Chapter 1

Introduction: Marketing
for Hospitality and
Tourism
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens

2002 Pearson Education, Inc.

Upper Saddle River, NJ 07458

The Purpose of a
Business Is to Create
and Retain the Right
Customer

Marketing for Hospitality and Tourism, 3e

Philip Kotler, John Bowen, James Makens

2002 Pearson Education, Inc.

Upper Saddle River, NJ 07458

The Four Ps
Marketing
Mix
Place

Product

(Distribution)

Price

Marketing for Hospitality and Tourism, 3e

Philip Kotler, John Bowen, James Makens

Promotion

2002 Pearson Education, Inc.

Upper Saddle River, NJ 07458

The Promotional Mix

Advertising
Sales promotion
Packaging
Personal selling
Public relations

Marketing for Hospitality and Tourism, 3e

Philip Kotler, John Bowen, James Makens

2002 Pearson Education, Inc.

Upper Saddle River, NJ 07458

Defining Marketing
Marketing is a societal process by
which individuals and groups obtain
what they need and want through
creating, offering, and exchanging
products and value with others.

Marketing for Hospitality and Tourism, 3e

Philip Kotler, John Bowen, James Makens

2002 Pearson Education, Inc.

Upper Saddle River, NJ 07458

Core Marketing Concepts

Needs, wants,
and demands
Markets

Exchange,
transactions,
and relationships
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens

Products

Value,
satisfaction,
and quality
2002 Pearson Education, Inc.
Upper Saddle River, NJ 07458

Need, Wants, Demands

Need. A human need is a state of felt
deprivation. Examples include the need for
food, clothing, warmth and safety.
Wants. Wants are how people communicate
their needs. A hungry person may want a
hamburger, noodles, or cheese and bread.
Demands. When backed by buying power,
wants become demands.

Marketing for Hospitality and Tourism, 3e

Philip Kotler, John Bowen, James Makens

2002 Pearson Education, Inc.

Upper Saddle River, NJ 07458

Product
A product is anything that can be offered to satisfy a
need or a want.

Marketing for Hospitality and Tourism, 3e

Philip Kotler, John Bowen, James Makens

2002 Pearson Education, Inc.

Upper Saddle River, NJ 07458

Value, Satisfaction, and

Quality
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.
Customer satisfaction depends on a products
perceived performance in delivering value
relative to a buyers expectations.
Quality begins with customer needs and ends
with customer satisfaction.
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens

2002 Pearson Education, Inc.

Upper Saddle River, NJ 07458

Satisfaction and Customer Behavior

70

63 65

60
Percent

50
40

Definitely Recommend

30

30

Definitely Return

25

20

10

10
0
1

1 = Very Satisfied, 7=Very Dissatisfied

* Even though 3 is still a "positive"
score on the above 7 point scale, few
customers giving that rating will return

Marketing for Hospitality and Tourism, 3e

Philip Kotler, John Bowen, James Makens

2002 Pearson Education, Inc.

Upper Saddle River, NJ 07458

10

Why Satisfaction May Not Lead

To Customer Loyalty
Some customers never return to an area but they can
still recommend
Some customers shop for the best price - differentiate
your product
Some customers like to have different purchase
experiences like to stay or dine at different places

Marketing for Hospitality and Tourism, 3e

Philip Kotler, John Bowen, James Makens

2002 Pearson Education, Inc.

Upper Saddle River, NJ 07458

11

Why Managers Should Be Concerned

About Customer Loyalty
Customer loyalty leads to increased
profit
Customer loyalty leads to increased
partnership
Lower marketing and sales costs
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens

2002 Pearson Education, Inc.

Upper Saddle River, NJ 07458

12

Exchange, Transactions, and

Relationships
Exchange is the act of obtaining a desired object
from someone by offering something in return.
A transaction is marketings unit of measurement
and consists of a trade of values between two
parties.
Relationship marketing builds relationships with
valued customers, distributors, dealers, and
suppliers by promising and consistently delivering
high-quality products, good service, and fair
prices.

Marketing for Hospitality and Tourism, 3e

Philip Kotler, John Bowen, James Makens

2002 Pearson Education, Inc.

Upper Saddle River, NJ 07458

13

Importance of Customer
Retention
5%

increase adds 25 - 125% to bottom

line

Marketing for Hospitality and Tourism, 3e

Philip Kotler, John Bowen, James Makens

2002 Pearson Education, Inc.

Upper Saddle River, NJ 07458

14

The Life Time Value of the

Customer
Revenue and profits by average customer
over a lifetime by segment
Increase average purchase, frequency of
visit, life

Marketing for Hospitality and Tourism, 3e

Philip Kotler, John Bowen, James Makens

2002 Pearson Education, Inc.

Upper Saddle River, NJ 07458

15

Example
Corporate business traveler - 4x a year,
2 nights per visit, $200 per visit = $800
a year
Average life is 4 years
4 yrs x $800 = $3200 lifetime value

Marketing for Hospitality and Tourism, 3e

Philip Kotler, John Bowen, James Makens

2002 Pearson Education, Inc.

Upper Saddle River, NJ 07458

16

Markets

AAmarket
market isis aaset
set of
of actual
actualand
and potential
potentialbuyers
buyers
who
whomight
might transact
transact with
with aaseller.
seller.

Marketing for Hospitality and Tourism, 3e

Philip Kotler, John Bowen, James Makens

2002 Pearson Education, Inc.

Upper Saddle River, NJ 07458

17

Marketing and Sales Concepts

Contrasted
Starting
Point

Focus

Factory

Existing
Products

Means

Ends

Selling
and
Promoting

Profits
through
Volume

The
The Selling
Selling Concept
Concept

Market

Customer
Needs

Integrated
Marketing

Profits
through
Satisfaction

The
The Marketing
Marketing Concept
Concept
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens

2002 Pearson Education, Inc.

Upper Saddle River, NJ 07458

18

Marketing Management
Philosophies
Production Concept

Consumers favor products that are

available and highly affordable.

Improve production and distribution.

Product Concept

Consumers favor products that offer

the most quality, performance, and
innovative features.

Selling Concept

Consumers will buy products only if

the company promotes/ sells these
products.

Marketing Concept
Societal Marketing Concept
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens

Focuses on needs/ wants of target

markets & delivering satisfaction
better than competitors.
Focuses on2002
needs/
wants of target 19
Pearson Education, Inc.
markets &
delivering
Upper
Saddle River,superior
NJ 07458 value.

Marketings Future
It (marketing) encompasses the entire
business. It is the whole business seen
from the point of view of the final result,
that is, from the customers point of
view.
Peter Drucker

Marketing has become the job of

everyone.
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens

2002 Pearson Education, Inc.

Upper Saddle River, NJ 07458

20