MARKETING IN PRACTICE

1. MARKETING IN PRACTICE

2. Marketing in Practice: Learning Outcomes At the end of this module, you will Have a good understanding of the main concepts addressed within the module. Be able to apply these concepts in the hotel context. Be aware of both the strengths and limitations of different approaches to marketing in practice in the hotel industry.

3. TODAY’S LEARNING MARKETING – INTRODUCTION, DEFINITIONS AND EXAMPLES MARKETING RESEARCH BASICS MARKET SEGMENTATION/TARGETING AND POSITIONING UNDERSTANDING YOUR MARKET- SWOT ANALYSIS, PEST ANALYSIS TRENDS AND UNCERTAINTIES

4. MARKETING – INTRODUCTION, DEFINITIONS AND EXAMPLES

5. A social definition of marketing Aprocess in all societies by which individuals and groups obtain what they need and want through creating, offering and freely exchanging products and services of value with others.

6. A management definition It is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational goals.

7. EXERCISE: Marketing Hotels Look at both the social and management definitions of marketing. From your experience, which is more like what you do to market your hotel or department?

8. Marketing Concept The marketing concept is the philosophy that hotel firms should analyze the needs of their customers and then make decisions to satisfy those needs, better than the competition.

9. Marketing Is applicable to hotel and restaurant businesses whether they are big and small. Involves the planning and implementation of most everything an hotel does to facilitate an exchange between itself and its guests.

10. Marketing • Is a continuous and dynamic strategic decision-making process. • Is a strategic process that matches the hotel’s strengths and resources to potential opportunities that exist within the marketing environment.

11. Marketing as a Business Philosophy Four orientations or business philosophies: Product Orientation – a focus on making products widely available, affordable, and require little selling effort Investment in hotel inventory without reference to demand

12. Marketing as a Business Philosophy 2 2.Sales Orientation - promotes the business philosophy of “selling what we make” Filling hotel rooms at whatever price we can get – judging performance on occupancy rates rather than revenue or REVPAR Focus on volume rather than quality

13. Marketing as a Business Philosophy 3 Market Orientation – involves Customer focus Coordinated marketing effort Long-term success Knowing your guests and understanding their needs Taking a long-term view of occupancy, revenue and profit Using effective guest and yield management systems

14. Marketingas a Business Philosophy 4 4. Relationship Marketing Orientation - creates and sustain mutually satisfying long-term relationships with not only its guests but with other key stakeholders such as employees, suppliers, distributors, retailers and the community Focus on repeat customers and customer loyalty Retaining price and brand integrity Use of internal marketing with staff Using socially responsible business practices

15. Are marketing and sales the same thing? ABSOLUTELY NOT!! Marketing is selling + + + - a lot more!! If you are good at sales you will not necessarily be good at marketing Marketing does involve sales but also includes research, product and service planning, promotion, distribution and pricing Famous guru Ted Levitt of Harvard says that selling focuses on the needs of the seller (filling rooms, meeting targets) while marketing focuses on the needs of the buyer (satisfaction)

16. Marketing and Selling

17. EXERCISE: What market orientation? A resort within the Beautiful Hotels Portfolio is faced with the aftermath of a terrorist outrage close to the property. The Executive Team meet and come up with a number of responses to the crisis. What would you say each of them represent in terms of the 4 marketing philosophies?

18. Cut prices by 50% in order to retain occupancy and market share Offer all repeat visitors an automatic up-grade and complimentary champagne dinner for two Invest in the training of all staff with the “We’re all marketeers” programme Cut staff and services drastically to reduce costs in the short-term Sign up with a European low-cost carrier to offer value-for-money all inclusive packages

19. Do “normal” marketing rules apply to hotels? Argument that services, including hotels, need a different approach to marketing Most marketing theory and ideas come from the marketing of products, things we can hold in our hands and buy in shops We can clearly see that most hotels (maybe not bottom of the range budget properties) are a lot more than the sum of their physical assets – beds, TVs, showers, restaurant tables etc.

