Contents

PART ONE

THE EVOLVING DISCIPLINE OF MARKETING 10

ROLES OF MARKETING 7
THE MARKETING PROCESS 9
Strategic marketing analysis 10
MARKET SEGMENTS 10
MARKET NICHES 10
MARKETING TO INDIVIDUALS 11
POSITIONING 11
Marketing-mix planning 12
PRODUCT 12
Product development.12
Packaging and branding 13
Marketing a service product 14
PRICE 14
PLACE 15
PROMOTION 16
Sales force 16
Advertising 17
Sales promotion 17
Public relations 18
Marketing implementation. 19
Marketing evaluation and control 20
MARKETING CONTROL 20
Annual-plan control. 20
Profitability control 21

3
 Efficiency control. 22
Strategic control 22
MARKETING AUDIT 23
THE MARKETING ACTORS 24
Customers 24
CONSUMER CUSTOMERS 27
Factors influencing consumers. 27
Consumer buying tasks.29
The consumer buying process 31
BUSINESS CUSTOMERS 32
Marketing intermediaries:the distribution channel
35
WHOLESALERS 40
Merchant wholesalers 40.
Brokers and agents 42
Manufacturers' and retailers' branches and offices 43
RETAILERS44
The history of retailing 44
Store retailers 46.
Nonstore retailers.
Retail organizations. 54
Marketing facilitators 57
ADVERTISING AGENCIES 58
MARKET RESEARCH FIRMS 59
TRANSPORTATION FIRMS 60
WAREHOUSING FIRMS 61
MARKETING IN DIFFERENT SECTORS 61
ECONOMIC AND SOCIAL ASPECTS OF
MARKETING 74

4
 PART TWO

Tourism - The Worlds Biggest Industry 79

The Business of Hotels 80
 The Importance of Hotels 81
Travel and Hotels 83
Two Centuries of Hotelkeeping 84
Hotel Location 86
Types of Hotel 88
Hotel Products and Markets 92
 The Hotel as a Total Market Concept 92
 Hotel Facilities and Services as Products 94
 Hotel Accommodation Markets 95
 Hotel Catering Markets 97
 Hotel Demand Generating Sources 99
 Hotel Market Areas 100
 Hotel Market Segmentation 101
 Buying and Paying for Hotel Services 105
 Hotel Marketing Orientation 106
 Special Features of Hotel Marketing 107
 Property Ownership 109
 Property Operation and Maintenance 111

Hotel Organization 112

5
 Rooms 115
 Food and Beverage 117
 Miscellaneous Guest Services 119
 Hotel Support Services 120
 The Management Structure 122
Hotel Services 123
Rooms and Beds 125
Room Sales 127
Mail and Other Guest Services 127
 Uniformed Services 129
 Hotel Housekeeping 131
 Food and Drink 133
 Restaurants 134
 Miscelaneous Guest Services 142
Tourist Attractions 143
Tourism Today 145
Local Tours 146
Paris 146
Foreign Tours 165
The Bahamas 165

6
 ENGLISH COURSE FOR ECTS AND
MANAGEMENT

Marketing and merchandising

Marketing is a process whose principal function is to

promote and facilitate exchange. Through marketing,
individuals and groups obtain what they need and want by
exchanging products and services with other parties. Such a
process can occur only when there are at least two parties, each
of whom has something to offer. In addition, exchange cannot
occur unless the parties are able to communicate about and to
deliver what they offer. Marketing is not a coercive process: all
parties must be free to accept or reject what others are offering.
So defined, marketing is distinguished from other modes of
obtaining desired goods, such as through self-production,
begging, theft, or force. Marketing is not confined to any
particular type of economy, because goods must be exchanged
and therefore marketed in all economies and societies except
perhaps in the most primitive. Furthermore, marketing is not a
function that is limited to profit-oriented business; even such
institutions as hospitals, schools, and museums engage in some
forms of marketing. Within the broad scope of marketing,
merchandising is concerned more specifically with promoting

7
the sale of goods and services to consumers (i.e., retailing) and
hence is more characteristic of free-market economies.
Based on these criteria, marketing can take a variety of
forms: it can be a set of functions, a department within an
organization, a managerial process, a managerial philosophy,
and a social process.

THE EVOLVING DISCIPLINE OF MARKETING

The marketing discipline had its origins in the early 20th

century as an offspring of economics. Economic science had
neglected the role of middlemen and the role of functions other
than price in the determination of demand levels and
characteristics. Early marketing economists examined
agricultural and industrial markets and described them in
greater detail than the classical economists. This examination
resulted in the development of three approaches to the analysis
of marketing activity: the commodity, the institution, and the
function.
Commodity analysis studies the ways in which a product or
product group is brought to market. A commodity analysis of
milk, for example, traces the ways in which milk is collected at
individual dairy farms, transported to and processed at local
dairy cooperatives, and shipped to grocers and supermarkets for
consumer purchase. Institutional analysis describes the types of
businesses that play a prevalent role in marketing, such as
wholesale or retail institutions. For instance, an institutional
analysis of clothing wholesalers examines the ongoing concerns
that wholesalers face in order to ensure both the correct supply
for their customers and the appropriate inventory and shipping

8
capabilities. Finally, a functional analysis examines the general
tasks that marketing performs. For example, any marketing
effort must ensure that the product is transported from the
supplier to the customer. In some industries, this transportation
function may be handled by a truck, while in others it may be
done by mail, facsimile, television signal, or airline. All these
institutions perform the same function.
As the study of marketing became more prevalent
throughout the 20th century, large companies--particularly
mass consumer manufacturers--began to recognize the
importance of market research, better product design, effective
distribution, and sustained communication with consumers in
the success of their brands. Marketing concepts and techniques
later moved into the industrial-goods sector and subsequently
into the services sector. It soon became apparent that
organizations and individuals market not only goods and
services but also ideas (social marketing), places (location
marketing), personalities (celebrity marketing), events (event
marketing), and even the organizations themselves (public
relations).

ROLES OF MARKETING

As marketing developed, it took a variety of forms. It was

noted above that marketing can be viewed as a set of functions
in the sense that certain activities are traditionally associated
with the exchange process. A common but incorrect view is
that selling and advertising are the only marketing activities.

9
Yet, in addition to promotion, marketing includes a much
broader set of functions, including product development,
packaging, pricing, distribution, and customer service.
Many organizations and businesses assign responsibility for
these marketing functions to a specific group of individuals
within the organization. In this respect, marketing is a unique
and separate entity. Those who make up the marketing
department may include brand and product managers,
marketing researchers, sales representatives, advertising and
promotion managers, pricing specialists, and customer service
personnel.
As a managerial process, marketing is the way in which an
organization determines its best opportunities in the
marketplace, given its objectives and resources. The marketing
process is divided into a strategic and a tactical phase. The
strategic phase has three components--segmentation, targeting,
and positioning (STP). The organization must distinguish
among different groups of customers in the market
(segmentation), choose which group(s) it can serve effectively
(targeting), and communicate the central benefit it offers to that
group (positioning). The marketing process includes designing
and implementing various tactics, commonly referred to as the
"marketing mix," or the "4 Ps": product, price, place (or
distribution), and promotion. The marketing mix is followed by
evaluating, controlling, and revising the marketing process to
achieve the organization's objectives The
managerial philosophy of marketing puts central emphasis on
customer satisfaction as the means for gaining and keeping
loyal customers. Marketers urge their organizations to carefully
and continually gauge target customers' expectations and to

10
consistently meet or exceed these expectations. In order to
accomplish this, everyone in all areas of the organization must
focus on understanding and serving customers; it will not
succeed if all marketing occurs only in the marketing
department. Marketing, consequently, is far too important to be
done solely by the marketing department. Marketers also want
their organizations to move from practicing transaction-
oriented marketing, which focuses on individual exchanges, to
relationship-driven marketing, which emphasizes serving the
customer over the long term. Simply getting new customers and
losing old ones will not help the organization achieve its
objectives. Finally, marketing is a social process that occurs in
all economies, regardless of their political structure and
orientation. It is the process by which a society organizes and
distributes its resources to meet the material needs of its
citizens. However, marketing activity is more pronounced
under conditions of goods surpluses than goods shortages.
When goods are in short supply, consumers are usually so
desirous of goods that the exchange process does not require
significant promotion or facilitation. In contrast, when there are
more goods and services than consumers need or want,
companies must work harder to convince customers to
exchange with them.

THE MARKETING PROCESS

The marketing process consists of four elements: strategic

marketing analysis, marketing-mix planning, marketing
implementation, and marketing control.

11
 Strategic marketing analysis

MARKET SEGMENTS

The aim of marketing in profit-oriented organizations is to

meet needs profitably. Companies must therefore first define
which needs--and whose needs--they can satisfy. For example,
the personal transportation market consists of people who put
different values on an automobile's cost, speed, safety, status,
and styling. No single automobile can satisfy all these needs in
a superior fashion; compromises have to be made. Furthermore,
some individuals may wish to meet their personal
transportation needs with something other than an automobile,
such as a motorcycle, a bicycle, or a bus or other form of public
transportation. Because of such variables, an automobile
company must identify the different preference groups, or
segments, of customers and decide which group(s) they can
target profitably.

MARKET NICHES

Segments can be divided into even smaller groups, called

subsegments or niches. A niche is defined as a small target
group that has special requirements. For example, a bank may
specialize in serving the investment needs of not only senior
citizens but also senior citizens with high incomes and perhaps

12
even those with particular investment preferences. It is more
likely that larger organizations will serve the larger market
segments (mass marketing) and ignore niches. As a result,
smaller companies typically emerge that are intimately familiar
with a particular niche and specialize in serving its needs.

MARKETING TO INDIVIDUALS

A growing number of companies are now trying to serve

"segments of one." They attempt to adapt their offer and
communication to each individual customer. This is
understandable, for instance, with large industrial companies
that have only a few major customers. For example, The
Boeing Company (United States) designs its 747 planes
differently for each major customer, such as United Airlines,
Inc., or American Airlines, Inc. Serving individual customers is
increasingly possible with the advent of database marketing,
through which individual customer characteristics and purchase
histories are retained in company information systems. Even
mass-marketing companies, particularly large retailers and
catalog houses, compile comprehensive data on individual
customers and are able to customize their offerings and
communications.

POSITIONING

A key step in marketing strategy, known as positioning,

involves creating and communicating a message that clearly
establishes the company or brand in relation to competitors.

13
Thus, Volvo Aktiebolaget (Sweden) has positioned its
automobile as the "safest," and Daimler-Benz AG (Germany),
manufacturer of Mercedes-Benz vehicles, has positioned its car
as the best "engineered." Some products may be positioned as
"outstanding" in two or more ways. However, claiming
superiority along several dimensions may hurt a company's
credibility because consumers will not believe that any one
offering can excel in all dimensions. Furthermore, although the
company may communicate a particular position, customers
may perceive a different image of the company as a result of
their actual experiences with the company's product or through
word of mouth.

Marketing-mix planning

Having developed a strategy, a company must then decide

which tactics will be most effective in achieving strategy goals.
Tactical marketing involves creating a marketing mix of four
components--product, price, place, promotion--that fulfills the
strategy for the targeted set of customer needs.

PRODUCT

Product development.

The first marketing-mix element is the product, which

refers to the offering or group of offerings that will be made
available to customers. In the case of a physical product, such
as a car, a company will gather information about the features
and benefits desired by a target market. Before assembling a

14
product, the marketer's role is to communicate customer desires
to the engineers who design the product or service. This is in
contrast to past practice, when engineers designed a product
based on their own preferences, interests, or expertise and then
expected marketers to find as many customers as possible to
buy this product. Contemporary thinking calls for products to
be designed based on customer input and not solely on
engineers' ideas.
In traditional economies, the goods produced and consumed
often remain the same from one generation to the next--
including food, clothing, and housing. As economies develop,
the range of products available tends to expand, and the
products themselves change. In contemporary industrialized
societies, products, like people, go through life cycles: birth,
growth, maturity, and decline. This constant replacement of
existing products with new or altered products has significant
consequences for professional marketers. The development of
new products involves all aspects of a business--production,
finance, research and development, and even personnel
administration and public relations.

Packaging and branding.

Packaging and branding are also substantial components in

the marketing of a product. Packaging in some instances may
be as simple as customers in France carrying long loaves of
unwrapped bread or small produce dealers in Italy wrapping
vegetables in newspapers or placing them in customers' string
bags. In most industrialized countries, however, the packaging

15
of merchandise has become a major part of the selling effort, as
marketers now specify exactly the types of packaging that will
be most appealing to prospective customers. The importance of
packaging in the distribution of the product has increased with
the spread of self-service purchases--in wholesaling as well as
in retailing. Packaging is sometimes designed to facilitate the
use of the product, as with aerosol containers for room
deodorants. In Europe such condiments as mustard,
mayonnaise, and ketchup are often packaged in tubes. Some
packages are reusable, making them attractive to customers in
poorer countries where metal containers, for instance, are often
highly prized.

Marketing a service product.

The same general marketing approach about the product

applies to the development of service offerings as well. For
example, a health maintenance organization (HMO) must
design a contract for its members that describes which medical
procedures will be covered, how much physician choice will be
available, how out-of-town medical costs will be handled, and
so forth. In creating a successful service mix, the HMO must
choose features that are preferred and expected by target
customers, or the service will not be valued in the marketplace.

PRICE

The second marketing-mix element is price. Ordinarily

companies determine a price by gauging the quality or
performance level of the offer and then selecting a price that

16
reflects how the market values its level of quality. However,
marketers also are aware that price can send a message to a
customer about the product's presumed quality level. A
Mercedes-Benz vehicle is generally considered to be a high-
quality automobile, and it therefore can command a high price
in the marketplace. But, even if the manufacturer could price its
cars competitively with economy cars, it might not do so,
knowing that the lower price might communicate lower quality.
On the other hand, in order to gain market share, some
companies have moved to "more for the same" or "the same for
less" pricing, which means offering prices that are consistently
lower than those of their competitors. This kind of discount
pricing has caused firms in such industries as airlines and
pharmaceuticals (which used to charge a price premium based
on their past brand strength and reputation) to significantly
reevaluate their marketing strategies.

PLACE

Place, or where the product is made available, is the third

element of the marketing mix and is most commonly referred to
as distribution. When a product moves along its path from
producer to consumer, it is said to be following a channel of
distribution. For example, the channel of distribution for many
food products includes food-processing plants, warehouses,
wholesalers, and supermarkets. By using this channel, a food
manufacturer makes its products easily accessible by ensuring
that they are in stores that are frequented by those in the target
market. In another example, a mutual funds organization makes
its investment products available by enlisting the assistance of

17
brokerage houses and banks, which in turn establish
relationships with particular customers. However, each channel
participant can handle only a certain number of products: space
at supermarkets is limited, and investment brokers can keep
abreast of only a limited number of mutual funds. Because of
this, some marketers may decide to skip steps in the channel
and instead market directly to buyers through direct mail,
telemarketing, door-to-door selling, shopping via television (a
growing trend in the late 20th century), or factory outlets.

PROMOTION

Promotion, the fourth marketing-mix element, consists of

several methods of communicating with and influencing
customers. The major tools are sales force, advertising, sales
promotion, and public relations.

Sales force.

Sales representatives are the most expensive means of

promotion, because they require income, expenses, and
supplementary benefits. Their ability to personalize the
promotion process makes salespeople most effective at selling
complex goods, big-ticket items, and highly personal goods--
for example, those related to religion or insurance. Salespeople
are trained to make presentations, answer objections, gain
commitments to purchase, and manage account growth. Some
companies have successfully reduced their sales-force costs by
replacing certain functions (for example, finding new

18
customers) with less expensive methods (such as direct mail
and telemarketing).

Advertising.

Advertising includes all forms of paid, nonpersonal

communication and promotion of products, services, or ideas
by a specified sponsor. Advertising appears in such media as
print (newspapers, magazines, billboards, flyers) or broadcast
(radio, television). Print advertisements typically consist of a
picture, a headline, information about the product, and
occasionally a response coupon. Broadcast advertisements
consist of an audio or video narrative that can range from short
15-second spots to longer segments known as infomercials,
which generally last 30 or 60 minutes.

Sales promotion.

While advertising presents a reason to buy a product, sales

promotion offers a short-term incentive to purchase. Sales
promotions often attract brand switchers (those who are not
loyal to a specific brand) who are looking primarily for low
price and good value. Thus, especially in markets where brands
are highly similar, sales promotions can cause a short-term
increase in sales but little permanent gain in market share.
Alternatively, in markets where brands are quite dissimilar,
sales promotions can alter market shares more permanently.
The use of promotions has risen considerably during the late
20th century. This is due to a number of factors within

19
companies, including an increased sophistication in sales
promotion techniques and greater pressure to increase sales.
Several market factors also have fostered this increase,
including a rise in the number of brands (especially similar
ones) and a decrease in the efficiency of traditional advertising
due to increasingly fractionated consumer markets.

Public relations.

Public relations, in contrast to advertising and sales

promotion, generally involves less commercialized modes of
communication. Its primary purpose is to disseminate
information and opinion to groups and individuals who have an
actual or potential impact on a company's ability to achieve its
objectives. In addition, public relations specialists are
responsible for monitoring these individuals and groups and for
maintaining good relationships with them. One of their key
activities is to work with news and information media to ensure
appropriate coverage of the company's activities and products.
Public relations specialists create publicity by arranging press
conferences, contests, meetings, and other events that will draw
attention to a company's products or services. Another public
relations responsibility is crisis management--that is, handling
situations in which public awareness of a particular issue may
dramatically and negatively impact the company's ability to
achieve its goals. For example, when it was discovered that
some bottles of Perrier sparkling water might have been tainted
by a harmful chemical, Source Perrier, SA's public relations
team had to ensure that the general consuming public did not
thereafter automatically associate Perrier with tainted water.

20
Other public relations activities include lobbying, advising
management about public issues, and planning community
events.
Because public relations does not always seek to impact
sales or profitability directly, it is sometimes seen as serving a
function that is separate from marketing. However, some
companies recognize that public relations can work in
conjunction with other marketing activities to facilitate the
exchange process directly and indirectly. These organizations
have established marketing public relations departments to
directly support corporate and product promotion and image
management.

Marketing implementation.

Companies have typically hired different agencies to help in

the development of advertising, sales promotion, and publicity
ideas. However, this often results in a lack of coordination
between elements of the promotion mix. When components of
the mix are not all in harmony, a confusing message may be
sent to consumers. For example, a print advertisement for an
automobile may emphasize the car's exclusivity and luxury,
while a television advertisement may stress rebates and sales,
clashing with this image of exclusivity. Alternatively, by
integrating the marketing elements, a company can more
efficiently utilize its resources. Instead of individually
managing four or five different promotion processes, the
company manages only one. In addition, promotion
expenditures are likely to be better allocated, because
differences among promotion tools become more explicit. This

21
reasoning has led to integrated marketing communications, in
which all promotional tools are considered to be part of the
same effort, and each tool receives full consideration in terms
of its cost and effectiveness.

Marketing evaluation and control

No marketing process, even the most carefully developed, is

guaranteed to result in maximum benefit for a company. In
addition, because every market is changing constantly, a
strategy that is effective today may not be effective in the
future. It is important to evaluate a marketing program
periodically to be sure that it is achieving its objectives.

MARKETING CONTROL

There are four types of marketing control, each of which

has a different purpose: annual-plan control, profitability
control, efficiency control, and strategic control.

Annual-plan control.

