence on the level of customersatisfaction.
3.4.3Suppliers: The hospitality companys performance is dependent upon its suppliers. Suppliers are
firms and individuals that provide the resources need by the company to produce its goods and services.
Trends and developments affecting suppliers can, in-turn, seriously affect a companys marketing plan.
3.4.4Intermediaries: Intermediaries are those companies who advise, influence and make bookingsfor
customers. Some of the intermediaries Marketing Intermediaries, Disintermediation, Financial
intermediaries.
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3.4.6Publics:The location of a hospitality premises and the size/scale of the company willdetermine the
character of the organizations (also called publics) with which theorganization interacts. These publics
will include: Local government authorities, other businesses and people who live in the neighborhood
(some of whom may also be customers), Community, educational, religious, social and voluntary
institutions, leisure, sporting and tourism attractions, local media.
3.5.1 Seasonality and demand fluctuation: Seasonality refers to the fluctuations and demand in
any given period. In hospitalityoperations, seasonality can occur at:Different seasons of the year,
different months of the year, different times of the week, and different times of the day.
3.5.2 Intangibility: Services are described as intangible products, meaning that they cannot be
experienced - heard, seen, smelt, tasted or touched prior to being purchased.
3.5.3 Perishability: Unlike manufactured products, which can be stored in warehouses, services cannot
be stored; this feature of service industries is called perishability. The difficulty for hospitality
companies is how to manage their capacity (the inventory) with a fluctuating demand pattern.
3.5.4 Inseparability: Customers have to be present to consume the hospitality product and the
simultaneousproduction and consumption of services means that hospitality employees are an important
part of the hospitality product.
3.5.5 Variability: Partly as a result of inseparability, hospitality operations suffer from considerable
fluctuations in the standards of delivery of the service. This is called variability, and is influenced by
human factors.
3.5.6 Interdependence: Hotel accommodation sales are influenced by the consumers choice of other
tourism products. Like, the tourists choice of destination, the ease and accessibility of transport to and
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from the area, the image of the destination, the price, and word of mouth comments. The generation of
demand for some hospitality operations is directly connected to the demand for complementary tourism
products i.e. the demand is interdependent.
3.5.7 Supply exceeds demand: The hospitality industry is frequently described as a fragmented
industry with low barriers to entry. Despite record numbers of people traveling for business and leisure
purposes, the growth in hospitality capacity has not always been matched by a sufficient growth in
demand. When supply exceeds demand the competitive environment becomes more intense, and price
competition can affect all firms profitability.
3.5.8 High fixed costs: The cost structure of hospitality firms influences marketing activity. Hospitality
businesses are capital, labor and energy intensive.The marketing response to seasonality and high fixed
costs is to design attractively priced promotions to stimulate sales in the low season.
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4.1 Introduction:
Today's market place has become very competitive with thousands of hotels and restaurants. In addition,
during recent years the hospitality and travel industries have undergone globalization. Hotel companies
headquartered in nations as diverse as Germany, U.S. and Hong Kong compete aggressively in markets
such as Singapore and Japan. The result is a fiercely competitive international market with companies
fighting for their share of consumers. To win this battle, they invest in research that will reveal what
guests want to buy, which locations they prefer, which amenities are important to them, how they buy and
why they buy.
4.1.1 Understanding Guests: Customers versus Guests. A guest implies an ongoing relationship. In
hotels, we show hospitality when we greet our guests we want them to come back, we treat them special
and make them feel welcome.
When you look at your business in the long-term, a comfort area for your guests, you make different
decisions about your business and your marketing. You make decisions based on the desire to get more
loyal guests to come in because they are going to be spending more money in your hotel over their
lifetime.
4.1.2 Knowing vs. Understanding Your Guests: Knowing your guests -- information typically
collected by a business -- means you know who they are demographically, what content they're
reading, and so on. Most companies do a good job on this front.
When it comes to understanding guests, however, many companies come up short. Understanding guests
helps businesses deliver a product with meaningful and compelling value propositions that meet not only
their current needs but also their evolving and future needs.
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The company that really understands how consumers will respond to different product features,
prices and advertising appeals has a great advantage over its competitors. As a result, researchers
from companies and universities are constantly studying the relationship between marketing
stimuli and consumer response. Their starting point is the model of buyer behavior.
4.2.1 Cultural characteristics affecting consumer behavior: Culture is the most basic
determinant of a persons wants and behavior. It comprises the basic values, perceptions, wants
and behaviours that a person learns continuously in a society. Subculture, social class, social
factors, internet networking, family, roles and status, are all the characteristics falling under
cultural factors affecting buyer behavior.
4.2.2Personal factors: A buyer's decisions are also influenced by personal characteristics such as age,
life-cycle stage, occupation, economic situation, lifestyle, personality and self-concept.
4.2.3 Psychological factors: A person's buying choices are also influenced by four major
psychological factors Motivation, perception, learning, beliefs & attitudes.
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opportunity to sell the customer. A company must also gather information about competitors and plan a
differentiated appeal.
Marketers should carefully identify consumers' sources of information and the importance of each source.
Consumers should be asked how they first heard about the brand, what information they received and the
importance they place on different information sources. This information is helpful in preparing effective
communication.
3. EVALUATION OF ALTERNATIVES
We have seen how the consumer uses information to arrive at a set of final brand choices. But how does
the consumer choose among the alternatives? How does the consumer mentally sort and process
information to arrive at brand choices? Unfortunately there is no simple and single evaluation process
used by all consumers or even by one consumer in all buying situations. There are several evaluation
processes. The consumer arrives at attitudes toward the different brands through some evaluation
procedure. One or more of several evaluation procedures are used, depending on the consumer and the
buying decision.
4. PURCHASE DECISION
In the evaluation stage, the consumer ranks brands in the choice set and forms purchase intentions.
Generally, the consumer buys the most preferred brand, but two factors can come between the purchase
intention and purchase decision which are Attitude of others & Unexpected situational factors.
Purchase intention is influenced by unexpected situations.
5. POSTPURCHASE BEHAVIOR
The marketer's job does not end when the customer buys a product. Following a purchase, the consumer
will be satisfied or dissatisfied and will engage in post-purchase actions of significant interest to the
marketer. What determines post-purchase satisfaction or dissatisfaction with a purchase? The answer lies
in the relationship between consumer expectations and perceived product performance. If the product
matches expectations, the consumer will be satisfied. If it falls short, the consumer will face
dissatisfaction.
Understanding the consumers' needs and buying process is the foundation of successful marketing. By
understanding how buyers proceed through problem recognition, information search, evaluation of
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alternatives, the purchase decision and post purchase behavior, marketers can acquire many clues as to
how better meet buyer needs. By understanding the various participants in the buying process and major
influences on buying behavior, marketers can develop a more effective marketing program.
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