20. Difference between physical goods and services

21. Characteristics of Services Intangibility Inseparability Perishability Variability

22. EXERCISE: Hotel marketing in practice In groups of 3 or 4, select THREE of the hotel service characteristics and identify some of the their consequences for the marketing of a) a beach resort hotel b) an airport hotel

23. Hotel Service Characteristics Hotel services cannot be inventoried Hotel services are time dependent Hotel services are place dependent Consumers are always involved in the production process Hotel services cannot be quality controlled at the factory gate There is a direct human role in hotel service mediation

24. MARKETING RESEARCH BASICS

25. What is Market Research? Simply a matter of finding out as much as you can before committing yourself to an irretrievable step When you do not have answers through your own analysis of the environment within which your hotel operates

26. What to find out? What does the customer need? Who is the target audience and how much can you find out about them? What is the competition? Are there any gaps in the market? Would your hotel and its services be able to fill that gap? Would your hotel and its services be acceptable in the market?

27. Market Research and the Hotel Manager You don’t really need to know HOW to undertake market research BUT It is important to understand the methods because You may be responsible for commissioning market research You need to know what you are buying You do need to read market research reports and interpret them and their limitations!

28. The Components of Market Research

29. Secondary Research

30. EXERCISE: What do I know about my hotel? List all the formal INTERNAL sources of information you have available to you about your hotel or your company Share the lists with your neighbour and consider why your lists are a) very similar, or b) have some clear differences

31. Internal Sources Company accounts Internal reports and analysis Stock analysis Daily performance data (financial, occupancy, REVPAR) by market segment Guest loyalty cards Repeat visitation data Guest spending data Can you think of other sources?

32. External Sources Government statistics Statistics from international agencies - UNWTO Hotel trade publications Commercial data and reports (generally expensive) Other hotel firms’ research Research documents – publications, journals, etc.

33. Sampling Methods

34. Sampling Methods Random Samples– equal chance of anyone being picked May select those not in the target group – indiscriminate Sample sizes may need to be large to be representative Can be very expensive

35. Sampling Methods 2 Stratified or Segment Random Sampling Samples on the basis of a representative strata or segment Still random but more focussed May give more relevant information May be more cost effective

36. Sampling Methods 3 Quota Sampling Again – by segment Not randomly selected Specific number on each segment are interviewed, etc. May not be fully representative Cheaper method

37. Sampling Methods 4 Cluster Sampling Primarily based on geographical areas or ‘clusters’ that can be seen as being representative of the whole population Multi-Stage Sampling Sample selected from multi-stage sub-groups Snowball Sampling Samples developed from contacts of existing customers – ‘word of mouth’ type approach!

38. Primary Research

39. Primary Research First hand information Expensive to collect, analyse and evaluate especially in the international markets within which many hotels operate – use of tourist board studies rather than hotel-specific research Can be highly focussed and relevant Care needs to be taken with the approach and methodology to ensure accuracy Types of question – closed – limited information gained; open – useful information but difficult to analyse

40. Primary Research 2 Quantitative and Qualitative Information Quantitative– based on numbers (56% of British holiday makers prefer all-inclusive vacations) but does not always tell you why, when, how Qualitative – more detail – can tell you why, when and how!

41. Purpose

42. Advantages of Market Research Helps focus attention on objectives Aids forecasting, planning and strategic development May help to reduce risk of new product development Communicates image, vision, etc. May identify new training needs (heath food trends, languages) Globalisation makes market information valuable

43. Disadvantages of Market Research Information only as good as the methodology used Can be inaccurate or unreliable Results may not be what the business wants to hear! May stifle creativity, initiative and ‘gut feeling’ Always a problem that we may never know enough to be sure!

44. MARKET SEGMENTATION,TARGETING AND POSITIONING

45. STP – a three stage process • Segmenting – dividing up the market into different groups • Targeting – selecting a segment to target • Positioning – developing a marketing strategy which positions the product in relation to rivals in order to appeal to market segments

46. What is Market Segmentation? The breaking down or building up of potential buyers into groups called Market Segments

47. EXERCISE: Segmenting your market Thinking about the market that uses your hotel is segmented How many major segments can you think of? What criteria did you use to segment them in your mind? Are there other criteria that you could have used

48. Segmenting your Market Wide variety of criteria that you could have used: Age Gender Nationality (probably the most common in hotels) Purpose of visit (business, leisure and leisure interests)

49. Benefits of Market Segmentation Identifies opportunities for new product development 2. Helps design marketing programmes most effective for reaching homogenous groups of buyers 3. Improves allocation of marketing resources

50. Market Segmentation Variables Demographic Behavioural Market Segmentation Variables Psychographic Geographical