The basis of annual-plan control is managerial objectives--

that is to say, specific goals, such as sales and profitability, that
are established on a monthly or quarterly basis. Organizations
use five tools to monitor plan performance. The first is sales
analysis, in which sales goals are compared with actual sales
and discrepancies are explained or accounted for. A second tool
is market-share analysis, which compares a company's sales
with those of its competitors. Companies can express their

22
market share in a number of ways, by comparing their own
sales to total market sales, sales within the market segment, or
sales of the segment's top competitors. Third, marketing
expense-to-sales analysis gauges how much a company spends
to achieve its sales goals. The ratio of marketing expenses to
sales is expected to fluctuate, and companies usually establish
an acceptable range for this ratio. In contrast, financial analysis
estimates such expenses (along with others) from a corporate
perspective. This includes a comparison of profits to sales
(profit margin), sales to assets (asset turnover), profits to assets
(return on assets), assets to worth (financial leverage), and,
finally, profits to worth (return on net worth). Finally,
companies measure customer satisfaction as a means of
tracking goal achievement. Analyses of this kind are generally
less quantitative than those described above and may include
complaint and suggestion systems, customer satisfaction
surveys, and careful analysis of reasons why customers switch
to a competitor's product.

Profitability control.

Profitability control and efficiency control allow a company

to closely monitor its sales, profits, and expenditures.
Profitability control demonstrates the relative profit-earning
capacity of a company's different products and consumer
groups. Companies are frequently surprised to find that a small
percentage of their products and customers contribute to a large
percentage of their profits. This knowledge helps a company
allocate its resources and effort.

23
 Efficiency control.

Efficiency control involves micro-level analysis of the

various elements of the marketing mix, including sales force,
advertising, sales promotion, and distribution. For example, to
understand its sales-force efficiency, a company may keep track
of how many sales calls a representative makes each day, how
long each call lasts, and how much each call costs and
generates in revenue. This type of analysis highlights areas in
which companies can manage their marketing efforts in a more
productive and cost-effective manner.

Strategic control.

Strategic control processes allow managers to evaluate a

company's marketing program from a critical long-term
perspective. This involves a detailed and objective analysis of a
company's organization and its ability to maximize its strengths
and market opportunities. Companies can use two types of
strategic control tools. The first, which a company uses to
evaluate itself, is called a marketing-effectiveness rating
review. In order to rate its own marketing effectiveness, a
company examines its customer philosophy, the adequacy of its
marketing information, and the efficiency of its marketing

24
operations. It will also closely evaluate the strength of its
marketing strategy and the integration of its marketing tactics.

MARKETING AUDIT

The second evaluation tool is known as a marketing audit.

This is a comprehensive, systematic, independent, and periodic
analysis that a company uses to examine its strengths in relation
to its current and potential market(s). Such an analysis is
comprehensive because it covers all aspects of the marketing
climate (unlike a functional audit, which analyzes one
marketing activity), looking at both macro-environment factors
(demographic, economic, ecological, technological, political,
and cultural) and micro- or task-environment factors (markets,
customers, competitors, distributors, dealers, suppliers,
facilitators, and publics). The audit includes analyses of the
company's marketing strategy, marketing organization,
marketing systems, and marketing productivity. It must be
systematic in order to provide concrete conclusions based on
these analyses. To ensure objectivity, a marketing audit is best
done by a person, department, or organization that is
independent of the company or marketing program. Marketing
audits should be done not only when the value of a company's
current marketing plan is in question; they must be done

25
periodically in order to isolate and solve problems before they
arise.

THE MARKETING ACTORS

The elements that play a role in the marketing process can
be divided into three groups: customers, distributors, and
facilitators. In addition to interacting with one another, these
groups must interact within a business environment that is
affected by a variety of forces, including governmental,
economic, and social influences.

Customers

In order to understand target customers, certain questions

must be answered: Who constitutes the market segment? What
do they buy and why? And how, when, and where do they buy?
Knowing who constitutes the market segment is not simply a
matter of knowing who uses a product. Often, individuals other
than the user may participate in or influence a purchasing
decision. Several individuals may play various roles in the
decision-making process. For instance, in the decision to
purchase an automobile for a small family business, the son
may be the initiator, the daughter may be an influencer, the
wife may be the decider, the purchasing manager may be the
buyer, and the husband may be the user. In other words, the son
may read in a magazine that businesses can save money and

26
decrease tax liability by owning or leasing company
transportation. He may therefore initiate the product search
process by raising this issue at a weekly business meeting.
However, the son may not be the best-qualified to gather and
process information about automobiles, because the daughter
worked for several years in the auto industry before joining the
family business. Although the daughter's expertise and research
efforts may influence the process, she may not be the key
decision maker. The mother, by virtue of her position in the
business and in the family, may make the final decision about
which car to purchase. However, the family uncle may have
good negotiation skills, and he may be the purchasing agent.
Thus, he will go to different car dealerships in order to buy the
chosen car at the best possible price. Finally, despite the
involvement of all these individuals in the purchase process,
none of them may actually drive the car. It may be purchased so
that the father may use it for his frequent sales calls. In other
instances, an individual may handle more than one of these
purchasing functions and may even be responsible for all of
them. The key is that a marketer must recognize that different
people have different influences on the purchase decision, and
these factors must be taken into account in crafting a marketing
strategy.
In addition to knowing to whom the marketing efforts are
targeted, it is important to know which products target
customers tend to purchase and why they do so. Customers do
not purchase "things" as much as they purchase services or
benefits to satisfy needs. For instance, a conventional oven
allows users to cook and heat food. Microwave oven
manufacturers recognized that this need could be fulfilled--and

27
done so more quickly--with a technology other than
conventional heating. By focusing on needs rather than on
products, these companies were able to gain a significant share
in the food cooking and heating market.
Knowledge of when, where, and how purchases are made is
also useful. A furniture store whose target customers tend to
make major purchases in the spring may send its mailings at the
beginning of this season. A food vendor may set up a stand near
the door of a busy office complex so that employees must pass
the stand on their way to lunch. And a jeweler who knows that
customers prefer to pay with credit cards may ensure that all
major credit cards are accepted at the store. In other cases,
marketers who understand specifics about buying habits and
preferences also may try to alter them. Thus, a remotely
situated wholesale store may use deeply discounted prices to
lure customers away from the more conveniently located
shopping malls.
Customers can be divided into two categories: consumer
customers, who purchase goods and services for use by
themselves and by those with whom they live; and business
customers, who purchase goods and services for use by the
organization for which they work. Although there are a number
of similarities between the purchasing approaches of each type
of customer, there are important differences as well.

28
 CONSUMER CUSTOMERS

Factors influencing consumers.

Four major types of factors influence consumer buying

behaviour: cultural, social, personal, and psychological.

Cultural factors.

Cultural factors have the broadest influence, because they

constitute a stable set of values, perceptions, preferences, and
behaviours that have been learned by the consumer throughout
life. For example, in Western cultures consumption is often
driven by a consumer's need to express individuality, while in
Eastern cultures consumers are more interested in conforming
to group norms. In addition to the influence of a dominant
culture, consumers may also be influenced by several
subcultures. In Quebec the dominant culture is French-
speaking, but one influential subculture is English-speaking.
Social class is also a subcultural factor: members of any given
social class tend to share similar values, interests, and
behaviours.

Social factors.

29
 A consumer may interact with several individuals on a daily
basis, and the influence of these people constitutes the social
factors that impact the buying process. Social factors include
reference groups--that is, the formal or informal social groups
against which consumers compare themselves. Consumers may
be influenced not only by their own membership groups but
also by reference groups of which they wish to be a part. Thus,
a consumer who wishes to be considered a successful white-
collar professional may buy a particular kind of clothing
because the people in this reference group tend to wear that
style. Typically, the most influential reference group is the
family. In this case, family includes the people who raised the
consumer (the "family of orientation") as well as the
consumer's spouse and children (the "family of procreation").
Within each group, a consumer will be expected to play a
specific role or set of roles dictated by the norms of the group.
Roles in each group generally are tied closely to status.

Personal factors.

Personal factors include individual characteristics that,

when taken in aggregate, distinguish the individual from others
of the same social group and culture. These include age, life-
cycle stage, occupation, economic circumstances, and lifestyle.
A consumer's personality and self-conception will also
influence his or her buying behaviour.

Psychological factors.

Finally, psychological factors are the ways in which human

thinking and thought patterns influence buying decisions.

30
Consumers are influenced, for example, by their motivation to
fulfill a need. In addition, the ways in which an individual
acquires and retains information will affect the buying process
significantly. Consumers also make their decisions based on
past experiences--both positive and negative.

Consumer buying tasks.

A consumer's buying task is affected significantly by the

level of purchase involvement. The level of involvement
describes how important the decision is to the consumer; high
involvement is usually associated with purchases that are
expensive, infrequent, or risky. Buying also is affected by the
degree of difference between brands in the product category.
The buying task can be grouped into four categories based on
whether involvement is high or low and whether brand
differences are great or small.

High-involvement purchases.

Complex buying behaviour occurs when the consumer is

highly involved with the purchase and when there are
significant differences between brands. This behaviour can be
associated with the purchase of a new home or of an advanced
computer. Such tasks are complex because the risk is high
(significant financial commitment), and the large differences
among brands or products require gathering a substantial
amount of information prior to purchase. Marketers who wish
to influence this buying task must help the consumer process
the information as readily as possible. This may include
informing the consumer about the product category and its

31
important attributes, providing detailed information about
product benefits, and motivating sales personnel to influence
final brand choice. For instance, realtors may offer consumers a
book or a video featuring photographs and descriptions of each
available home. And a computer salesperson is likely to spend

time in the retail store providing information to customers who

have questions.
Dissonance-reducing buying behaviour occurs when the
consumer is highly involved but sees little difference between
brands. This is likely to be the case with the purchase of a lawn
mower or a diamond ring. After making a purchase under such
circumstances, a consumer is likely to experience the
dissonance that comes from noticing that other brands would
have been just as good, if not slightly better, in some
dimensions. A consumer in such a buying situation will seek
information or ideas that justify the original purchase.

Low-involvement purchases.

There are two types of low-involvement purchases. Habitual

buying behaviour occurs when involvement is low and
differences between brands are small. Consumers in this case
usually do not form a strong attitude toward a brand but select
it because it is familiar. In these markets, promotions tend to be
simple and repetitive so that the consumer can, without much
effort, learn the association between a brand and a product
class. Marketers may also try to make their product more
involving. For instance, toothpaste was at one time purchased

32
primarily out of habit, but Proctor and Gamble Co. introduced a
brand, Crest toothpaste, that increased consumer involvement
by raising awareness about the importance of good dental
hygiene.

Brand differences.

Variety-seeking buying behaviour occurs when the

consumer is not involved with the purchase, yet there are
significant brand differences. In this case, the cost of switching
products is low, and so the consumer may, perhaps simply out
of boredom, move from one brand to another. Such is often the
case with frozen desserts, breakfast cereals, and soft drinks.
Dominant firms in such a market situation will attempt to
encourage habitual buying and will try to keep other brands
from being considered by the consumer. These strategies
reduce customer switching behaviour. Challenger firms, on the
other hand, want consumers to switch from the market leader,
so they will offer promotions, free samples, and advertising that
encourage consumers to try something new.

The consumer buying process.

The purchase process is initiated when a consumer

becomes aware of a need. This awareness may come from an
internal source such as hunger or an external source such as
marketing communications. Awareness of such a need
motivates the consumer to search for information about options
with which to fulfill the need. This information can come from
personal sources, commercial sources, public or government

33
sources, or the consumer's own experience. Once alternatives
have been identified through these sources, consumers evaluate
the options, paying particular attention to those attributes the
consumer considers most important. Evaluation culminates
with a purchase decision, but the buying process does not end
here. In fact, marketers point out that a purchase represents the
beginning, not the end, of a consumer's relationship with a
company. After a purchase has been made, a satisfied consumer
is more likely to purchase another company product and to say
positive things about the company or its product to other
potential purchasers. The opposite is true for dissatisfied
consumers. Because of this fact, many companies continue to
communicate with their customers after a purchase in an effort
to influence post-purchase satisfaction and behaviour.
For example, a plumber may be motivated to consider
buying a new set of tools because his old set of tools is getting
rusty. To gather information about what kind of new tool set to
buy, this plumber may examine the tools of a colleague who
just bought a new set, read advertisements in plumbing trade
magazines, and visit different stores to examine the sets
available. The plumber then processes all the information
collected, focusing perhaps on durability as one of the most
important attributes. In making a particular purchase, the
plumber initiates a relationship with a particular tool company.
This company may try to enhance post-purchase loyalty and
satisfaction by sending the plumber promotions about new
tools.

BUSINESS CUSTOMERS

34
 Business customers, also known as industrial customers,
purchase products or services to use in the production of other
products. Such industries include agriculture, manufacturing,
construction, transportation, and communication, among others.
They differ from consumer markets in several respects.
Because the customers are organizations, the market tends to
have fewer and larger buyers than consumer markets. This
often results in closer buyer-seller relationships, because those
who operate in a market must depend more significantly on one
another for supply and revenue. Business customers also are
more concentrated; for instance, in the United States more than
half of the country's business buyers are concentrated in only
seven states. Demand for business goods is derived demand,
which means it is driven by a demand for consumer goods.
Therefore, demand for business goods is more volatile, because
variations in consumer demand can have a significant impact
on business-goods demand. Business markets are also
distinctive in that buyers are professional purchasers who are
highly skilled in negotiating contracts and maximizing
efficiency. In addition, several individuals within the business
usually have direct or indirect influence on the purchasing
process.

Factors influencing business customers.

Although business customers are affected by the same

cultural, social, personal, and psychological factors that
influence consumer customers, the business arena imposes
other factors that can be even more influential. First, there is the
economic environment, which is characterized by such factors

35
as primary demand, economic forecast, political and regulatory
developments, and the type of competition in the market. In a
highly competitive market such as airline travel, firms may be
concerned about price and therefore make purchases with a
focus on saving money. In markets where there is more
differentiation among competitors--e.g., in the hotel industry--
many firms may make purchases with a focus on quality rather
than on price.
Second, there are organizational factors, which include the
objectives, policies, procedures, structures, and systems that
characterize any particular company. Some companies are
structured in such a way that purchases must pass through a
complex system of checks and balances, while other companies
allow purchasing managers to make more individual decisions.
Interpersonal factors are more salient among business
customers, because the participants in the buying process--
perhaps representing several departments within a company--
often have different interests, authority, and persuasiveness.
Furthermore, the factors that affect an individual in the business
buying process are related to the participant's role in the
organization. These factors include job position, risk attitudes,
and income.

The business buying process.

The business buying process mirrors the consumer buying

process, with a few notable exceptions. Business buying is not
generally need-driven and is instead problem-driven. A
business buying process is usually initiated when someone in
the company sees a problem that needs to be solved or

36
recognizes a way in which the company can increase
profitability or efficiency. The ensuing process follows the
same pattern as that of consumers, including information
search, evaluation of alternatives, purchase decision, and post-
purchase evaluation. However, in part because business
purchase decisions require accountability and are often closely
analyzed according to cost and efficiency, the process is more
systematic than consumer buying and often involves significant
documentation. Typically, a purchasing agent for a business
buyer will generate documentation regarding product
specifications, preferred supplier lists, requests for bids from
suppliers, and performance reviews.

Marketing intermediaries:the
distribution channel

Many producers do not sell products or services directly to

consumers and instead use marketing intermediaries to execute
an assortment of necessary functions to get the product to the
final user. These intermediaries, such as middlemen
(wholesalers, retailers, agents, and brokers), distributors, or
financial intermediaries, typically enter into longer-term
commitments with the producer and make up what is known as
the marketing channel, or the channel of distribution.
Manufacturers use raw materials to produce finished products,
which in turn may be sent directly to the retailer, or, less often,
to the consumer. However, as a general rule, finished goods
flow from the manufacturer to one or more wholesalers before
they reach the retailer and, finally, the consumer. Each party in

37
the distribution channel usually acquires legal possession of
goods during their physical transfer, but this is not always the
case. For instance, in consignment selling, the producer retains
full legal ownership even though the goods may be in the hands
of the wholesaler or retailer--that is, until the merchandise
reaches the final user or consumer.
Channels of distribution tend to be more direct--that is,
shorter and simpler--in the less industrialized nations. There are
notable exceptions, however. For instance, the Ghana Cocoa
Marketing Board collects cacao beans in Ghana and licenses
trading firms to process the commodity. Similar marketing
processes are used in other West African nations. Because of
the vast number of small-scale producers, these agents operate
through middlemen who, in turn, enlist sub-buyers to find
runners to transport the products from remote areas. Japan's
marketing organization was, until the late 20th century,
characterized by long and complex channels of distribution and
a variety of wholesalers. It was possible for a product to pass
through a minimum of five separate wholesalers before it
reached a retailer.
Companies have a wide range of distribution channels
available to them, and structuring the right channel may be one
of the company's most critical marketing decisions. Businesses
may sell products directly to the final customer, as Land's End,
Inc., does with its mail-order goods and as is the case with most
industrial capital goods. Or they may use one or more
intermediaries to move their goods to the final user. The design
and structure of consumer marketing channels and industrial
marketing channels can be quite similar or vary widely.
The channel design is based on the level of service desired

38
by the target consumer. There are five primary service
components that facilitate the marketer's understanding of what,
where, why, when, and how target customers buy certain
products. The service variables are quantity or lot size (the
number of units a customer purchases on any given purchase
occasion), waiting time (the amount of time customers are
willing to wait for receipt of goods), proximity or spatial
convenience (accessibility of the product), product variety (the
breadth of assortment of the product offering), and service
backup (add-on services such as delivery or installation
provided by the channel). It is essential for the designer of the
marketing channel--typically the manufacturer--to recognize
the level of each service point that the target customer desires.
A single manufacturer may service several target customer
groups through separate channels, and therefore each set of
service outputs for these groups could vary. One group of target
customers may want elevated levels of service (that is, fast
delivery, high product availability, large product assortment,
and installation). Their demand for such increased service
translates into higher costs for the channel and higher prices for
customers. However, the prosperity of discount and warehouse
stores demonstrates that customers are willing to accept lower
service outputs if this leads to lower prices.

Channel functions and flows.

In order to deliver the optimal level of service outputs to

their target consumers, manufacturers are willing to allocate
some of their tasks, or marketing flows, to intermediaries. As
any marketing channel moves goods from producers to

39
consumers, the marketing intermediaries perform, or participate
in, a number of marketing flows, or activities. The typical
marketing flows, listed in the usual sequence in which they
arise, are collection and distribution of marketing research
information (information), development and dissemination of
persuasive communications (promotion), agreement on terms
for transfer of ownership or possession (negotiation),
intentions to buy (ordering), acquisition and allocation of funds
(financing), assumption of risks (risk taking), storage and
movement of product (physical possession), buyers paying
sellers (payment), and transfer of ownership (title).
Each of these flows must be performed by a marketing
intermediary for any channel to deliver the goods to the final
consumer. Thus, each producer must decide who will perform
which of these functions in order to deliver the service output
levels that the target consumers desire. Producers delegate these
flows for a variety of reasons. First, they may lack the financial
resources to carry out the intermediary activities themselves.
Second, many producers can earn a superior return on their
capital by investing profits back into their core business rather
than into the distribution of their products. Finally,
intermediaries, or middlemen, offer superior efficiency in
making goods and services widely available and accessible to
final users. For instance, in overseas markets it may be difficult
for an exporter to establish contact with end users, and various
kinds of agents must therefore be employed. Because an
intermediary typically focuses on only a small handful of
specialized tasks within the marketing channel, each
intermediary, through specialization, experience, or scale of
operation, can offer a producer greater distribution benefits.

40
 Management of channel systems.

Although middlemen can offer greater distribution economy

to producers, gaining cooperation from these middlemen can be
problematic. Middlemen must continuously be motivated and
stimulated to perform at the highest level. In order to gain such
a high level of performance, manufacturers need some sort of
leverage. Researchers have distinguished five bases of power:
coercive (threats if the middlemen do not comply), reward
(extra benefits for compliance), legitimate (power by position--
rank or contract), expert (special knowledge), and referent
(manufacturer is highly respected by the middlemen).
As new institutions emerge or products enter different life-
cycle phases, distribution channels change and evolve. With
these types of changes, no matter how well the channel is
designed and managed, conflict is inevitable. Often this conflict
develops because the interests of the independent businesses do
not coincide. For example, franchisers, because they receive a
percentage of sales, typically want their franchisees to
maximize sales, while the franchisees want to maximize their
profits, not sales. The conflict that arises may be vertical,
horizontal, or multichannel in nature. When General Motors
Corporation comes into conflict with its dealers, this is a

41
vertical channel conflict. Horizontal channel conflict arises
when a franchisee in a neighbouring town feels a fellow
franchisee has infringed on its territory. Finally, multichannel
conflict occurs when a manufacturer has established two or
more channels that compete against each other in selling to the
same market. For example, a major tire manufacturer may
begin selling its tires through mass merchandisers, much to the
dismay of its independent tire dealers.

