HMGT 3300Marketing exam review 1-6

Chapter 1: Introduction: Marketing for Hospitality and Tourism Chapter Outline I. Introduction: Marketing in the Hospitality Industry A. Customer orientation. The purpose of a business is to create and maintain profi ...

Chapter 1: Introduction: Marketing for Hospitality and Tourism Chapter Outline I. Introduction: Marketing in the Hospitality Industry A. Customer orientation. The purpose of a business is to create and maintain profitable customers. Customer satisfaction leading to profit is the central goal of hospitality marketing. II. What Is Hospitality Marketing? Marketing is the art and science of finding, retaining, and growing profitable customers. Importance of Marketing A. The entrance of corporate giants into the hospitality market and the marketing skills these companies have brought to the industry have increased the importance of marketing within the industry. B. Analysts predict that the hotel industry will consolidate in much the same way as the airline industry has, with five or six major chains dominating the market. Such consolidation will create a market that is highly competitive. The firms that survive this consolidation will be the ones that understand their customers. C. In response to growing competitive pressures, hotel chains are relying on the expertise of the marketing director. IV. Travel Industry Marketing A. Successful hospitality marketing is highly dependent on the entire travel industry. B. Government or quasi-government agencies play an important role in travel industry marketing through legislation aimed at enhancing the industry and through promotion of regions, states, and nations. C. Few industries are as interdependent as the travel and hospitality industries. V. Marketing Process. The marketing process is a five-step model of the marketing process. In the first four steps, companies work to understand consumers, create customer value, and build strong customer relationships. In the final step, companies reap the rewards of creating superior customer value. By creating value for customers, they in turn capture value from customers in the form of sales, profits, and long-term customer equity. A. Understand customers 1. Needs. Human beings have many complex needs. These include basic physical needs for food, clothing, warmth, and safety; social needs for belonging, affection, fun, and relaxation; esteem needs for prestige, recognition, and fame; and individual needs for knowledge and selfexpression. 2. Wants. Wants are how people communicate their needs. 3. 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 demand. 4. Market offerings. Some combination of tangible products, services, information, or experiences that are offered to the market. 5. Value, expectations, and satisfaction a. Customer value is the difference between the benefits that the customer gains from owning and/or using a product and the costs of obtaining the product. b. Customer expectations are based on past buying experiences, the opinions of friends, and market information. c. Satisfaction. Satisfaction with a product is determined by how well the product meets the customer’s expectations for that product. 6. Exchange and relationships a. Exchange. Exchange is the act of obtaining a desired object from someone by offering something in return. b. Relationship marketing. Relationship marketing focuses on building a relationship with a company’s profitable customers. Most companies are finding that they earn a higher return from resources invested in getting repeat sales from current customers than from money spent to attract new customers. c. Designing customer-driven marketing strategy. Marketing management is the art and science of choosing target markets and building profitable relationships with them. i. Selecting customers to serve. The company must select those market segments it wishes to serve. ii. Choosing a value proposition. The company must also decide how it will serve targeted customers—how it will differentiate and position itself in the marketplace. A company’s value proposition is the set of benefits or values it promises to deliver to consumers to satisfy their needs. VI. Five Marketing Management Philosophies A. Production concept. The production concept holds that customers will favor products that are available and highly affordable, and therefore management should focus on production and distribution efficiency. B. Product concept. The product concept holds that customers prefer existing products and product forms, and the job of management is to develop good versions of these products. C. 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. D. Marketing concept. The marketing concept holds that achieving organizational goals depends on determining the needs and wants of target