WHOLESALERS

Wholesaling includes all activities required to sell goods or

services to other firms, either for resale or for business use,
usually in bulk quantities and at lower-than-retail prices.
Wholesalers, also called distributors, are independent
merchants operating any number of wholesale establishments.
Wholesalers are typically classified into one of three groups:
merchant wholesalers, brokers and agents, and manufacturers'
and retailers' branches and offices.

Merchant wholesalers.

Merchant wholesalers, also known as jobbers, distributors,

or supply houses, are independently owned and operated
organizations that acquire title ownership of the goods that they
handle. There are two types of merchant wholesalers: full-
service and limited-service.

Full-service wholesalers.

42
 Full-service wholesalers usually handle larger sales
volumes; they may perform a broad range of services for their
customers, such as stocking inventories, operating warehouses,
supplying credit, employing salespeople to assist customers,
and delivering goods to customers. General-line wholesalers
carry a wide variety of merchandise, such as groceries;
specialty wholesalers, on the other hand, deal with a narrow
line of goods, such as coffee and tea, cigarettes, or seafood.

Limited-service wholesalers.

Limited-service wholesalers, who offer fewer services to

their customers and suppliers, emerged in order to reduce the
costs of service. There are several types of limited-service
wholesalers. Cash-and-carry wholesalers usually handle a
limited line of fast-moving merchandise, selling to smaller
retailers on a cash-only basis and not delivering goods. Truck
wholesalers or jobbers sell and deliver directly from their
vehicles, often for cash. They carry a limited line of
semiperishables such as milk, bread, and snack foods. Drop
shippers do not carry inventory or handle the merchandise.
Operating primarily in bulk industries such as lumber, coal, and
heavy equipment, they take orders but have manufacturers ship
merchandise directly to final consumers. Rack jobbers, who
handle nonfood lines such as housewares or personal goods,
primarily serve drug and grocery retailers. Rack jobbers
typically perform such functions as delivery, shelving,
inventory stacking, and financing. Producers' cooperatives--
owned by their members, who are farmers--assemble farm
produce to be sold in local markets and share profits at the end
of the year.

43
 In less-developed countries, wholesalers are often the sole
or primary means of trade; they are the main elements in the
distribution systems of many countries in Latin America, East
Asia, and Africa. In such countries the business activities of
wholesalers may expand to include manufacturing and
retailing, or they may branch out into nondistributive ventures
such as real estate, finance, or transportation. Until the late
1950s, Japan was dominated by wholesaling. Even relatively
large manufacturers and retailers relied principally on
wholesalers as their intermediaries. However, in the late 20th
century, Japanese wholesalers have declined in importance.
Even in the most highly industrialized nations, however,
wholesalers remain essential to the operations of significant
numbers of small retailers.

Brokers and agents.

Manufacturers may use brokers and agents, who do not take

title possession of the goods, in marketing their products.
Brokers and agents typically perform only a few of the
marketing flows, and their main function is to ease buying and
selling--that is, to bring buyers and sellers together and
negotiate between them. Brokers, most commonly found in the
food, real estate, and insurance industries, may represent either
a buyer or a seller and are paid by the party who hires them.
Brokers often can represent several manufacturers of
noncompeting products on a commission basis. They do not
carry inventory or assume risk.
Unlike merchant wholesalers, agent middlemen do not take
legal ownership of the goods they sell; nor do they generally

44
take physical possession of them. The three principal types of
agent middlemen are manufacturers' agents, selling agents, and
purchasing agents. Manufacturers' agents, who represent two or
more manufacturers' complementary lines on a continuous
basis, are usually compensated by commission. As a rule, they
carry only part of a manufacturer's output, perhaps in areas
where the manufacturer cannot maintain full-time salespeople.
Many manufacturers' agents are businesses of only a few
employees and are most commonly found in the furniture,
electric, and apparel industries. Sales agents are given
contractual authority to sell all of a manufacturer's output and
generally have considerable autonomy to set prices, terms, and
conditions of sale. Sometimes they perform the duties of a
manufacturer's marketing department, although they work on a
commission basis. Sales agents often provide market feedback
and product information to the manufacturers and play an
important role in product development. They are found in such
product areas as chemicals, metals, and industrial machinery
and equipment. Purchasing agents, who routinely have long-
term relationships with buyers, typically receive, inspect, store,
and ship goods to their buyers.

Manufacturers' and retailers' branches and offices.

Wholesaling operations conducted by the sellers or buyers

themselves rather than by independent wholesalers comprise
the third major type of wholesaling. Manufacturers may engage
in wholesaling through their sales branches and offices. This

45
allows manufacturers to improve the inventory control, selling,
and promotion flows. Numerous retailers also establish
purchasing offices in major market centres such as Chicago and
New York City that play a role similar to that of brokers and
agents. The major difference is that they are part of the buyer's
own organization.

RETAILERS

Retailing, the merchandising aspect of marketing, includes

all activities required to sell directly to consumers for their
personal, nonbusiness use. The firm that performs this
consumer selling--whether it is a manufacturer, wholesaler, or
retailer--is engaged in retailing. Retailing can take many forms:
goods or services may be sold in person, by mail, telephone,
television, or computer, or even through vending machines.
These products can be sold on the street, in a store, or in the
consumer's home. However, businesses that are classified as
retailers secure the vast majority of their sales volume from
store-based retailing.

The history of retailing.

For centuries most merchandise was sold in marketplaces or

by peddlers. In many countries, hawkers still sell their wares
while traveling from one village to the next. Marketplaces are
still the primary form of retail selling in these villages. This
was also true in Europe until the Renaissance, when market
stalls in certain localities became permanent and eventually
grew into stores and business districts.

46
 Retail chains are known to have existed in China several
centuries before the Christian era and in some European cities
in the 16th and 17th centuries. However, the birth of the
modern chain store can be traced to 1859, with the inauguration
of what is now the Great Atlantic & Pacific Tea Company,
Inc. (A&P), in New York City. During the 15th and 16th
centuries the Fugger family of Germany was the first to carry
out mercantile operations of a chain-store variety. In 1670 the
Hudson's Bay Company chartered its chain of outposts in
Canada.
Department stores also were seen in Europe and Asia as
early as the 17th century. The famous Bon Marché in Paris
grew from a large specialty store into a full-fledged department
store in the mid-1800s. By the middle of the 20th century,
department stores existed in major U.S. cities, although small
independent merchants still constitute the majority of retailers.
Shopping malls, a late 20th-century development in retail
practices, were created to provide for a consumer's every need
in a single, self-contained shopping area. Although they were
first created for the convenience of suburban populations, they
can now also be found on main city thoroughfares. A large
branch of a well-known retail chain usually serves as a mall's
retail flagship, which is the primary attraction for customers. In
fact, few malls can be financed and built without a flagship
establishment already in place.
Other mall proprietors have used recreation and
entertainment to attract customers. Movie theatres, holiday
displays, and live musical performances are often found in
shopping malls. In Asian countries, malls also have been
known to house swimming pools, arcades, and amusement

47
parks. Hong Kong's City Plaza shopping mall includes one of
the territory's two ice rinks. Some malls, such as the Mall of
America in Bloomington, Minn., U.S., may offer exhibitions,
sideshows, and other diversions. Although there is a great
variety of retail enterprises, with new types constantly
emerging, they can be classified into three main types: store
retailers, nonstore retailers, and retail organizations.

Store retailers.

Several different types of stores participate in retail

merchandising. The following is a brief description of the most
important store retailers.

Specialty stores.

A specialty store carries a deep assortment within a narrow

line of goods. Furniture stores, florists, sporting-goods stores,
and bookstores are all specialty stores. Stores such as Athlete's
Foot (sports shoes only) and Tall Men (clothing for tall men)
are considered superspecialty stores because they carry a very
narrow product line.

Department stores.

Department stores carry a wider variety of merchandise

than most stores but offer these items in separate departments
within the store. These departments usually include home
furnishings and household goods, as well as clothing, which
may be divided into departments according to gender and age.
Department stores in western Europe and Asia also have large

48
food departments, such as the renowned food court at Harrods
in the United Kingdom. Departments within each store are
usually operated as separate entities, each with its own buyers,
promotions, and service personnel. Some departments, such as
restaurants and beauty parlours, are leased to external
providers. Department stores generally account for less than 10
percent of a country's total retail sales, but they draw large
numbers of customers in urban areas. The most influential of
the department stores may even be trendsetters in various
fields, such as fashion. Department stores such as Sears,
Roebuck and Company have also spawned chain organizations.
Others may do this through mergers or by opening branch units
within a region or by expanding to other countries.

Supermarkets.

Supermarkets are characterized by large facilities (15,000

to 25,000 square feet [1,394 to 2,323 square metres] with more
than 12,000 items), low profit margins (earning about 1 percent
operating profit on sales), high volume, and operations that
serve the consumer's total needs for items such as food
(groceries, meats, produce, dairy products, baked goods) and
household sundries. They are organized according to product
departments and operate primarily on a self-service basis.
Supermarkets also may sell wines and other alcoholic
beverages (depending on local licensing laws) and clothing.
The first true supermarket was opened in the United States by
Michael Cullin in 1930. His King Kullen chain of large-volume
food stores was so successful that it encouraged the major food-
store chains to convert their specialty stores into supermarkets.
When compared with the conventional independent grocer,

49
supermarkets generally offered greater variety and convenience
and often better prices as well. Consequently, in the two
decades after World War II, the supermarket drove many small
food retailers out of business, not only in the United States but
throughout the world. In France, for example, the number of
larger food stores grew from about 50 in 1960 to 4,700 in 1982,
while the number of small food retailers fell from 130,000 to
60,000.

Convenience stores.

Located primarily near residential areas, convenience stores

are relatively small outlets that are open long hours and carry a
limited line of high-turnover convenience products at high
prices. Although many have added food services, consumers
use them mainly for "fill-in" purchases, such as bread, milk, or
miscellaneous goods.

Superstores.

Superstores, hypermarkets, and combination stores are

unique retail merchandisers. With facilities averaging 35,000
square feet, superstores meet many of the consumer's needs for
food and nonfood items by housing a full-service grocery store
as well as such services as dry cleaning, laundry, shoe repair,
and cafeterias. Combination stores typically combine a grocery
store and a drug store in one facility, utilizing approximately

50
55,000 square feet of selling space. Hypermarkets combine
supermarket, discount, and warehousing retailing principles by
going beyond routinely purchased goods to include furniture,
clothing, appliances, and other items. Ranging in size from
80,000 to 220,000 square feet, hypermarkets display products
in bulk quantities that require minimum handling by store
personnel.

Discount stores.

Selling merchandise below the manufacturer's list price is

known as discounting. The discount store has become an
increasingly popular means of retailing. Following World War
II, a number of retail establishments in the United States began
to pursue a high-volume, low-profit strategy designed to attract
price-conscious consumers. A key strategy for keeping
operating costs (and therefore prices) low was to locate in low-
rent shopping districts and to offer minimal service assistance.
This no-frills approach was used at first only with hard goods,
or consumer durables, such as electrical household appliances,
but it has since been shown to be successful with soft goods,
such as clothing. This practice has been adopted for a wide
variety of products, so that discount stores have essentially
become department stores with reduced prices and fewer
services. In the late 20th century, discount stores began to
operate outlet malls. These groups of discount stores are
usually located some distance away from major metropolitan
areas and have facilities that make them indistinguishable from
standard shopping malls. As they gained popularity, many
discount stores improved their facilities and appearances, added

51
new lines and services, and opened suburban branches.
Coupled with attempts by traditional department stores to
reduce prices in order to compete with discounters, the
distinction between many department and discount stores has
become blurred. Specialty discount operations have grown
significantly in electronics, sporting goods, and books.

Off-price retailers.

Off-price retailers offer a different approach to discount

retailing. As discount houses tried to increase services and
offerings in order to upgrade, off-price retailers invaded this
low-price, high-volume sector. Off-price retailers purchase at
below-wholesale prices and charge less than retail prices. This
practice is quite different from that of ordinary discounters,
who buy at the market wholesale price and simply accept lower
margins by pricing their products below retail costs. Off-price
retailers carry a constantly changing collection of overruns,
irregulars, and leftover goods and have made their biggest
forays in the clothing, footwear, and accessories industries. The
three primary examples of off-price retailers are factory outlets,
independent carriers, and warehouse clubs. Stocking
manufacturers' surplus, discontinued, or irregular products,
factory outlets are owned and operated by the manufacturer.
Independent off-price retailers carry a rapidly changing
collection of higher-quality merchandise and are typically
owned and operated by entrepreneurs or divisions of larger

52
retail companies. Warehouse (or wholesale) clubs operate out
of enormous, low-cost facilities and charge patrons an annual
membership fee. They sell a limited selection of brand-name
grocery items, appliances, clothing, and miscellaneous items at
a deep discount. These warehouse stores, such as Wal-Mart-
owned Sam's, Price Club, and Costco (in the United States),
maintain low costs because they buy products at huge quantity
discounts, use less labour in stocking, and typically do not
make home deliveries or accept credit cards.

Nonstore retailers.

Some retailers do not operate stores, and these nonstore

businesses have grown much faster than store retailers. With
some market observers predicting that by the year 2000
nonstore retailing will handle 30 percent of all general
merchandise sold, nonstore channels may become a powerful
force in the retailing industry. The major types of nonstore
retailing are direct selling, direct marketing, and automatic
vending.

Direct selling.

This form of retailing originated several centuries ago and

has mushroomed into a $9 billion industry consisting of about
600 companies selling door-to-door, office-to-office, or at
private-home sales meetings. The forerunners in the direct-
selling industry include The Fuller Brush Company (brushes,
brooms, etc.), Electrolux (vacuum cleaners), and Avon

53
(cosmetics). In addition, Tupperware pioneered the home-sales
approach, in which friends and neighbours gather in a home
where Tupperware products are demonstrated and sold.
Network marketing, a direct-selling approach similar to home
sales, is also gaining prevalence in markets worldwide.
Network marketing companies such as Amway and Shaklee
reward their distributors not only for selling products but also
for recruiting others to become distributors.

Direct marketing.

Direct marketing is direct contact between a seller

(manufacturer or retailer) and a consumer. Generally speaking,
a seller can measure response to an offer because of its direct
addressability. Although direct marketing gained wide
popularity as a marketing strategy only in the late 20th century,
it has been successfully utilized for more than a hundred years.
The world's largest catalog houses--Sears, Roebuck and
Company and Montgomery Ward & Co.--began as direct
marketers in the late 1880s, selling their products solely by mail
order. A century later, however, both companies were
conducting most of their business in retail stores. Some
department stores and specialty stores may supplement their
store operations with direct-marketing transactions by mail or
telephone. Mail-order firms grew rapidly in the 1950s and '60s
in continental Europe, Great Britain, and certain other highly
industrialized nations. Modern direct marketing is generally
supported by advanced database technologies that track each
customer's purchase behaviour. These technologies are used by
established retail firms, such as Quelle and Neckermann in

54
Germany, and are the foundation of mail-order businesses
such as J. Crew, The Sharper Image, and L.L. Bean (all in the
United States). Direct marketing is not a worldwide business
phenomenon, however, because mail-order operations require
infrastructure elements that are still lacking in many countries,
such as efficient transportation networks and secure methods
for transmitting payments. Direct marketing has expanded from
its early forms, among them direct mail and catalog mailings, to
include such vehicles as telemarketing, direct-response radio
and television, and electronic shopping. Unlike many other
forms of promotion, a direct-marketing campaign is
quantitatively measurable.

Automatic vending.

Automatic vending is a unique area in nonstore

merchandising because the variety of merchandise offered
through automatic vending machines continues to grow.
Initially, impulse goods with high convenience value such as
cigarettes, soft drinks, candy, newspapers, and hot beverages
were offered. However, a wide array of products such as
hosiery, cosmetics, food snacks, postage stamps, paperback
books, record albums, camera film, and even fishing worms are
becoming available through machines. Vending-machine
operations are usually offered in sites owned by other
businesses, institutions, and transportation agencies. They can
be found in offices, gasoline stations, large retail stores, hotels,
restaurants, and many other locales. In Japan, vending
machines now dispense frozen beef, fresh flowers, whiskey,
jewelry, and even names of prospective dating partners. In
Sweden, vending machines have developed as a supplementary

55
channel to retail stores, where hours of business are restricted
by law. High costs of manufacturing, installation, and operation
have somewhat limited the expansion of vending-machine
retailing. In addition, consumers typically pay a high premium
for vended merchandise.

Retail organizations.

While merchants can sell their wares through a store or

nonstore retailing format, retail organizations can also structure
themselves in several different ways. The major types of retail
organizations are corporate chains, voluntary chains and retailer
cooperatives, consumer cooperatives, franchise organizations,
and merchandising conglomerates.

Corporate chains.

Two or more outlets that have common ownership and

control, centralized buying and merchandising operations, and
similar lines of merchandise are considered corporate chain
stores. Corporate chain stores appear to be strongest in the
food, drug, shoe, variety, and women's clothing industries.
Managed chain stores have a number of advantages over
independently managed stores. Because managed chains buy
large volumes of products, suppliers are willing to offer cost
advantages that are not usually available to other stores. These
savings can be passed on to consumers in the form of lower

56
prices and better sales. In addition, because managed chains
operate on such a large scale, they can hire more specialized
and experienced personnel, who may be better able to take full
advantage of purchasing and promotion opportunities. Chain
stores also have the opportunity to take advantage of economies
of scale in the areas of advertising, store design, and inventory
control. However, a corporate chain may have disadvantages as
well. Its size and bureaucracy often weaken staff members'
personal interest, drive, creativity, and customer-service
motivation.

Voluntary chains and retailer cooperatives.

These are associations of independent retailers, unlike

corporate chains. Wholesaler-sponsored voluntary chains of
retailers who engage in bulk buying and collective
merchandising are prevalent in many countries. True Value
hardware stores represent this type of arrangement in the
United States. In western Europe in the 1980s there were
several large wholesaler-sponsored chains of retailers, each
including more than 15,000 stores. These retail stores were
located across 18 countries, each store using the same name
and, as a rule, offering the same brands of products but
remaining an independent enterprise. Wholesaler-sponsored
chains offer the same types of services for their clients as do the
financially integrated retail chains. Retailer cooperatives, such
as ACE hardware stores, are grouped as independent retailers
who establish a central buying organization and conduct joint
promotion efforts.

Consumer cooperatives.

57
 Consumer cooperatives, or co-ops, are retail outlets that
are owned and operated by consumers for their mutual benefit.
The first consumer cooperative store was established in
Rochdale, Eng., in 1844, and most co-ops are modeled after the
same, original principles. They are based on open consumer
membership, equal voting among members, limited customer
services, and shared profits among members in the form of
rebates generally related to the amounts of their purchases.
Consumer cooperatives have gained widespread popularity
throughout western and northern Europe, particularly in
Denmark, Finland, Iceland, Norway, Sweden, and Great
Britain. Co-ops typically emerge because community residents
believe that local retailers' prices are too high or service is
substandard.

Franchise organizations.

Franchise arrangements are characterized by a contractual

relationship between a franchiser (a manufacturer, wholesaler,
or service organization) and franchisees (independent
entrepreneurs who purchase the right to own and operate any
number of units in the franchise systems). Typified by a unique
product, service, business method, trade name, or patent,
franchises have been prominent in many industries, including
fast foods, video stores, health and fitness centres, hair salons,
auto rentals, motels, and travel agencies. McDonald's
Corporation is a prominent example of a franchise retail
organization, with franchises all over the world.

Merchandising conglomerates.

58
 Merchandising conglomerates combine several diversified
retailing lines and forms under central ownership, as well as
integrate distribution and management of functions.
Merchandising conglomerates are relatively free-form
corporations. In the United States, Woolworth Corporation is
considered a merchandising conglomerate because it operates
Kinney shoe stores, Herald Square Stationers, Frame Scene,
and Kids Mart.

Marketing facilitators

Because marketing functions require significant expertise, it

is often both efficient and effective for an organization to use
the assistance of independent marketing facilitators. These are
organizations and consultants whose sole or primary
responsibility is to handle marketing functions. In many larger
companies, all or some of these functions are performed
internally. However, this is not necessary or justifiable in most
companies, which usually require only part-time or periodic
assistance from marketing facilitators. Also, most companies
cannot afford to support the salaries and operating expenses
required to maintain marketing facilitators as a permanent part
of their staff. Furthermore, independent marketing contractors
can be more effective than an internal department because
nonemployee facilitators can have broader expertise and more
objective perspectives. In addition, independent contractors
often are more motivated to perform at high standards, because

59
competition in the facilitator market is usually aggressive, and
poor performance could mean lost business. There are
four major types of marketing facilitators: advertising agencies,
market research firms, transportation firms, and warehousing
firms.

ADVERTISING AGENCIES

Advertising agencies are responsible for initiating,

managing, and implementing paid marketing communications.
In addition, some agencies have diversified into other types of
marketing communications, including public relations, sales
promotion, interactive media, and direct marketing. Agencies
typically consist of four departments: account management, a
creative division, a research group, and a media planning
department. Those in account management act as liaisons
between the client and the agency, ensuring that client needs
are communicated to the agency and that agency
recommendations are clearly understood by the client. Account
managers also manage the flow of work within the agency,
making sure that projects proceed according to schedule. The
creative department is where advertisements are conceived,
developed, and produced. Artists, writers, and producers work
together to craft a message that meets agency and client

60
objectives. In this department, slogans, jingles, and logos are
developed. The research department gathers and processes data
about the target market and consumers. This information
provides a foundation for the work of the creative department
and account management. Media planning personnel specialize
in selecting and placing advertisements in print and broadcast
media.

MARKET RESEARCH FIRMS

Market research firms gather and analyze data about

customers, competitors, distributors, and other actors and forces
in the marketplace. A large portion of the work performed by
most market research firms is commissioned by specific
companies for particular purposes. However, some firms also
routinely collect a wide spectrum of data and then attempt to
sell some or all of it to companies that may benefit from such
information. For example, the A.C. Nielsen Co. in the United
States specializes in supplying marketing data about consumer
television viewing habits, and Information Resources, Inc.
(IRI), has an extensive database regarding consumer
supermarket purchases.
Marketing research may be quantitative, qualitative, or a
combination of both. Quantitative research is numerically
oriented, requires significant attention to the measurement of
market phenomena, and often involves statistical analysis. For
example, when a restaurant asks its customers to rate different

61
aspects of its service on a scale from 1 (good) to 10 (poor), this
provides quantitative information that may be analyzed
statistically. Qualitative research focuses on descriptive words
and symbols and usually involves observing consumers in a
marketing setting or questioning them about their product or
service consumption experiences. For example, a marketing
researcher may stop a consumer who has purchased a particular
type of detergent and ask him why that detergent was chosen.
Qualitative and quantitative research each provides different
insights into consumer behaviour, and research results are
ordinarily more useful when the two methods are combined.
Market research can be thought of as the application of
scientific method to the solution of marketing problems. It
involves studying people as buyers, sellers, and consumers,
examining their attitudes, preferences, habits, and purchasing
power. Market research is also concerned with the channels of
distribution, with promotion and pricing, and with the design of
the products and services to be marketed.

TRANSPORTATION FIRMS

As a product moves from producer to consumer, it must

often travel long distances. Many products consumed in the
United States have been manufactured in another area of the
world, such as Asia or Mexico. In addition, if the channel of
distribution includes several firms, the product must be moved
a number of times before it becomes accessible to consumers.
A basic home appliance begins as a raw material (iron ore at a
steel mill, for example) that is transported from a processing
plant to a manufacturing facility.

62
 Transportation firms assist marketers in moving products
from one point in a channel to the next. An important matter of
negotiation between companies working together in a channel
is whether the sender or receiver of goods is responsible for
transportation. Movement of products usually involves
significant cost, risk, and time management. Thus, when firms
consider a transportation option, they carefully weigh its
dependability and price, frequency of operation, and
accessibility. A firm that has its own transportation capabilities
is known as a private carrier. There are also contract
carriers, which are independent transportation firms that can
be hired by companies on a long- or short-term basis. A
common carrier provides services to any and all companies
between predetermined points on a scheduled basis. The U.S.
Postal Service is a common carrier, as are Federal Express and
the Amtrak railway system.

WAREHOUSING FIRMS

Because products are not usually sold or shipped as soon as

they are produced or delivered, firms require storage facilities.
Two types of warehouses meet this need: storage warehouses
hold goods for longer periods of time, and distribution
warehouses serve as way stations for goods as they pass from
one location to the next. Like the other marketing functions,
warehouses can be wholly owned by firms, or space can be
rented as needed. Although companies have more control over
wholly owned facilities, warehouses of this sort can tie up
capital and firm resources. Operations within warehouses

63
usually require inspecting goods, tracking inventories,
repackaging goods, shipping, and invoicing.

MARKETING IN DIFFERENT SECTORS

Although the basic principles of marketing apply to all

industries, the ways in which these principles are best applied
can differ considerably based on the kind of product or service
sold, the kind of buying behaviour associated with the
purchase, and the sector (government, consumer goods,
services, etc.).

The government market

This market consists of federal, state, and local

governmental units that purchase or rent goods to fulfill their
functions and responsibilities for the public. Government
agencies purchase a wide range of products and services,
including helicopters, paintings, office furniture, clothing,
alcohol, and fuel. Most of the agencies manage a significant
portion of their own purchasing.

THE CIVILIAN ESTABLISHMENT

One prominent sector of the government market is the

federal civilian buying establishment. In the United States this
establishment consists of six categories: departments (e.g., the
Department of Commerce), administration (e.g., the General
Services Administration), agencies (e.g., the Federal Aviation

64
Administration), boards (e.g., the Railroad Retirement Board),
commissions (e.g., the Federal Communications Commission),
and the executive office (e.g., the Office of Management and
Budget). In addition there are several miscellaneous civilian
buying establishments, such as, for example, the Tennessee
Valley Authority.

THE MILITARY ESTABLISHMENT

Another governmental purchasing sector is the federal

military buying establishment, represented in the United States
by the Department of Defense, which purchases primarily
through the Defense Supply Agency and the army, navy, and
air force. The Defense Supply Agency operates six supply
centres, which specialize in construction, electronics, fuel,
personnel support, and industrial and general supplies.

PURCHASING PROCEDURES

Government purchasing procedures fall into two categories:

the open bid and the negotiated contract. Under open-bid
buying, the government disseminates very specific information
about the products and services required and requests bids from
suppliers. Contracts generally are awarded to the lowest bidder.
In negotiated-contract buying, a government agency negotiates
directly with one or more companies regarding a specific
project or supply need. In most cases, contracts are negotiated
for complex projects that involve major research-and-
development costs and in matters where there is little effective
competition.

65
 Consumer-goods marketing

Consumer goods can be classified according to consumer

shopping habits.

CONVENIENCE GOODS

Convenience goods are those that the customer purchases

frequently, immediately, and with minimum effort. Tobacco
products, soaps, and newspapers are all considered convenience
goods, as are common staples like ketchup or pasta.
Convenience-goods purchasing is usually based on habitual
behaviour, where the consumer will routinely purchase a
particular product. Some convenience goods, however, may be
purchased impulsively, involving no habit, planning, or search
effort. These goods, usually displayed near the cash register in
a store in order to encourage quick choice and purchase,
include candy, razors, and batteries. A slightly different type of
convenience product is the emergency good, which is
purchased when there is an urgent need. Such goods include
umbrellas and snow shovels, and these are usually distributed at
a wide variety of outlets so that they will be readily available
when necessary.

SHOPPING GOODS

A second type of product is the shopping good, which

usually requires a more involved selection process than
convenience goods. A consumer usually compares a variety of
attributes, including suitability, quality, price, and style.

66
Homogeneous shopping goods are those that are similar in
quality but different enough in other attributes (such as price,
brand image, or style) to justify a search process. These
products might include automobile tires or a stereo or television
system. Homogeneous shopping goods are often sold strongly
on price.
With heterogeneous shopping goods, product features
become more important to the consumer than price. Such is
often the case with the purchase of major appliances, clothing,
furniture, and high-tech equipment. In this situation, the item
purchased must be a certain size or colour and must perform
very specific functions that cannot be fulfilled by all items
offered by every supplier. With goods of this sort, the seller has
to carry a wide assortment to satisfy individual tastes and must
have well-trained salespeople to provide both information and
advice to consumers.

SPECIALTY GOODS

Specialty goods have particularly unique characteristics and

brand identifications for which a significant group of buyers is
willing to make a special purchasing effort. Examples include
specific brands of fancy products, luxury cars, professional
photographic equipment, and high- fashion clothing. For
instance, consumers who favour merchandise produced by a
certain shoe manufacturer or furniture maker will, if necessary,
travel considerable distances in order to purchase that particular
brand. In specialty-goods markets, sellers do not encourage
comparisons between options; buyers invest time to reach

67
dealers carrying the product desired, and these dealers therefore
do not necessarily need to be conveniently located.

UNSOUGHT GOODS

Finally, an unsought good is one that a consumer does not

know about--or knows about but does not normally think of
buying. New products, such as new frozen-food concepts or
new communications equipment, are unsought until consumers
learn about them through word-of-mouth influence or
advertising. In addition, the need for unsought goods may not
seem urgent to the consumer, and purchase is often deferred.
This is frequently the case with life insurance, preventive car
maintenance, and cemetery plots. Because of this, unsought
goods require significant marketing efforts, and some of the
more sophisticated selling techniques have been developed
from the challenge to sell unsought goods.

Services marketing

A service is an act of labour or a performance that does not

produce a tangible commodity and does not result in the
customer's ownership of anything. Its production may or may
not be tied to a physical product. Thus, there are pure services
that involve no tangible product (as with psychotherapy),
tangible goods with accompanying services (such as a
computer software package with free software support), and
hybrid product-services that consist of parts of each (for
instance, restaurants are usually patronized for both their food
and their service).

68
 Services can be distinguished from products because they
are intangible, inseparable from the production process,
variable, and perishable. Services are intangible because they
can often not be seen, tasted, felt, heard, or smelled before they
are purchased. A person purchasing plastic surgery cannot see
the results before the purchase, and a lawyer's client cannot
anticipate the outcome of a case before the lawyer's work is
presented in court. To reduce the uncertainty that results from
this intangibility, marketers may strive to make their service
tangible by emphasizing the place, people, equipment,
communications, symbols, or price of the service. For example,
consider the insurance slogans "You're in good hands with
Allstate" or Prudential's "Get a piece of the Rock."
Services are inseparable from their production because they
are typically produced and consumed simultaneously. This is
not true of physical products, which are often consumed long
after the product has been manufactured, inventoried,
distributed, and placed in a retail store. Inseparability is
especially evident in entertainment services or professional
services. In many cases, inseparability limits the production of
services because they are so directly tied to the individuals who
perform them. This problem can be alleviated if a service
provider learns to work faster or if the service expertise can be
standardized and performed by a number of individuals (as
H&R Block, Inc., has done with its network of trained tax
consultants throughout the United States).
The variability of services comes from their significant
human component. Not only do humans differ from one
another, but their performance at any given time may differ
from their performance at another time. The mechanics at a

69
particular auto service garage, for example, may differ in terms
of their knowledge and expertise, and each mechanic will have
"good" days and "bad" days. Variability can be reduced by
quality-control measures. These measures can include good
selection and training of personnel and allowing customers to
communicate dissatisfaction (e.g., through customer suggestion
and complaint systems) so that poor service can be detected
and. corrected Finally, services are perishable because they
cannot be stored. Because of this, it is difficult for service
providers to manage anything other than steady demand. When
demand increases dramatically, service organizations face the
problem of producing enough output to meet customer needs.
When a large tour bus unexpectedly arrives at a restaurant, its
staff must rush to meet the demand, because the food services
(taking orders, making food, taking money, etc.) cannot be
"warehoused" for such an occasion. To manage such instances,
companies may hire part-time employees, develop efficiency
routines for peak demand occasions, or ask consumers to
participate in the service-delivery process. On the other hand,
when demand drops off precipitously, service organizations are
often burdened with a staff of service providers who are not
performing. Organizations can maintain steady demand by
offering differential pricing during off-peak times, anticipating
off-peak hours by requiring reservations, and giving employees
more flexible work shifts.

Business marketing

Business marketing, sometimes called business-to-business

marketing or industrial marketing, involves those marketing

70
activities and functions that are targeted toward organizational
customers. This type of marketing involves selling goods (and
services) to organizations (public and private) to be used
directly or indirectly in their own production or service-
delivery operations. Some of the major industries that comprise
the business market are construction, manufacturing, mining,
transportation, public utilities, communications, and
distribution. One of the key points that differentiates business
from consumer marketing is the magnitude of the transactions.
For example, in the mid-1990s, a Boeing 747 airliner, selling
for about $155 million, could take up to four years to
manufacture and deliver once the order was placed. Often, a
major airline company will order several aircraft at one time,
making the purchase price as high as a billion dollars.
Customers for industrial goods can be divided into three
groups: user customers, original-equipment manufacturers, and
resellers. User customers make use of the goods they purchase
in their own businesses. An automobile manufacturer, for
example, might purchase a metal-stamping press to produce
parts for its vehicles. Original-equipment manufacturers
incorporate the purchased goods into their final products, which
are then sold to final consumers (e.g., the manufacturer of
television receivers buys tubes and transistors). Industrial
resellers are middlemen--essentially wholesalers but in some
cases retailers--who distribute goods to user customers, to
original-equipment manufacturers, and to other middlemen.
Industrial-goods wholesalers include mill-supply houses, steel
warehouses, machine-tool dealers, paper jobbers, and chemical
distributors.

71
 Nonprofit marketing

Marketing scholars began exploring the application of

marketing to nonprofit organizations in 1969. Since then,
nonprofit organizations have increasingly turned to marketing
for growth, funding, and prosperity.
Although it is difficult to define "nonprofit" organizations
because of the existence of a number of quasi-governmental
organizations, a study in the mid-1990s found more than one
million private, nonprofit organizations in the United States.
Some experts believe that the way to distinguish between
organizations is according to their sources of funding. The three
major sources are profits, government revenues (such as grants
or taxes), and voluntary donations. In addition, a legally
defined nonprofit organization is one that has been granted tax-
exempt status by the Internal Revenue Service. However, while
nonprofit groups can be defined legally, it is more helpful to
focus on the specific marketing activities that need to be
performed within the organization's environment. Museums,
hospitals, universities, and churches are all examples of
nonprofit organizations. Although many individuals may
believe that nonprofit organizations have only a small impact
on the economy, the operating expenditures of private nonprofit
organizations now represent a significant percentage of the U.S.
gross national product. In addition, many of these are
substantial enterprises. For example, Girl Scout cookies, sold
by Girl Scouts of America, constitute 10 percent of all cookies
sold in the United States.

Social marketing

72
 Social marketing employs marketing principles and
techniques to advance a social cause, idea, or behaviour. It
entails the design, implementation, and control of programs
aimed at increasing the acceptability of a social idea or practice
that would benefit the adoptors or society. Social ideas can take
the form of beliefs, attitudes, and values, such as human rights.
Whether social marketers are promoting ideas or social
practices, their ultimate goal is to alter behaviour. In order to
accomplish this behaviour change, social marketers set
measurable objectives, research their target group's needs,
target their "products" to these particular "consumers," and
effectively communicate their benefits. In addition, social-
marketing organizations have to be constantly aware of changes
in their environments and must be able to adapt to these
changes.

Place marketing

Place marketing employs marketing principles and

techniques to advance the appeal and viability of a place (town,
city, state, region, or nation) to tourists, businesses, investors,
and residents. Among the "place sellers" are economic
development agencies, tourist promotion agencies, and mayors'
offices. Place sellers must gain a deep understanding of how
place buyers make their purchasing decisions. Place-marketing
activities can be found in both the private and public sectors at
the local, regional, national, and international levels. They can
range from activities involving downtrodden cities trying to
attract businesses to vacation spots seeking to attract tourists. In
implementing these marketing activities, each locale must adapt

73
to external shocks and forces beyond its control
(intergovernmental power shifts, increasing global competition,
and rapid technological change) as well as to internal forces
and decline cycles.

ECONOMIC AND SOCIAL ASPECTS OF

MARKETING

Sometimes criticized for its impact on personal economic

and social well-being, marketing has been said to affect not
only individual consumers but also society as a whole. This
section briefly examines some of the criticisms raised and how
governments, individuals, and marketers have addressed them.

Marketing and individual welfare

Criticisms have been leveled against marketers, claiming

that some of their practices may damage individual welfare.
While this may be true in certain circumstances, it is important
to recognize that, if a business damages individual welfare, it
cannot hope to continue in the marketplace for long. As a

74
consequence, most unfavourable views of marketing are
criticisms of poor marketing, not of strategically sound
marketing practices.
Others have raised concerns about marketing by saying that
it increases prices by encouraging excessive markups.
Marketers recognize that consumers may be willing to pay
more for a product--such as a necklace from Tiffany and Co.--
simply because of the associated prestige. This not only results
in greater costs for promotion and distribution, but it allows
marketers to earn profit margins that may be significantly
higher than industry norms. Marketers counter these concerns
by pointing out that products provide not only functional
benefits but symbolic ones as well. By creating a symbol of
prestige and luxury, Tiffany's offers a symbolic benefit that,
according to some consumers, justifies the price. In addition,
brands may symbolize not only prestige but also quality and
functionality, which gives consumers greater confidence when
they purchase a branded product. Finally, advertising and
promotions are often very cost-effective methods of informing
the general public about items and services that are available in
the marketplace.
A few marketers have been accused of using deceptive
practices, such as misleading promotional activities or high-
pressure selling. These deceptive practices have given rise to
legislative and administrative remedies, including guidelines
offered by the Federal Trade Commission (FTC) regarding
advertising practices, automatic 30-day guarantee policies by
some manufacturers, and "cooling off" periods during which a
consumer may cancel any contract signed. In addition,
professional marketing associations, such as the Direct

75
Marketing Association, have promulgated a set of professional
standards for their industry.

Marketing and societal welfare

Concern also has been raised that some marketing practices

may encourage excessive interest in material possessions,
create "false wants," or promote the purchase of nonessential
goods. For example, in the United States, children's Saturday
morning television programming came under fire for promoting
materialistic values. The Federal Communications Commission
(FCC) responded in the early 1990s by regulating the amount
of commercial time per hour. In many of these cases, however,
the criticisms overstate the power of marketing
communications to influence individuals and portray members
of the public as individuals unable to distinguish between a
good decision and a bad one. In addition, such charges cast
marketing as a cause of social problems when often the
problems have much deeper societal roots.
Marketing activity also has been sometimes criticized
because of its control by strong private interests and its neglect
of social and public concern. While companies in the cigarette,
oil, and alcohol industries may have significant influence on
legislation, media, and individual behaviour, organizations that
focus on environmental, health, or education concerns are not
able to wield such influence and often fail to receive
appropriate recognition for their efforts. While there is clearly
an imbalance of power between private interests and public
ones, in the late 20th century, private companies have received
more praise for their marketing efforts for social causes.

76
 Marketing's contribution to individuals
and society

Although some have questioned the appropriateness of the

marketing philosophy in an age of environmental deterioration,
resource shortages, world hunger and poverty, and neglected
social services, numerous firms are commendably satisfying
individual consumer demands as well as acting in the long-term
interests of the consumer and society. These dual objectives of
many of today's companies have led to a broadening of the
"marketing concept" to become the "societal marketing
concept." Generating customer satisfaction while at the same
time attending to consumer and societal well-being in the long
run are the core concepts of societal marketing.
In practicing societal marketing, marketers try to balance
company profits, consumer satisfaction, and public interest in
their marketing policies. Many companies have achieved
success in adopting societal marketing. Two prominent
examples are The Body Shop International PLC, based in
England, and Ben & Jerry's Homemade Inc., which produces
ice cream and is based in Vermont. Body Shop's cosmetics and
personal hygiene products, based on natural ingredients, are
sold in recycled packaging. The products are formulated
without animal testing, and a percentage of profits each year is
donated to animal rights groups, homeless shelters, Amnesty
International, rain-forest preservation groups, and other social
causes. Ben & Jerry's donates a percentage of its profits to help
alleviate social and environmental problems. The company's
corporate concept focuses on "caring capitalism," which
involves the product as well as social and economic missions.

77
Marketing has had many other positive benefits for individuals
and society. It has helped accelerate economic development and
create new jobs. It has also contributed to technological
progress and enhanced consumers'

78
PART TWO

TOURISM

79
 Tourism - The Worlds Biggest Industry

Against the background. of unparalleled growth in the

latter half of the twentieth century, tourism now finds itself at a
crossroads in its development. On the one hand, it is heralded
as ‘the world’s biggest industry’ by a number of global
organisations including the World Travel and Tourism Council
(WTTC) and the World Tourism Organisation (WTO), which
highlights the fact that tourism overtook both crude petroleum
and motor vehicles to become the world’s number one export
earner in 1994. Its economic significance is also illustrated by
the fact that tourism receipts were greater than the world’s
exports of other selected product groups, including electronic
equipment, clothing, textiles and raw materials.
In addition, receipts from international tourism have achieved
growth rates in excess of exports of commercial services and
merchandise exports during the period 1984 to 1994. For the
period 1985 to 1995 the trend is similar, with the following
average annual percentage growth rates:
 Tourism l2per cent
 Commercial services 12 per cent
 Merchandise exports 10 per cent
WTO data also indicate rapid and sustained growth in
international tourist arrivals and receipts from tourism over the
last 30 years. Today, tourism is seen as a major contributor to
global economic development, creating employment and
generating wealth on a truly international scale. An increasing

80
number of countries rely heavily on receipts from tourism for
their economic and social well-being.
In direct contrast to this very positive outlook for the
industry, many national governments are reluctant to invest
public funds in tourism development and promotion, with
tourism spending often being cut when more pressing social
and economic needs arise. The decisions, in 1997, by the
governments of Canada, the United States of America and
Belgium to transfer responsibility, for tourism to private sector
enterprises or regional authorities serve to illustrate this point
well. In Britain, the funding of the English Tourist Board has
been cut drastically since the early 1990s, the decision of a
government that considered the industry to he sufficiently
mature and able to fund its own expansion with diminishing
public financial support. At a time of increasing corrcern for the
environment and the retention of cultural identities, tourism is
also viewed by governments and consumers alike as a
potentially destructive force, causing harmful environmental
and socio-cultural impacts in destination areas and on host
communities. Paradoxically, it is not difficult to argue that the
withdrawal of public funding and control from tourism
development may well accelerate the industry’s harmful
environmental and socio-cultural effects.
It is against this background of a complex and rapidly
expanding industry seeking to maintain its credibility and
promote its economic benefits, often in the face of declining
governmental and host community support.

81
The Business of Hotels

I The Importance of Hotels

Hotels play an important role in most countries in

providing facilities for the transaction of business, for meetings
and conferences, for recreation and entertainment. In that sense
hotels are as essential to economies and societies as are
adequate transport, communication and retail distribution
systems for various goods and services. Through their facilities
hotels contribute to the total output of goods and services,
which makes up the material well-being of nations and
communities.
In many areas hotels are important attractions for
visitors who bring to them spending power and who tend to
spend at a higher rate than they do when they are at home.
Through visitor spending hotels thus often contribute
significantly to local economies both directly, and indirectly
through the subsequent diffusion of the visitor expenditure to
other recipients in the community.

82
In areas receiving foreign visitors, hotels are often important
foreign currency earners and in this way may contribute
significantly to their countries’ balance of payments.
Particularly in countries with limited export possibilities, hotels
may be one of the few sources of foreign currency earnings.
Hotels are important employers of labour. Thousands of
jobs are provided by hotels in the many occupations that make
up the hotel industries in most countries; many others in the
industry are self—employed and proprietors of smaller hotels.
The role of hotels as employers is particularly important in
areas with few alternative sources of employment, where they
contribute to regional development.
Hotels are also important outlets .for the products of
other industries. In the building and modernization of hotels
business is provided for the construction industry and related
trades. Equipment, furniture and furnishings are supplied to
hotels by a wide range of manufacturers. Food, drink and other
consumables are among the most significant daily hotel
purchases from farmers, fishermen, food and drink suppliers,
and from gas, electricity and water undertakings. In addition to
those engaged directly in hotels, much indirect employment is,
therefore, generated by hotels for those employed in industries
supplying them.
Last but not least, hotels are an important source of
amenities .for local residents. Their restaurants, bars and other
facilities often attract much local custom and many hotels have
become social centres of their communities.

Travel and Hotels

83
 Staying away from home is a function of travel and
three main phases may be distinguished in the development of
travel in the northern hemisphere.
Until about the middle of the nineteenth cenruiy the
bulk of journeys were undertaken for business and vocational
reasons, by road, by people travelling mainly in their own
countries. The volume of travel was relatively small, confined
to a small fraction of the population in any country, and most of
those who did travel, did so by coach. Inns and similar
hostelries along the highways and in the principal towns
provided the means of accommodation well into the nineteenth
century.
Between about 1850 and about 1950 a growing
proportion of travellers went away from home for other than
business reasons and holidays came to represent gradually an
important reason for a journey. For a hundred years or so, the
railway and the steamship dominated passenger transportation,
and the new means of transport gave an impetus to travel
between countries and between continents. Although the first
hotels date from the eighteenth century, their growth on any
scale occurred only in the nineteenth century, when first the
railway and later the steamship created sufficiently large
markets to make the larger hotel possible. Hotels together with
guest houses and boarding houses dominated the
accommodation market in this period.
By about the middle of the twentieth century in most
developed countries of the world (a little earlier in North
America and a little later in Europe) a whole cycle was
completed and most traffic returned to the road, with the motor
car increasingly providing the main means of passenger

84
transportation. Almost concurrently the aircraft took over
unmistakably both from the railways and from shipping as the
principal means of long-distance passenger transport. On many
routes holiday traffic came to match and often greatly exceed
other traffic. A growing volume of travel away from home
became international. Hotels entered into competition with new
forms of accommodation — holiday centres and holiday
villages in Europe, motels in North America, and various self—
catering facilities for those on holiday.

Two Centuries of Hotelkeeping

Hotels are some two hundred years old. The word

‘hotel’ itself came into use in England with the introduction in
London, after 1760 , of the kind of establishment then common
in Paris, called ‘hotel garni’, or a large house, in which
apartments were let by the day, week or trench. Its appearance
signified a departure from the customary method of
accommodating guests in inns and similar hostelries, into
something more luxurious and even ostentatious. Hotels with
managers, receptionists and uniformed staff arrived generally
only at the beginning of the nineteenth century and until the
middle of that century their development was relatively slow.
The absence of good inns in Scotland to someextent accelerated
the arrival of the hotel there; by the end of the eighteenth
century Edinburgh, for example, had several hotels where the
traveller could get elegant and comfortable rooms. Hotels are
also known to have made much progress in other parts of
Europe in the closing years of the eighteenth and early years of

85
the nineteenth century, where at the time originated the idea of
a resort hotel.
In North America early accommodation for travellers
followed a similar pattern as in England, with most inns
originating in converted houses, but by the turn of the
eighteenth century several cities on the eastern seaboard had
purpose—built hotels and in the first half of the nineteenth
century hotel building spread across America to the Pacific
Coast. The evolution from innkeeping to hotelkeeping,
therefore, proceeded almost in parallel in the Old and in the
New Worlds and the rise of the hotel industries on both sides of
the Atlantic had probably more in common than is generally
recognized. What America might have lacked in history and
tradition, it more than made up in pioneering spirit, in intense
rivalry between cities and entrepreneurs, and in the sheer size
and growth of the travel market.
In the last century hotels became firmly established not only as
centres commercial hospitality for travellers, but often also as
important social centres of their communities. Their building,
management and operation became specialized activities, with
their own styles and methods. The present century brought
about growing specialization and increased sophistication in the
hotel industries of most countries, as well as their growth and
expansion. But the growth and the diversity of hotel operations
has been also matched by the growth and diversity of
competition in the total accommodation
market.
Information about accommodation facilities in
individual countries essentially reflects the designations used
for them by the countries concerned and the coverage of

86
various types in the available statistics. Only very broad inter-
country comparisons are possible. One source is the annual
report of the Tourism Committee of the Organisation for
Economic Co-operation and Development (OECD), which
distinguishes between beds available in hotels and similar
establishments, and in what is described as supplementary
accommodation.
The ratio of beds in hotels and similar establishments to
beds in supplementary accommodation gives an indication of
the relative importance of the hotel sector in the total
accommodation market of individual countries. In most
countries the accommodation profile tends to reflect the relative
importance of foreign and domestic users, of leisure and
business travel, and of other influences. In many countries
hotels and similar establishments appear to be minority
providers of accommodation.

Hotel Location

Hotel services are supplied to their buyers direct in

person; they are consumed at the point of sale, and they are also
produced there.
Hotel services must be, therefore, provided where the demand
exists and the market is the dominant influence on hotel
location. In fact, location is part of the hotel product. In turn,
location is the key influence on the viability of the business, so
much so that a prominent entrepreneur could have said with
conviction and with much justification that there are only three
rules for success in the hotel business: location, location,
location.

87
 We have seen earlier that from the early days all
accommodation units followed transport modes, Inns and other
hostelries were situated along the roads and at destinations,
serving transit and terminal traffic. The rapid spread of railways
marked the emergence of railway hotels in the nineteenth
century. In the twentieth century motor transport created a new
demand for accommodation along the highways and the
modern motel and motor hotel have been distinctive responses
to the new impetus of the motor car. A similar but les
pronounced influence was passenger shipping, which
stimulated hotel development in ports, and more recently air
transport, which brought about a major growth of hotels in the
vicinity of airports and air terminals.
Secondly, although this is closely related to transport,
many hotels are located to serve first and foremost holiday
markets. In their areas of highest concentration, holiday visitors
are accommodated in hotels in localities whcre the resident
population may represent only a small proportion of those
present at the time, as is the case in many resorts.
The third major influence on hotel location is the
location of economic activity and of industry and commerce in
particular. Whilst again not separable from transport
development, industrial and commercial activities create
demand for transit and termInal accommodation in industrial
and commercial centres, in locations not frequented by holiday
visitors.
Different segments of the travel market give rise to
distinctive patterns of demand for hotel accommodation and
often distinctive types of hotels. In business and industrial
centres hotels normally achieve their highest occupancies on

88
weekdays and in resorts in the main holiday seasons; their
facilities and services reflect the requirements of businessmen
and of holiday visitors respectively. Between these clearly
defined segments come other towns and areas, such as busy
commercial centres with historical or other attractions for
visitors, which may achieve a more even weekly and annual
pattern of business.

Types of Hotels

The rich variety of hotels can be seen from the many

terms in use to denote particular types. Hotels are referred to as
luxury, resort, commercial, residential, transit, and in many
other ways. Each of these terms may give an indication of
standard or location, or particular type of guest who makes up
most of the market of a particular hotel, but it does not describe
adequately its main characteristics. These can be only seen
when a combination of terms is applied to an hotel, each of
which describes a particular hotel according to certain criteria.
It is helpful to appreciate at this stage what the main types of
hotels are, by adopting particular criteria for classifying them,
without necessarily attaching precise meanings to them.
• Thus according to location hotels are in cities and in large and
small towns, in inland, coastal and mountain resorts, and in the
country.
• According to the actual position of the hotel in its location it
may be in the city or town centre or in the suburbs, along the
beach of a coastal resort, along the highway.

89
• By reference to its relationship with particular means of
transport_there are motels and motor hotels, railway hotels,
airport hotels (the terms also indicating location).
• According to the purpose of visit and the main reason for their
guests’ stay, hotels may become known as business hotels,
holiday hotels, convention hotels, tourist hotels.
• Where there is a pronounced tendency to a short or long
duration of guests’ stay it may be an important hotel
characteristic, so that the hotel becomes a transit or a residential
hotel.
• According to the range of its facilities and services a hotel
may be open to residents and non-residents, or it may restrict
itself to providing overnight accommodation and at most
offering breakfast to its guests, and be a hotel garni or
apartment hotel.
• Whether a hotel holds a licence for the sale of alcoholic liquor
or not, is an important dimension in the range of available hotel
services, and the distinction between licensed and unlicensed
hotels is, therefore, of relevance in describing a hotel in most
countries.
• There is no universal agreement on how hotels should he
described according to size, but by reference to their room or
bed capacities we normally apply the term small hotel to one
with a small amount of sleeping accommodation, the term large
hotel to one with several hundred beds or bedrooms, and the
term medium size hotel to one somewhere between the two,
according to the size structure of the hotel industry in a
particular country.
• Whatever the criteria used in hotel guides and in classification
and grading systems in existence in many countries, normally

90
at least four or five classes or grades have been found necessary
to distinguish adequately in the standards of hotels and these
have found some currency among hotel users. The extremes of
luxury and basic standards, sometimes denoted by five stars
and one star respectively are not difficult concepts; the mid
point on any such scale denotes the average without any
particular claims to merit. The intervening points are then
standards above average but falling short of luxury (quality
hotels) and standards above basic (economy).
Last but not least comes the ownership and management.
Individually owned independent hotels, which may he managed
by the proprietor or by a salaried manager, have to he
distinguished from chain or group hotels, invariably owned by
a company. Independent hotels may belong to a hotel
consortium or cooperative. A company may operate its hotels
under direct management or under a franchise agreement.
The above distinctions then enable us to describe a particular
hotel in broad terms, concisely, comprehensively and
meaningfully, e.g.:
• Terminus Hotel is a medium-sized economy town centre
unlicensed hotel, owned and managed by a small company,
catering mainly for tourists visiting the historic town and the
surrounding countryside.
• Hotel Excelsior is a large independent luxury hotel on the
main promenade of the coastal resort, with holiday visitors as
its main market.
• The Crossroads Hotel is a small licensed quality transit motor
hotel, operated as a franchise, on the outskirts of the city, which
serves mainly traveling

91
 F Hotel Products and Markets

The aim of this subject is to outline the facilities and services

provided by hotels, who are the people who use hotels, why
they use hotels, and what influences their choice of particular
hotels. In providing answers to these questions, we can
formulate a conceptual model of a hotel, which attempts to
explain in simple terms how particular hotel products meet the
needs of particular hotel markets, and establish a basis for a
more detailed examination of the hotel business.

The Hotel as a Total Market Concept

From the point of view of its users, a hotel is an

institution of commercial hospitality, which offers its facilities
and services for sale, individually or in various combinations,
and this concept is made up of several elements.
Its location places the hotel geographically in or near a
particular city, town or village; within a given area location
denotes accessibility and the convenience this represents,
attractiveness of surroundings and the appeal this represents,
freedom from noise and other nuisances, or otherwise.
Its facilities which include bedrooms, restaurants, bars,
function rooms, meeting rooms and recreation facilities such as
tennis courts and swimming pools represent a repertoire of
facilities for the use of its customers, and these may be
differentiated in type, size, and in other ways.
I ts service comprises the availability and extent of
particular hotel services provided through its facilities, the style
and quality of all these in such terms as formality and

92
informality, degree of personal attention, and speed and
efficiency.
Its image may he defined as the way in which the hotel
portrays itself to people and the way in which it is perceived as
portraying itself by them. It is a byproduct of its location,
facilities and service, but it is enhanced by such factors as its
name, appearance; its associations by who stays there and who
eats there; by what it says about itself and what other people
say about it.
Its price expresses the value given by the hotel through
its location, facilities, service and image, and the satisfaction
derived by its users from these elements of the hotel concept.
The individual elements assume greater or lesser importance
for different people. One person may put location as paramount
and be prepared to accept basic facilities and service for an
overnight day, ignoring the image, as long as the price is within
a limit, to which he is willing to go. Another may be more
concerned with the image of the hotel, its facilities and service.
However, all the five elements are related to each other, and in
a situation of choice most hotel users tend either to accept or
reject as a whole, that is the total concept.
There are varying degrees of adaptability and flexibility
in the hotel concept, ranging from the complete fixity of its
location to the relative flexibility of price, with facilities,
service and image lending themselves to some adaptation in
particular circumstances with time.

Hotel Facilities and Services as Products

93
 In the early days of innkeeping the traveller often had to
bring his own food to places where he stayed the night-bed for
the night was the only product offered But soon most
establishments extended their hospitality to providing at least
some food and refreshments. Today many apartment hotels,
hotels gami, and motels confine their facilities to sleeping
accommodation, with little or no catering provision. But the
typical hotel as we know it today, normally provides not only
accommodation, but also food and drink, and sometimes other
facilities and services, and makes them available not only to its
residents but also to non-residents.
Although the range of hotel facilities and services may
extend as far as to cater for all or most needs of their customers,
however long their stay, and for a hotel to become a self-
contained community with its own shops, entertainments and
recreation facilities, it is helpful at this stage to describe the
hotel concept in a simpler form, by including only the main
customer needs typically met by most hotels.
The main customer demand in most hotels is for
sleeping accommodation, food and drink, and for food and
drink for organized groups. These four requirements then relate
to accommodation, restaurants, bars and functions, as the
principal hotel products.
Sleeping accommodation is provided for hotel residents
alone. Restaurants and bars meet the requirements of hotel
residents and non-residents alike, even though separate
facilities may be sometimes provided for them. Functions are
best seen as a separate hotel product bought by organized
groups; these groups may be resident in the hotel as, for
example, participants in a residential conference, or be non-

94
residents, such as a local club or society, or the group may
combine the two. The total hotel concept — of location,
facilities, service, image and price - can he, therefore, sub-
divided according to the needs of the customer and the
particular facilities brought into play to meet them. The cluster
of elements of the total hotel concept is then related to each
particular hotel product. Each hotel product contains the
elements of the location, facilities, services, image and price, to
meet a particular customer need or set of needs. The first
approach to the segmentation of the hotel market is, therefore,
taken by dividing hotel users according to the products bought.
Corresponding to each hotel product there are the
buyers of that product who constitute a market for it.

Hotel Accommodation Markets

Hotel users who are buyers of overnight

accommodation may be classified according to the main
purpose of their visit to a particular location into three main
categories as holiday, business and other users.
Holiday users include a variety of leisure travel as the main
reason for their stay in hotels, ranging from short stays in a
particular location on the way to somewhere else to weekend
and longer stays when the location represents the end of a
journey. Their demand for hotel accommodation tends to be
resort oriented, seasonal and sensitive to price.
Business users are employees and others travelling in
the course of their work, people visiting exhibitions, trade fairs,
or coming together as members of professional and commercial
organizations for meetings and conferences. Their demand for

95
hotel accommodation tends to be town- and city-oriented, non-
seasonal and less price-sensitive, except in the case of some
event attractions such as conferences and exhibitions, which
may he usefully regarded as a separate category.
Other hotel users comprise visitors to a particular location for a
variety of reasons other than holiday or business, e.g. those
attending such family occasions as weddings, parents visiting
educational institutions, visitors to special events, and common
interest groups meeting for other than business and vocational
reasons, re-locating families and individuals seeking permanent
accommodation in an area and staying temporarily in an hotel,
people living in an hotel permanently. The characteristics of
this type of demand are more varied than those of the first and
second group, and it is, therefore, often desirable to sub-divide
it further for practical purposes.
Within and between the three main groups, which comprise the
total market for hotel accommodation, there are several
distinctions important to individual hotels. We have noted
already that some hotel users give rise to demand for transit and
short—stay accommodation; others are terminal visitors with a
longer average stay. Also, for example, much business
demand is generated by a relatively small number of travellers
who are frequent hotel users; most holiday and other demand
comes from a very large number of people who use hotels only
occasionally. Moreover, business users often book
accommodation at short notice, whilst holiday and other users
tend to do so longcr in advance. And in allthree groups some
people are individual hotel users, and others stay in hotels in
groups.

96
 Hotel Catering Markets

Hotel restaurants, bars and function rooms may be

conveniently grouped together as its food and beverage or
catering facilities, and the meals and refreshments they provide
as the hotel food and beverage or catering products.
Corresponding to them there are again buyers of these products
who constitute the hotel catering markets and who may be
classified in various ways. For our purposes there is a basic
distinction between the demand exercised by hotel residents, by
non-residents, and by organized groups.
The first category of users of hotel restaurants and bars
is related to the basic function of the hotel in providing
overnight sleeping accommodation, and consists of hotel
residents, whom we have classified earlier as holiday, business
and other users Their use of hotel catering facilities tends to be
influenced by the reason for their hotel stay and by the terms on
which they stay. Breakfast is their common hotel purchase, but
otherwise a hotel resident may have his meals in his hotel or
elsewhere, and he is more likely to be a hotel restaurant or bar
customer in the evenings than at midday.
The second category is non-residents, individually or in
small groups, when eating out. They may, in fact, be staying at
other hotels or accommodation establishments or with friends
or relative or be day visitors to the area, for holiday, business or
other reasons Alternatively they are local residents, for whom
the hotel restaurants and bars represent outlets for meals and
refreshments, as a leisure activity or as part of their business
activities. This category tends to represent important hotel users
at midday as well as in the evenings, particularly at weekends.

97
 The third category of users of hotel catering facilities is
organized groups who make advance arrangements for
functions at the hotel, which may call for separate facilities and
organizational arrangements. They include local clubs,
societies, business and professional groups, as well as
participants in meetings and conferences originating from
outside the area.
Hotel catering products represent a greater diversity
than its accommodation products and it is often
correspondingly more difficult to classify them and the markets
for them in practice. Moreover, hotels are not alone in
supplying them. In the market for meals and refreshments for
individuals and groups a hotel competes not only with other
hotels, but also with restaurants outside hotels, pubs and clubs,
to name but a few other types of outlet.
Therefore, catering in hotels is a separate hotel function,
with its own objectives, policies and strategies, and with its
own organization.
Hotel Demand Generating Sources

For most people the use of hotels represents what is

known as derived demand because few stay or eat in hotels for
its own sake; their primary reasons for doing so lie in their
reasons for visiting an area or for spending their time there in
particular ways. When describing hotel accommodation and
catering markets we have seen that hotel users have different
degrees of freedom and choice as to whether they buy hotel
services or not. Some have
few or no alternatives; for them only hotels provide the
facilities and services which they require in a particular area in

98
pursuit of their business, vocational and other interests; the
incidence of their hotel usage arises to a great extent from their
working circumstances. For many others the use of hotels is a
matter of choice; they do so in their pursuit of leisure and
recreation; for them hotel usage involves a discretionary use of
their time and money. This distinction helps us identify the
demand generating sources for hotels in a given area, which are
of three main types-institutional, recreational and transit.
Institutional sources include industrial and commercial
enterprises, educational institutions, government establishments
and other organizations in the private and public sector, whose
activities are involved in the economic life of the community
and in its administration. These institutions generate demand
for hotels through their own visitors and their other
requirements for hotel facilities and services.
Recreational sources include historical, scenic and other site
attractions and event attractions, which generate demand for
hotels from tourists; local events and activities in the social and
cultural life of the community, which generate demand from
clubs, societies and other organizations; happenings of
significance to individuals and families.
The third source of demand stems from individuals and
groups with no intrinsic reason for spending time in a particular
locality, other than being on the way somewhere else and the
need to break a journey. This source of demand is closely
related to particular forms of transport; it expresses itself on
highways, at ports and at airports, and may be described as
transit.
It will be readily apparent that this view of demand
generating sources for hotels is closely related to several

99
aspects of the hotel business considered earlier — for example,
to the three-fold classification of the hotel accommodation
market into holiday, business and other users; to the three main
influences on hotel location — travel, holidays and economic
activity; and to the types of hotel. By adopting in each case a
somewhat different viewpoint, it is possible to highlight the
interdependence between the location, markets and products of
hotels.

Hotel Market Areas

We can define a hotel market in several ways by

reference to the people who buy hotel services, as a network of
dealings between the hotel and its users, or as an area which a
hotel serves. In the first two approaches hotel users may come
from within the area, from various parts of the country, and
from abroad; we then refer to the local, domestic and foreign
markets, and subdivide them in appropriate ways. In the third
approach described below we view the hotel market area as a
physical area served by the hotel.
For hotel accommodation it is necessary to identify all
the institutional and recreational sources of demand, which may
be served by a particular hotel. The area drawn in this way
round the hotel may extend from its immediate vicinity to a
radius of several miles or more. How far it does extend depends
on the geographical distribution of the demand generating
sources, the mode of transport used by the hotel users of each
source, and the availability of other facilities in the area. The
head office of a large firm, a university, a historic castle, and a
town which is a festival centre, may be all within a market area

100
of a hotel, if the hotel is reasonably accessible from these
points, and if its location at least matches the location of other
hotels. The market area may coincide for a number of hotels
within close proximity of each other, which offer a similar
concept in terms of facilities, service, image and price. On the
periphery the market area for a hotel may overlap with the
market areas of other hotels some distance away. At periods of
peak demand it may extend further than at times of low
demand. For transit the accommodation market area is related
to the journeys undertaken through the area — their origin and
destination, the method of transportation, the time of day, the
time of year and other circumstances of the journeys.
For hotel catering services the market area depends on
market density — the availability of spending power within an
area, as well as on the accessibility of the hotel to the different
sources of demand, and on the availability of other catering
services in the area. In this there is a close analogy with the
concept of a catchment area for other retail outlets, as far as the
resident population is concerned. How far do people go from
where they live to do their shopping? The distance may vary
according to the purchase they are to make. Similarly there may
be a smaller market area for hotel lunches than for hotel dinners
and functions, because close proximity to the hotel may he a
more important consideration for a midday meal than for an
evening out.

Hotel Market Segmentation

The market for hotel products may be divided into

several components or segments and this enables individual

101
hotels to identify their actual and potential users according to
various criteria. Segmentation then provides a basis for the
marketing of hotel products, for paying close attention to the
requirements of different users, and for monitoring the
performance in the markets chosen by a hotel.
We divided hotel users, according to the product bought
by them, into buyers of accommodation, food, drink and
functions. We divided the accommodation market, according to
the reasons for the users’ stay, into holiday, business and other
users, and the hotel catering market into hotel residents, non-
residents and functions. According to the origin of demand we
also identified institutional, recreational and transit sources of
demand.
Another basis for segmentation is the needs of hotel users and
the means_they have to pay for their satisfaction, by dividing
them according to their socio economic characteristics. Socio-
economic classifications seek to group people according to
their occupation and employment status. For example, the
British Joint Industry Committee for National Readership
Surveys (JICNARS) defines social grades as shown in the
following table:
Social Grade Definitions
Social grade Social status Occupation
A Upper middle Higher
class managerial,
administrative
or professional
B Middle class Intermediate
managerial,
adminisniative or

102
 professional
C1 Lower middle Supervisory or
class clerical, and
juniormanagerial,
administrative or
professional
C2 Skilled working Skilled manual
class workers
D Working class Semi- and
unskilled manual
E Those at the State pensioners
lowest level of or widows (no
subsistence other earner),
casual or lowest
grade workers

Social grade A might be expected to stay in luxury and

quality hotels, B in medium hotels, C in economy hotels.
However, this is an oversimplification, because the same
people may interchange between segments according to the
circumstances in which they find themselves. A businessman
on an expense account may stay in a quality hotel, but
travelling for pleasure with his family he may stay in a lower
grade hotel. Moreover, the incidence of hotel usage among DE
groups is minimal. Nevertheless, segmentation by socio-
economic criteria is an important approach to market
segmentation. For some purposes age, family composition, life
cycle stage, or other criteria may be more appropriate.
A concomitant of market segmentation is product
branding, with a view to differentiating an hotel from others in

103
the minds of buyers, long established in other consumer
industries. Some hotel groups have focused on branded
segments distinguished by levels of service; examples include
Holiday Inn upmarket Crowne Plaza, core brand Holiday Inn
and limited service Garden Court.
Other brands have been created by grouping like operations,
such as Forte Posthouses and Whitbread Lanshury Hotels, or by
acquisition, such as Porte Crest and Mount Charlotte Thistle.
We anticipate that product segmentation will assume
even greater significance in the future development of hotel
companies. It is an effective method for hotel companies to
maintain or expand market share and in some instances create
new markets.
Product branding will become more focussed and will
reflect increasing levels of segmentation.
In the light of this, the future of the ‘all purpose hotel’ is
doubtful in terms of its competitiveness in the market place.
Buying and Paying for Hotel Services
It is important to understand how a buying decision is made,
who makes it, and who pays for the hotel services bought.
The buying decision itself may be basically of two kinds
—deliberate or impulsive. Before embarking on journeys,
business people may ask secretaries to reserve hotel rooms in
the towns they are to visit for specified nights. A family may
arrive at their choice of holiday hotel after a scrutiny of hotel
guides. A society may make several inquiries before choosing
the venue for their annual dinner dance. These are deliberate
buying decisions made with some _advance planning and with
advance reservations. A tourist looking for somewhere to stay
when travelling by car, or on arrival at the railway station or

104
airport, is likely to make an impulse decision, in much the same
way as a couple walking through the streets of a town and
‘discovering’ a restaurant which appears to be to their liking.
Purchases of hotel products are both deliberate and impulse
purchases and most hotels respond to both, although different
operational policies and procedures normally apply to each.
Many people make their own arrangements for
travelling and for staying in hotels. However, many hotel
bookings are made by people who do it for others: the secretary
for the boss, the travel agent for the client, the business travel
department of a large company for its employees. In these
circumstances it is important to know who the buying agent is
and where that person is located, if the knowledge derived from
the analysis of the hotel demand generating sources is to be
applied to bringing about sales. Most hotels can no longer hope
to fill their beds, restaurants and bars by simply waiting for the
guest.
According to the source of payment for hotel services,
hotel users are also of two basic kinds — those who pay
themselves and those whose hotel bills are covered or
reimbursed for them. Most leisure use of hotels represents
personal expenditure out of disposable incomes, the bulk of
business use of hotels in the wide sense is paid for directly or
indirectly by third parties — employers and other agencies on
behalf of the guest. Although many business users have no
fixed limits as to the charges they incur in hotels, many tend to
observe what they and their organizations regard as acceptable.
The understanding of these practices is important to hotels too.
The decision on the market segments to be catered for is closely

105
related to decisions on pricing and we have seen that price is an
integral element of each hotel’s total concept.

Hotel Marketing Orientation

Hotels serve people and their success depends on how

well they serve them in places where they wish to be served.
This is only a way of stating in the simplest of tenns the
application to hotel operations of the marketing concept, which
is concerned with the consumer as a starting point in the
conduct of business.
The marketing concept is beginning to be understood by
hoteliers. Although some continue to regard sales andmarketing
as synonymous, most hotels no longer operate in the seller’s
market and even massive sales effort is not likely to generate a
sustained high volume of business, if consumer needs are not
genuinely met in the planning, design and subsequent operation
of an hotel.
The basic hotel concept stresses the view of the hotel, as
it is seen by the hotel user rather than the hotel operator, as a
business to meet the needs of hotel users. Some of these needs
are basic and physical, such as sleeping in clean beds or eating
wholesome meals; others such as those met by the image of the
hotel are acquired needs, which reflect what a person aims to be
as an individual. A successful hotel must seek to meet both sets
of needs. So that an hotel can meet the needs of hotel users,
individual hotel services have to be seen as hotel products sold
to particular markets. A hotel cannot be all things to all people.
Each hotel has to achieve a match between its particular
products and particular market segments, i.e. groups of people

106
with more or less similar characteristics and requirements for
hotel services. In this there is a difference between the hotel
accommodation and catering products, in that each may to
some extent cater for different markets. But this difference only
reinforces the need for harmony in the total hotel concept. In
order to achieve the match between hotel products and markets,
there is a need for a careful analysis of the sources of demand
for hotel services in the market area served by the hotel and an
understanding of how hotel services are bought and paid for.
From this model of a hotel a translation can be made to
particular operations. This takes the form of hotel policies,
philosophies and strategies.
Special Features of Hotel Marketing

Marketing is first and foremost about matching products

and markets and in this sense the marketing of hotel services is
in principle no different from the marketing of other consumer
products. But there are special features of hotel products and
markets and hence of hotel marketing.
For most users hotel rooms are a means to an end and
not an end in itself and the demand for them is what is known
as derived demand - the reason for their use may be a business
visit or a holiday or something else but rarely the room itself,
and the same applies to some extent to other hotel services.
The availability of the most important hotel product, the
hotel room, is fixed in time and place. In the short term the
number of rooms or beds on offer cannot be significantly
changed and location is part of the highly perishable product,
which cannot be stored for future sale or follow the customer.
The demand for hotel accommodation and other services

107
fluctuates from day to day, from week to week and from one
part of the year to another. A waste occurs when demand falls
and there is a definite upper limit to the volume of business in a
period of peak demand.
Hotel investment is primarily an investment in land and
buildings and interior assets. The bulk of the capital invested in
the fixed assets of the hotel, combined with the continuity of
hotel activity, gives risc to high fixed costs, which have to be
covered irrespective of the volume of business. Three key
factors are, therefore, critical to a successful hotel operation —
the right location, correct capacity, and a high level of
utilization, all of them imply marketing decisions — first in the
conception of the hotel and in its operation subsequently.
In the conception of the hotel, marketing can contribute first
through a market feasibility study to assess the demand. A
study may identify the best market opportunity for a hotel, a
gap in the market, a location or choice between alternative
locations, for a particular hotel concept; or, given a particular
location, a study can determine the most appropriate hotel
concept. The translation of the concept into an operational
facility then takes place through product formulation and
development. In the operation of the hotel, marketing can
contribute through a continuous process of market research,
product development, promotion, selling, monitoring and
review — the stages of a marketing cycle.
In the planning of a new hotel, there is full scope for the
adherence to the marketing concept from the outset. In an
existing hotel, there is often an important distinction between
the short-and long-term marketing tasks. In the short term the
marketing task may be to adjust customers’ wants to available

108
facilities and services, but the long-term task is to modify the
facilities and services to the customers’ wants.
In the short run our existing facilities and services are given
within narrow limits. We may research the market to see which
market segments are or could be attracted to them, make such
adjustments to our products as are possible, but the main effort
is likely to focus on promotion and selling. With low
occupancies and low utilization of restaurants, bars and
function rooms, in the short run the sales effort becomes
dominant. But it is no excuse for doing just that; it is both
necessary and possible to proceed with changing the products:
toestablish who our customers could be and what their needs
are (market research), and to formulate and develop products
meeting their needs (product formulation and development).
This approach ultimately calls for less sales effort, which is
then designed to demonstrate to people that their needs can be
met; it is of particular importance in hotels.
Marketed commodities and articles are concrete,
physical and capable of measurement; most of them can be
inspected and many of them even tried out before purchase.
Services are less tangible and hotel services particularly so.
Hotel services cannot be easily defined and described in terms
of clearly measurable products and their qualities. They are
often bought individually or as part of a package, and they may
be bought directly by the user or through an intermediary, for
example, a travel agent. In hotels, as in other walks of life, it is
necessary to make it easy to buy only more so.

Property Ownership

109
 An investment in hotels is first and foremost an
investment in land and buildings, which represent the dominant
assets of hotels. Other fixed assets are:
• plant and equipment, including such major items as air
conditioning, boilers, lifts, and heavy kitchen equipment;
• furniture, furnishings, and small equipment;
• china, glass, linen and cutlery.
Accordingly there is a dual nature of investment in
hotels — as an investment in land and buildings and an
investment in interior assets. This distinction has been
recognized in three principal ways in recent years.
First, the building shell may be owned by a developer,
sometimes as part of some larger project, and leascd to anhotel
operator on a rental basis. This is also implied by some hotel
groups, which apply internal rentals to hotels owned by them;
in this way the hotel profits are assessed after taking into
account the notional rental of the land and building.
Secondly, hotel companies make use of sale-and-lease-
back arrangements as a means of financing the investment,
which reduces the capital requirement for the hotel operator.
Thirdly, interior assets may be also leased by the hotel
operator rather than bought, thereby also reducing the capital
requirement.
There are, therefore, various arrangements as to who is
involved in property ownership and in hotel management. A
hotel operator may invest in the property represented by land
and buildings or enter into a leasing arrangement and invest
only in the interior assets, or an operator may enter into a
management contract without any direct capital investment.

110
Property Operation and Maintenance

In large hotels and in hotel groups normally a senior

person is ultimately responsible for technical services who may
be variously described as the technical services, buildings and
services, or works director, officer, or superintendent, or simply
as chief engineer, or by some such title. In large organizations
the technical services may be subdivided between those
responsible for buildings, for engineering, and for other
services.
Although technical considerations may be the direct concern of
hotel management in smaller hotels, they arespecialist activities
normally entrusted to specialist staff and sometimes ‘contracted
out’.
Property operation, maintenance and energy costs are
costs of hotel operation, as distinct from the capital investment
outlay on the assets. They are, therefore, appropriately included
in hotel profit and loss statements.
In the Uniform System of Accounts for Hotels property
operation and maintenance includes costs of repairs and
maintenance of buildings, plant and equipment, furniture and
furnishings, as well as the maintenance of grounds, related
wages and salaries, and work let out on contract. The costs
incurred by hotels contributing to Horwath International reports
in the early 1990.

III.Hotel Organization

Organization is the framework in which various

activities operate. It is concerned with such matters as the

111
division of tasks within firms and establishments, positions of
responsibility and authority, and relationships between them. It
introduces such concepts as the span of control (the number of
subordinates supervised directly by an individual), levels of
management (the number of tiers through which management
operates), delegation (the allocation of responsibility and
authority to designated individuals in the line of ‘command’).
Until not so long ago — about the middle of this
century and even later than that the typical hotel of almost any
size was characterized by a large number of individuals and
departments directly responsible to the hotel manager who was
closely concerned with his guests and with all or most aspects
of the hotel operation. Theremight have been one or more
assistant managers who had little or no authority over such key
individuals as the chef, the head waiter or the housekeeper. The
hotel manager usually combined the ‘mine host’ concept of
hotel keeping with a close involvement in the operation. He
normally had all or most of the technical skills that enter into
the business of accommodating and catering for guests.
Although he might have given more attention to departments in
which he felt confident about his expertise, and less to those in
which his knowledge and skills might have been lacking, his
approach was essentially that of a technician rather than the
manager of a business. Hotels served those who chose to use
them. The financial control was exercised by the owners or by
accountants on their behalf. Personnel management rarely
extended beyond the ‘hiring and firing’ of staff. Hotel buildings
and interiors were not often viewed as business assets required
to produce a return comparable to other commercial
investments; maintenance and energy were cheap.

112
 Several influences have tended to change this profile
generally and the approach to hotel organization in particular in
the second half of the twentieth century. The market for hotels,
the number of hotels, and the size of individual operations have
grown, against the background of economic and social
conditions in most parts of the world. Business and
management thought and practice have found their way into
hotels, with the entry into the hotel business of firms engaged
in other industries, development of hotel education and
training, and higher quality of management. Innovation in hotel
organization, at first largely confined to a few firms in North
America, has spread to others in other countries. These and
other influences have brought about changesin the ways in
which hotels organize their activities today.
Three particular developments illustrate the changes in hotel
organization in post-war Britain. One relates to the grouping of
functions. In the early I 950s hotel reception, uniformed
services and housekeeping were invariably regarded as separate
departments, each reporting directly to the hotel manager;
twenty years later many large hotels had front hall managers,
rooms managers, or assistant managers with specific
responsibilities in this area. Similarly, over the same period in
most large hotels food and beverage managers came to be
appointed, responsible for all the hotel activities previously
organized in restaurants, bars and kitchens under the direct
control of the hotel manager. Secondly, there has been a growth
in specialists. In the early 1950s only a few large hotels had a
staff manager, a public relations officer or a buyer; by the early
1970s personnel, sales and marketing, and purchasing
departments were common features of the large hotels and of

113
hotel groups. Thirdly, where each hotel used to be more or less
self-sufficient in the provision of its various guest services and
supporting requirements, many of these are now provided
through internal rentals and concessions and through specialist
suppliers and operators such as outside bakeries, butcheries and
laundries.
The accommodation function may be described in terms of
reception, uniformed services and housekeeping. Several
typical organizational approaches may be identified in respect
of these activities in practice:
- all three activities operate as separate departments with their
own heads of department;
-reception and uniformed services are grouped together as the
front hail or front house of the hotel under an assistant manager
for whom this is the sole or main responsibility;
- reception and uniformed services are grouped together as a
front hail or front house department with its own head of
department.
- all three activities are grouped together as the rooms
department under an assistant manager for whom this is the
sole or main responsibility;
- all three activities are grouped together as the rooms
department with its own head of department.
The first approach provides for a direct line of responsibility
and authority between each separate head

114
 Rooms

The accommodation function may be described in terms

of reception,uniformed services and housekeeping. Several
typical organizational approaches may be identified in respect
of these activities in practice:
- all three activities operate as separate departments with their
own heads of department;
-reception and uniformed services are grouped together as the
front hail or front house of the hotel under an assistant manager
for whom this is the sole or main responsibility;
- reception and uniformed services are grouped together as a
front hail or front house department with its own head of
department.
- all three activities are grouped together as the rooms
department under an assistant manager for whom this is the
sole or main responsibility;

115
- all three activities are grouped together as the rooms
department with its own head of department.
The first approach provides for a direct line of
responsibility and authority between each separate head of
department and the hotel manager and hence for a close contact
between the two levels of management; however, it extends the
hotel manager’s span of control and he is required to coordinate
the separate departments. The other four approaches are
designed to reduce the hotel manager’s span of control and
provide for a coordination of related activities at an
intermediate level but increase the number of levels through
which management has to operate, and reduce the amount of
direct contact between the hotel manager and the departments
concerned.
Several activities were described in connection with
rooms, which may be arranged differently in large hotels:
In most hotels advance reservations form an integral
part of hotel reception and the same employees deal with them
and with other reception tasks. But advance reservations may
be dealt with in a separate section of the reception office or in a
separate department, to enable employees to concentrate on the
respective tasks without conflicting demands on their time and
attention. Sometimes all advance reservations are concentrated
in the sales department, which has a responsibility for
maximizing hotel occupancy.
In smaller hotels guest accounts are normally handled
by book-keeper/receptionists, but strictly speaking guest
accounts represent an extension of the accounting function of
the hotel. Therefore, where guest accounting is handled by bill

116
office clerks and cashiers, they normally form a part of the
accounts department.
• In some hotels room service is provided by housekeeping
staff, but room service is clearly part of the food and beverage
function of the hotel.
Food and Beverage

Several typical organizational approaches identified in

respect of this function in practice:
● may be each sales outlet and supporting service operates as a
separate department with its own head of department;
• several departments are grouped together under an assistant
manager for whom they represent the sole or main
responsibility, e.g. purchasing and storage, bars and cellars, the
‘back-of-the-house’ activities including the kitchen, and so on;
• several of these departments are grouped together as one
department under its own head of department;

117
• all food and beverage activities are grouped together under an
assistant manager for whom they represent the sole or main
responsibility; • all food and beverage activities are grouped
together as a food and beverage department with its own head
of department.
The same observations apply to these approaches as are
made above in relation to rooms, regarding lines of
responsibility and authority, span of control and levels of
management; the size of the span of control and the number of
management levels are conflicting considerations.
Several aspects of the food and beverage function are
closely related to each other but also to other parts of the hotel
operation:
• Most hotels have facilities serving both food and beverages,
although in some of them food or beverages may predominate.
Whilst it is usually relatively easy to separate the revenue from
each, it is often impractical to separate accurately all the costs
of operation other than the cost of sales, because the same
employees may handle both products, and because other goods
and services provided in the same outlet may not be readily
identifiable as either food or beverages. In these circumstances
food and beverages are treated together, analysed by sales
outlet, and the related responsibilities are reflected in the
organization structure.
• Food and beverage control based on the food and beverage
cycles may be appropriately seen as part of the total accounting
function of the hotel. In these circumstances such employees as
restaurant cashiers and cost control clerks are included on the
staff of the hotel accountant. • ‘Where there is a separate sales
department, food and beverage sales are usually closely

118
monitored by that department, and such arrangements as
reservations for functions may form part of the responsibilities
of the sales department.

Miscellaneous Guest Services

Miscellaneous guest services are illustrated in terms of

such activities as telephones and laundry and the typical
organizational approaches for most of term are shown to be of
two main kinds:
• the services are operated under direct management of the
hotel as minor operated departments;
• the services are operated under rental and concession
arrangements with the hotel by another firm.
The alternative arrangements may apply in the provision
of the following main services to guests:

beauty shop and secretarial services

hairdressing
florist squash courts and
tennis courts
garage gifts and souvenirs
laundry and dry cleaning swimming pool
newspapers and magazines tobacconist

Direct management of these services normally provides

for a closer direct control and supervision by the hotel and for
greater flexibility in operation. In many hotels the services are
merely grouped as residuary hotel activities for accounting and
control purposes and are in practice provided as part of the

119
services of other hotel departments, e.g. reception, uniformed
services, housekeeping or general administration, and are not
separate departments in the organizational sense. Only when
the volume of a particular service is sufficiently large, it may be
organized as a separate department. And it is only then that the
option arises for the service to be provided for the guests by
another operator, because it warrants his involvement, under a
rental or concession arrangement. Such arrangement then
relieves the hotel from operating what is often to the hotel
operator an unfamiliar service and allows it to concentrate on
its primary activities.
Therefore, major deciding factors are the size of the
operation, the availability of suitable operators of particular
services, and the operational philosophies of the hotel or hotel
group, as well as the quality of service and the financial return
to the hotel, which may result from one or the other approach.

Hotel Support Services

In practice the non-revenue service activities are

organized in one of three main ways:
• retained among the hotel manager’s own responsibilities;
• assigned to an assistant manager as one of his or her
responsibilities;
• assigned to a separate department with its own head of
department.
To a greater or lesser extent each of these activities may
also draw for its performance on external specialist advice and
assistance.

120
The main specialist activities, which may be organized in one
of these ways, and examples of the external sources of advice
and assistance available to the hotel in respect of each, can be
summarized as follows:

Accounting and finance Hotel accountants and

Personnel services
Purchasing
Sales and marketing
Property operation,
maintenance, energy
consultants
Public accountants and
auditors
Professional stock-takers
Personnel recruitment and
selection specialists
Work study, personnel and
industrial relations advisers
Training boards and other
agencies
Hotel accountants and
consultants
Furniture and equipment
specialists
Various suppliers
Market research agencies
Advertising agencies
Public relations consultants
Architects, builders,
designers
Consulting engineers
Utility undertakings

121
 Advisory services are also sometimes provided by
professional bodies, trade associations for their members, the
technical press and other agencies.
Apart from any operational philosophies, the adoption
of the organizational approaches, in respect of a particular
activity, is largely determined by the size of operation: the first
is normally associated with a small hotel; the second with
medium size; and the third with large operations, but no hard
and fast rules apply. Each of these activities comprises
specialist knowledge and skills, as distinct from normal
operational know-how inherent in the primary operating
activities.

The Management Structure

Following the discussion of the division and grouping

of operated and service activities into departments, it is next
necessary to consider the total management structure of the
hotel; this comprises all positions of responsibility and
authority below top management, which is represented in a
hotel company by the board of directors. The management team
consists of the hotel manager, one or more deputy or assistant
managers, and the heads of departments. A discussion of the
management structure is concerned with these posts and with
the relationships between them.
According to the size of the hotel and the particular
arrangement in operation, the hotel chief executive may be
variously designated as managing director, general manager or
simply hotel manager. He or she may to agreater or lesser
extent participate in the formulation of the hotel policies and

122
strategies, and will invariably be responsible for their
implementation and for the hotel performance. In larger hotels
this level may be subdivided betweena managing director or
general manager and the hotel manager or a resident manager.
The former then reports to the board and normally coordinates
the work of the specialist departments and of the hotel or
resident manager, who is in turn responsible for the day-to-day
management of the hotel activities.
The complexity and continuity of the hotel activities
normally give rise to the need for one or more deputy or
assistant managers. A deputy hotel manager normally has
authority over the heads of departments. But there is much
variation in the role, authority and responsibilities of hotel
assistant managers.
In some instances they are the hotel manager’s deputies
in all but name, in respect of the whole operation or some parts
of it, e.g. food and beverages, front hall, ‘back of the house’,
and so on; in other cases they have these specific
responsibilities in addition to their general role as the
manager’s deputies. But many so-called assistant managers
perform roles, which are more appropriately described as those
of general assistants (assisting where required throughout the
hotel) or of personal assistants to the manager (acting on his
behalf as he directs them to do). Yet in other cases their main
role is guest contact.
All the roles described above may be appropriate in particular
circumstances, but effective hotel management calls for a clear
definition of responsibility and authority. The relationships
with heads of departments are especially important in this

123
context. Titles, which describe the particular roles, can be
helpful in this direction.
In order to provide clear-cut lines of responsibility and
authority and an effective coordination of related activities,
some hotels function without assistant managers as such: those
who would normally be in such positions are allocated specific
responsibilities and appropriate titles to describe them.
Those in positions of heads of departments fall into two
distinct categories. Heads of operated departments are known
as line managers, with direct lines of responsibility and
authority to their superiors and to their subordinates in respect
of each operated department. Heads of service departments are
specialists who provide advice and service to line management,
and relieve them of such specialist tasks as are considered to be
more effectively discharged through the appointment of
specialists; they have no direct authority over employees other
than those of their own departments. Line management
includes, for example, head receptionists, head housekeepers,
head chefs and restaurant managers. Specialists include
accountants, buyers, personnel and purchasing officers and
similar posts. In order to draw a distinction between the two, it
is helpful to confine the designation ‘manager’ to operated
departments.
It is also relevant to refer in this context to a confusion,
which often arises with various trainee positions. It is difficult
to justilt such titles as ‘trainee manager’ unless its holder has
been designated to fill a specific post, for which he is training.
A person who is undergoing training with a view to an ultimate
unspecified position of responsibility is more appropriately
described as a management trainee.

124
 IVHotel Services

Rooms and Beds

The primary function of a hotel is to accommodate

those away from home and sleeping accommodation is the most
distinctive hotel product. In most hotels room sales are the
largest single source of hotel revenue and in many, more sales
are generated by rooms than by all the other services combined.
Room sales are invariably also the most profitable source of
hotel revenue, which yield the highest profit margins and
contribute the main share of the hotel operating profit.
Hotels contributing to annual reports of Horwath
International earned on average the proportions of their total
revenue shown in the following from room sales in the early
1990s.

Room Sales as a Ratio of Hotel Revenue in Main Regions

1990 1991 1992
(%) (%) (%)
Africa and the Middle East 46.0 43.6 45.2
Asia mid Australia 54.1 56.0 57.9
Europe 49.2 49.1 47.0
North America 63.9 62.9 71.6

125
Latin ArnericalCaribbean 53.8 58.5 56.

Three main hotel activities are earning the room

revenue: hotel reception, uniformed services and Room Sales
A large proportion of hotel guests reserve their rooms
from a few hours to several weeks or months before they
actually arrive at the hotel. They do so in person, by telephone,
telegram, Telex or Fax, by mail, through travel agents, and in a
growing number of cases through central reservations systems.
Hotel reservations create a multitude of contractual
relationships between the hotel and its guests, which begin at
the time each reservation is made and continue until the
departure of the guests or until their accounts are settled after
their stay. Advance reservations are an important responsibility
on the part of the hotel, both in the legal and in the business
sense, and call for a system which enables room reservations to
be converted into room revenue. When guests arrive in hotels,
they are asked to register by providing the receptionist with
certain particulars about themselves. The hotel register, in
which the particulars are entered, has two main functions; one
is to satisfy the law, which makes hotel registration of guests a
legal requirement in most countries. The second function is to
provide an internal record of guests, from which data are
obtained for other hotel records.
In most hotels room allocations of accommodation
reserved in advance are made before the guests’ arrival and
only guests registering without a previous reservation are
allocated rooms on arrival, but in some hotels all room
allocations are made only when guests arrive. The registration
and room allocation are then the starting point for guests’ stay

126
and a signal for the opening of their accounts, as well as for
notifying uniformed staff, the housekeeping department,
telephonists, and others, of arrivals.
Several main records document the room sale in the reception
office:
• reservation form or card standardizes the details of each
booking, forms the top sheet of any documents relating to it,
and enables a speedy reference to any individual case;
• reservation diamy or daily arrival list records all bookings by
date of arrival and shows all arrivals for a particular day at a
glance;
• reservation chart provides a visual record of all reservations
for a period and shows at a glance rooms reserved and those
remaining to he sold;
• hotel register records all arrivals as they occur and gives
details of all current and past guests;
• reception or room status board shows all rooms by room
number and floor and gives the current and projected status of
all rooms on a particular day, with details of occupation;
• guest index lists all current guests in alphabetical order with
their room numbers and provides an additional quick point of
reference in larger hotels.

Mall and Other Guest Services

A combined key and mail rack is a standard feature of

most hotel reception offices and reflects two typical
responsibilities of the office room keys and guest mail,
Arranged by room number and floor, it corresponds in layout to
the reception or room status board and is complementary to it.

127
 In the course of a day’s business room keys arc issued
from the rack to arriving guests and to residents who call for
them; keys are returned to the rack by guests going out of the
hotel or departing at the end of their stay. The rack is a point of
reference regarding the occupation of rooms and the
whereabouts of guests.
Mail may arrive for guests before, during and after their stay at
the hotel, and may consist ç.f ordinary or registered mail,
packets and parcels, cables and’ telegrams, Telex messages,
Fax transmissions, express mail and personal messages left for
guests. Mail awaiting guests’ arrival should be handed to them
when they are registering; mail arriving after a guest has left the
hotel, should be forwarded. During the guest’s stay speed is the
essence of Fax transmissions, security is the essence of
registered mail, bulkiness is the essence of parcels; each calls
for standard procedures of their own. But the key and mail rack
is the focus; it accommodates much of the mail the guest
collects when collecting the room key; it can serve to alert the
receptionist to items such as parcels or registered mail, stored
elsewhere.
Three basic aids are, therefore, related and
complementary in the provision of key, mail and other guest
services:
• guest index shows whether a particular person is resident and
that person’s room number;
• reception or room status board shows who is occupying a
particular room;
• key and mail rack indicates whether the guest is in the hotel
and whether there is any mail for that person.

128
In many hotels the reception office or a separate section of it
also acts as a source of information to guests
— about hotel facilities and services, about the locality, about
transport and other matters. In other hotels the keys, mail and
information to guests are provided by uniformed staff, and
there are usually good reasons for one or the other arrangement.
But who does what and to whom the guest can turn, should be
made clear to the guest in terms of individual needs and
requirements rather than in terms of the hotel organization
structure, particularly in larger hotels. Such notices as
‘Reception’ and ‘Hall Porter’have different connotations in
different hotels and are not necessarily self-explanatory even
for experienced hotel users. Counters and sections of the front
hall of the hotel clearly labelled ‘Registration’, ‘Keys’, ‘Mail’,
‘information’, ‘Guest Accounts’, and so on, are more
meaningful to guests.

Uniformed Services

The second component of the accommodation function

is uniformed services, which form an integral part of the front
hail ftmnctions of the hotel and provide a variety of personal
services to guests.
Servicing arrivals and departures are the most common
uniformed services. The meeting and greeting of arriving
guests, their luggage and the parking of their ears, are the first
responsibilities, which extend from the hotel entrance and car
park to the hotel bedrooms. On departure, guests, luggage and
transportation are again their primary responsibilities. In an
hotel with a hundred departing guests in the morning, followed

129
by a similar volume of arrivals in the afternoon and evening,
uniformed staff attend in a day’s business to some two hundred
people, handle several hundred pieces of luggage, park several
doPzen cars, and arrange several dozen taxis. The guests, their
luggage, and their vehicles, therefore, play a major part in the
provision of uniformed services.
During the guest’s stay uniformed staff are often the
main source of informatinn about the hotel and the locality, and
the guest’s main source of such arrangements as theatre tickets,
tours, car hire and other services. The hail porter’s desk or an
enquiry counter in the front hail are then the information
centres of hotels, which contribute much to the range of guest
services and to their integration.
In some hotels other guest services may be provided by
uniformed staff. Newspapers, as well as other small articles,
may be supplied to guests by uniformed staff who may also act
as messengers, lift operators and men’s cloakroom attendants.
In many hotels uniformed staff are the only people on duty
during the night and particularly in smaller hotels maintain a
whole range of hotel services provided by other departments in
day time: to receive and register late arrivals, to serve light
refreshments, to operate the hotel switchboard, to arrange early
morning calls, as well as to clean public rooms and to ensure
the security of the hotel.
The provision of uniformed services varies greatly
between hotels of different sizes, types and standards, and their
organization tends to be influenced by all these factors, as well
as by established practices, As mentioned earlier, information
to guests may he provided by the reception office or as part of
uniformed services or by both. The cleanliness of public rooms

130
may be the responsibility of uniformed staff, the housekeeping
department, or outside contractors. What hotel services are
available during the night and by whom they are provided, is
another source of variation. These differences are legitimate, as
long as they reflect the particular requirements of guests and
the particular circumstances of each hotel, and as long as the
respective functions are defined and understood by staff and
made clear to guests where they affect them.

Hotel Housekeeping

The basic housekeeping function of the hotel is the

servicing of guest rooms. In its scope, guest bedrooms may be
the sole or main responsibility of the hotel housekeeping
department, but it may extend to other areas of the hotel.
Normally hotel guests spend at least one-third of their
stay in their room. The design, layout, decor, furniture and
furnishings of the hotel bedroom are fundamental to meeting
their needs and in creating customer satisfaction, and these may
be significantly influenced by the housekeeping department.
The cleanliness and good order, the linen and other room
supplies, and the smooth functioning of the room are the focus
of the department. This may include other guest services, such
as early morning teas, guest laundry, baby sitting and other
personal services. The main housekeeping records are made up
of arrival and departure lists and notifications received from the
reception office and the housekeeping own room status report,
together with separate records in respect of additional services
provided by the department.

131
 The extension of the housekeeping function outside the
hotel bedroom normally includes the cleaning of bedroom
floors and may include staircases, public cloakrooms and other
public areas of the hotel. However, it is quite common for such
public rooms as hotel lounges to be cleaned by uniformed staff,
for the responsibility for the men’s and women’s cloakrooms to
be divided between uniformed staff and the housekeeping
department, and for restaurants and bars to be cleaned by the
staff of those departments. More recently, hotels have been
engaging outside contract firms for the cleaning of public
rooms.
Other housekeeping services often include the provision
of first aid to guests and staff, dealing with lost property, and
floral arrangements throughout the hotel. When staff
accommodation is provided by the hotel, it may be included as
part of the head housekeeper’s responsibilities. Although in
many countries hotels increasingly use outside laundries and
dry cleaning firms for their requirements, many hotels operate
their own dry cleaning and laundry facilities. These ‘in-house’
facilities may be then organized as separate departments of the
hotel or as sections of the housekeeping department.
This outline of the hotel housekeeping function
illustrates three organizational approaches. One seeks to
integrate a number of related functions within a major
housekeeping department. The second assigns certain functions
to the housekeeping department and others to other departments
of the hotel, largely on the basis of physical areas. The third
consists of ‘buying in’ certain services from outside suppliers
rather than operating them directly as hotel facilities. Food and
Drink

132
The food and drink service is the second major activity of most
hotels and in many of them it accounts for a larger proportion
of employees than the provision of sleeping accommodation
and related services. This is due to two main factors:
• in contrast to hotel rooms, meals and refreshments in hotels
may be supplied to non-residents as well as to resident guests
and include substantial functions sales;
• the provision of meals and refreshments is relatively labour
intensive.
The provision of sleeping accommodation is a service
activity, in which there is a negligible use of materials, and
there is no cost of sales. The provision of meals and
refreshments results in composite products made up of
commodities and of service, and the use of materials represent
the cost of sales. Food and drink enter into meals and
refreshments served in hotels in several stages from their
purchase by the hotel to their sale in the same or altered form to
the hotel customer. According to the size and diversity of the
hotel markets there may be more than one restaurant and bar
and also food and drink service in rooms and through functions.

133
 Restaurants

Restaurants establishment where refreshments or meals

may be procured by the public. The public dining room that
came ultimately to be known as the restaurant originated in
France, and the French have continued to make major
contributions to the restaurant’s development.
The first restaurant proprietor is believed to have been
one A. Boulanger, a soup vendor, who opened his business in
Paris in 1765. The sign above his door advertised restoratives,
or restaurants, referring to the soups and broths available
within. The institution took its name from that sign, and
“restaurant” now denotes a public eating place in English,
French, Dutch, Danish, Norwegian, Romanian, and many other
languages, with some variations. For example, in Spanish and
Portuguese the word becomes restaurante, in Italian it is
ristorante; in Swedish, restaurang; in Russian, restoran; and in

134
Polish, restauracia. Although inns and hostelries often served
paying guests meals from the host’s table, or table d’hôte, and
beverages were sold in cafés, Boulanger’s restaurant was
probably the first public place where any diner might order a
meal from a menu offering a choice of dishes.
Boulanger operated a modest establishment; it was not
until 1782 that La Grande Taverne de Londres, the first luxury
restaurant, was founded in Paris. The owner, Antoine
Beauvilliers, a leading culinary writer and gastronomic
authority, later wrote L ‘Art du cuisinier (1814), a cookbook
that became a standard work on French culinary art.
The most illustrious of all 19th-century Paris restaurants
was the Café Anglais, on the Boulevard des Italiens at the
corner of the rue Marivaux, where the chef, Adoiphe Dugléré,
created classic dishes such as sole Dugléré (filets poached with
tomatoes and served with a cream sauce having a fish stock
base) and the famous sorrel soup potage Germiny. On June 7,
1867, the Café Anglais served the now-famous “Three
Emperors Dinner” for three royal guests visiting Paris to attend
the Universal Exposition. The diners included Tsar Alexander
11 of Russia; his son the tsarevich (later the tsar Alexander III);
and King William I of Prussia, later the first emperor of
Germany. The meal included souffles with creamed chicken (a
Ia reine), fillets of sole, escalloped turbot, chicken a la
portugaise (cooked with tomatoes, onions, and garlic), lobster a
la parisienne (round, flat medallions glazed with a gelatin-
mayonnaise mixture and elaborately decorated), ducklings a Ia
rouennaise (the carcasses stuffed with liver and pressed,
presented on a platter with boned slices of the breast and the
grilled legs, and served with a red wine sauce containing pureed

135
liver), ortolans (small game birds) ontoast, and eight different
wines.
Toward the end of the 19th century, in the gaudy and
extravagant era known as ia belie époque, the luxurious
Maxim’s, on the rue Royale, became the social and culinary
centre of Paris. The restaurant temporarily declined after World
War I but recovered under new management, to become an
outstanding gastronomic shrine.
France produced many of the world’s finest chefs,
including Georges-Auguste Escoffier, who organized the
kitchens for the luxury hotels owned by César Ritz, developing
the so-called brigade de cuisine, or kitchen team, consisting of
highly trained experts each with clearly defined duties. These
teams included a chef, or gros bonnet, in charge of the kitchen;
a sauce chef, or deputy; an entremettier, in charge of
preparation of soups, vegetables, and sweet courses; a rótisseur
to prepare roasts and fried or grilled meats; and the garde
manger, in charge of all supplies and cold dishes. In Escoffier’s
time, the duties and responsibilities of each functionary were
sharply defined, but in modern times, rising labour costs and
the need for faster service have broken down such rigidly
defined duties. In the kitchens of even the leading modern
restaurants, duties at the peak of the dinner-hour preparations
are likely to overlap widely, with efficiency maintained amid
seeming chaos and confusion.
I n the 20th century, with the development of the
automobile, country dining became popular in France, and a
number of fine provincial restaurants were established. The
Restaurant de la Pyramide, in Vienne, regarded by many as the
world’s finest restaurant, wasfounded by Fernand Point and

136
after his death, in 1955, retained its high standing under the
direction of his widow, Madame “Mado” Point. Other leading
French provincial restaurants have included the Troisgros in
Roanne; the Paul Bocuse Restaurant near Lyon; the Auberge de
1’Ill in Illhaeusern, Alsace; and the hotel Côte d’Or, at Saulieu.
French restaurants today are usually in one of three
categories: the bistro, or brasserie, a simple, informal, and
inexpensive establishment; the medium-priced restaurant; and
the more elegant grand restaurant, where the most intricate
dishes are executed and served in luxurious surroundings.
Other nations have also made many significant
contributions to the development of the restaurant.
In Italy the botteghe (coffee shop) of Venice originated
in the 16th century, at first serving coffee only, later adding
snacks. The modern trattorie, or taverns, feature local
specialities. The osterie, or hostelries, are informal restaurants
offering home-style cooking. In Florence small restaurants
below street level, known as the buca, serve whatever foods the
host may choose to cook on a particular day.
Austrian coffeehouses offer leisurely, complete meals,
and the diner may linger to sip coffee, read a newspaper, or
even to write an article. Many Austrians frequent their own
“steady restaurants,” known as Stain,nbe
In Hungary the csárda, a country highway restaurant,
offers menus usually limited to meat courses and fish stews.
The beer halls of the Czech Republic, especially in
Prague, are similar to coffeehouses elsewhere. Food is served,
with beer replacing coffee.
The German Weinstube is an informal restaurant
featuring a large wine selection, and the Weinhaus, a food and

137
wine shop where customers may also dine, offers a selection of
foods ranging from delicatessen fare to full restaurant menus.
The Schenke is an estate-tavern or cottage pub serving wine
and food. In the cities a similar establishment is called the
Stadischenke.
In Spain the bars and cafés of Madrid offer widely
varied appetizers, called tapas, including such items as shrimp
cooked in olive oil with garlic, meatballs with gravy and peas,
salt cod, eels, squid, mushrooms, and tuna fish. The tapas are
taken with sherry, and it is a popular custom to go on a chateo,
or tour of bars, consuming large quantities of tapas and sheny at
each bar. Spain also features the marisco bar, or marEs querIa,
a seafood bar; the asadoro, a Catalan rotisserie; and the tasca, or
pub-wineshop.
In Portugal, cervejarias are popular beer parlours also
offering shellfish. Fado taverns serve grilled sausages and wine,
accompanied by the plaintive Portuguese songs called fados
(meaning “fate”).
In Scandinavia sandwich shops offer open-faced, artfully
garnished sandwiches called smorrebrod. Swedish restaurants
feature the smorgasbord, which literally means “bread and
butter table” but actually is a lavish, beautifully arranged feast
of herring, shrimp, pickles, meatballs, fish, salads, cold cuts,
and hot dishes, served with aquavit or beer.
The Netherlands has broodjeswinkels, serving sandwich
open-faced shops, called sandwiches, seafoods, hot and cold
dishes, and cheeses from a huge table.
English city and country pubs have three kinds of bars:
the public bar, the saloon, and the private bar. Everyone is
welcome in the public bar or saloon, but the private bar is

138
restricted to habituës of the pub. Pub food varies widely
through England, ranging from sandwiches and soups to pork
pies, veal and ham pies, steak and kidney pies, bangers
(sausages) and a pint (beer), bangers and mash (potatoes), toad
in the hole (sausage in a Yorkshire pudding crust), and Cornish
pasties, or pies filled with meat and vegetables.
In the tavérnas of Greece, customers are served such
beverages as retsina, a resinated wine, and ouzo, an anise-
flavoured aperitif, while they listen to the music of the
bou:ouki. Like other Mediterranean countries, Greece has the
groceiy-tavérna where one can buy food or eat.
The Turkish iskembeci is a restaurant featuring tripe soup and
other tripe dishes; muhalleb icE shops serve boiled chicken and
rice in a soup and milk pudding.
Characteristic of Japan are sushi bars that serve sashimi (raw
fish slices) and sushi (fish or other ingredients with vinegared
rice) at a counter. Other food bars serve such dishes as noodles
and tempura (deep- fried shrimp and vegetables). Yudofu
restaurants build their meals around varieties of tofu (bean
curd), and the elegant tea houses serve formal Kaiseki table
d’hôte meals.
In China, restaurants serving the local cuisine are found,
and noodle shops offer a wide variety of noodles and soups.
The dim-sum shops provide a never-ending supply of assorted
steamed, stuffed dumplings and othersteamed or fried
delicacies.
A common sight in most parts of Asia is a kind of
portable restaurant, operated by a single person or family from
a wagon or litter set up at a particular street location, where

139
specialties are cooked on the spot. Food and cooking utensils
vary widely in Asia.
The cafeteria, an American contribution to the
restauranfs development, originated in San Francisco during the
1849 gold rush. Featuring self-service, it offers a wide variety
of foods displayed on counters. The customer makes his
selections, paying for each item as he chooses it or paying for
the entire meal at the end of the line. Other types of quick-
eating places originating in the United States are the drugstore
counter, serving sandwiches or other snacks; the lunch counter,
where the diner is served a limited quick-order menu at the
counter; and the drive-in, “drive-thru,” or drive-up restaurant,
where patrons are served in their automobiles. So-called fast-
food restaurants, usually operated in chains or as franchises and
heavily advertised, offer limited menus-- typically comprising
hamburgers, hot dogs, fried chicken, or pizza and their
complements--and also offer speed, convenience, and
familiarity to diners who may eat in the restaurant or take their
food home. Among fast-food names that have become widely
known are White Castle (one of the first, originating in
Wichita, Kan., in 1921), McDonald’s (which grew from one
establishment in Des Flames, Ill., in 1955 to more than 15,000
internationally within 40 years), Kentucky Fried Chicken
(founded in 1956), and Pizza Hut (1958). Many school, work,
and institutional facilities provide space for coin-operated
vending machines that offer snacks and beverages. The
specialty restaurant, serving one or two special kinds of food,
such as seafood or steak, is another distinctive American
establishment.

140
 The Pullman car diner, serving full-course meals to long
distance railroad passengers, and the riverboat steamers,
renowned as floating gourmet palaces, were original American
conceptions. They belong to an earlier age, when dining out
was a principal social diversion, and restaurants tended to
become increasingly lavish in food preparation, decor, and
service. In many modern restaurants, customers now prefer
informal but pleasant atmosphere and fast service. The number
of dishes available, and the elaborateness of their preparation,
has been increasingly curtailed as labour costs have risen and
the availability of skilled labour decreased. The trend is toward
such efficient operations as fast-food restaurants, snack bars,
and coffee shops. The trend in elegant and expensive
restaurants is toward smaller rooms and intimate atmosphere,
with authentic, highly specialized and limited menus.

Miscelaneous Guest Services

Accommodation, food and drink services are the major

activities of hotels, which generate all or most hotel revenue,
account for all or most of their employees, and represent the
principal products provided by the major hotel departments.
But the present-day hotel guest normally also expects
other facilities and services. In addition to a comfortable room,
and meals and refreshments in a restaurant or bar or in the
room, a guest may want to use the telephone or have clothes
laundered or dry cleaned. In a large modern hotel a guest may
anticipate to be able to buynewspapers, magazines and
souvenirs, have a haircut, obtain theatre tickets, and book an
airline ticket for the next stage of a trip.

141
 The hotel services other than accommodation, food and
drink may be provided to the guest by the hotel or by other
operators on the hotel premises. The revenue- earning activities
provided directly by the hotel are variously described as
ancillary or subsidiary revenue- earning, and are grouped for
accounting and control purposes in what are known as minor
operated departments, to distinguish them from major operated
departments concerned with rooms, food and beverages. Both
are distinguished from rental and concession arrangements,
under which some of these and other services may be provided
to guests by outside firms operating in the hotel.
The three basic components of the accommodation
function are present in most hotels and are normally organized
in separate departments. But their organization and staffmg
often differ in hotels of different sizes, types and standards. In
smaller hotels only a few people may be engaged in each and
cover a wide range of duties; as the hotel increases in size, each
activity may be subdivided into separate departments or
sections, in which those engaged in them perform more
specialized tasks.
A transit city hotel with a short average length of stay
calls for a somewhat different approach from that of a resort
hotel, which accommodates guests for longer and often such
regular periods as one or two weeks. There is also a
relationship between prices, the range and quality of facilities
and services provided, and the way they are organized. For all
these and other reasons it is possible to describe the hotel
activities related to the accommodation of guests only in broad
and general terms.

142
 V. Tourist Attractions

Tourist attractions have an important role to play in

world tourism since they often provide the motivating force for
travel, thereby energising the many components of the tourist
industry. The scope of the attractions sector is immense;
logically anything that has the power to draw visitors to it can
be considered an attraction. Moreover an attraction may not be
a readily identifiable place or feature, but a visitor’s overall
perception of a destination as an attractive place to visit,
distilled from a variety of surces and images. London’s current
popularity as a tourist destination with young visitors from
around the world is a good case; they are not attracted primarily
by the traditional Big Ben, Buckingham Palace, Houses of
Parliament but rather by the image of the capital as a “cool”
place to hear good music and have an enjoyable time.
Touristic attractions occur at a variety of scales. Many
internationally famous attractions such as:
San Francisco’s Golden Gate Bridge
Red Square in Moscow
The Ponipidou Centre in Paris are household names on many
tourists’ “must see” lists.
Domestic tourists travel within their own countries to a
variety of attractions, some of which are provided free of
charge while others charge admission. These may be day visits
or a part of a long holiday or short break.
Tourist attraction are provided by both commercial and
non-commercial organizations. Many historic buildings, areas
of landscape or wildlife interest, museums and ancient
monuments are in the care of public bodies and voluntary

143
groups which aim to preserve or conserve vital parts of a
country’s heritage while at the same time making facilities
available to tourists.

Types of tourist attractions

Tourist attractions are generally classified into one of

two categories:
Natural attractions
Man made attractions such as:
Heritage attractions (e.g. Williamsburg)
Museums and ancient monuments (‘e.g Louvre in Paris)
Theme parks (e.g. Walt Disney World in Florida)
Entertainments (e.g The Sydney Opera House)
Sport facilities (e.g Winter Olimpic Gaines)
Leisure shopping venues (‘e.gThe Metro Center in Englanc
Wildlife areas (e.g Busch Garden in Florida)

Tourism today

The mass tourism that exists in the world today is a

phenomenon of the post-industrial society of the latter half of
the twentieth century. Tourism has become an integral part of
the move away from economies based on heavy engineering
and manufacturing to a rapidly expanding service sector. The
growth in international and domestic tourism since the 1950s
has been nothing short of dramatic, with international tourist
arrivals climbingfrom 25 million in 1950 to a record 592

144
million in 1996 (World Tourism Organisation, 1997). When we
add to this the fact that the volume of domestic tourism
worldwide is estimated by the World Tourism Organisation to
be approximately ten times greater than that of international
tourism (World Tourism Organisation. 1983), the scale of the
tourism phenomenon can begin to be appreciated. Greater
wealth, higher educational standards, increased mobility and
more leisure time have all contributed to unparalleled demand
for holidays and excursions at home and abroad. Overseas
travel is no longer the preserve of the privileged few, but is
available to the majority, as developments in transportation,
increased competition and global communications technology
have reduced the real cost of holidays. Private and public sector
organisations have responded to the increased demand by
providing a wide range of facilities and products to meet the
needs of an increasingly discerning travelling public. It must be
remembered, however, that tourism is a very recent
phenotnenon that has hitherto been allowed to grow in a
business environment relatively free of regulation and trade
restrictions. Such an unrestricted environment is unlikely to
continue in years to come.
The current scale and scope of the international tourism
industry is illustrated in recent data from the World Travel and
Tourism Council (1996), which indicate that in 1996 the world
travel and tourism industry is estimated to have:
 Gmployed 255 million people
 Generated an output of US $3.6 trillion
 Contributed 10.7 per cent of global gross domestic
product (.GDP) o invested US $766 billion in capital
projects

145
  Generated( US $761 billion in world exports
 Paid US $653 billion in taxes worldwide
Such figures demonstrate the economic significance of the
tourism industry on a global scale and confirm that the age of
mass tourism has truly arrived in spectacular fashion.

Local Tours

Paris

Paris is the capital of France and one of Europe’s largest

conurbations. The city was founded more than 2,000 years ago
on an island in the Seine River, some
233 miles (375 kilometres) upstream from the river’s mouth on
the English Channel. The modern city has spread from the
island (the lie de la Cite) and far beyond both banks of the
Seine. The City of Paris itself covers an area of 41 square miles
(105 square kilometres); the Greater Paris conurbation, formed
of suburbs and other built-up areas, extends around it in all
directions to cover approximately 890 square miles. Paris
occupies a central position in the rich agricultural region known
as the Paris Basin, and it constitutes one of eight départements
of theIle-de-France administrative region. It is by far the
nation’s most important centre of commerce and culture.

NEIGHBOUR FlOODS AND SIGHTS

Paris’ many old buildings, monuments, gardens, plazas,

boulevards, and bridges compose one of the world’s grandest
cityscapes. An impressive spot from which to view the city is

146
the Chaillot Palace, which stands on a rise on the Right Bank of
the Seine to the west, where the river begins its southwestward
curve.

The Chaillot Palace.

The Chaillot Palace dates from the International

Exposition of 1937. It replaced the Trocadéro Palace, a
structure left over from the 1878 International Exposition. The
Chaillot Palace is made up of two separate pavilions, from each
of which extends a curved wing. The Musée de I’Homme, the
Naval Museum, the Museum of French Monuments, and the
Cinema Museum are located there. Under the terrace that
separates the two sections are two theatres, the National
Theatre of Chaillot and a small hall that serves as one of the
two motion- picture houses of the national film library.
The terrace, which is lined by statues, gives a splendid
view across Paris. The slope descending to the river has been
made into a terraced park, the centre of which is alive with
fountains, cascades, and pools. The Trocadéro Aquarium is in a
grotto a few steps away in the park.
From the bottom of the slope the five-arched Jena
Bridge (Pont d’Iéna) leads across the river. It was built for
Napoleon in 1813 to commemorate his victory at theBaffle of
Jena in 1806. On the Left Bank rises the Eiffel Tower, an
unclad metal truss tower designed by Gustave Eiffel. The tower
was built for the International Exposition of 1889, against the
strident opposition of national figures who thought it unsafe or
ugly or both. When the exposition concession expired in 1909,
the 984-foot (300-metre) tower was to have been demolished,

147
but its value as an antenna for radio transmission saved it.
Additions made for television transmission have added 56 feet
to the height. From the topmost of the three platforms the view
extends for more than 40 miles.

From the two-acre base of the tower the Champ-de

Mars (“Field of Mars”), an immense field, stretches to the
Military Academy (Ecole Militaire), which was built from 1769
to 1772 and is still used by the War College (Ecole Supérieure
de Guerre). The Champ-de-Mars, which originally served as
the school’s parade ground, was the scene of two vast rallies
during the French Revolution: that of the Federation (1790) and
that of the Supreme Being (1794). From 1798 there were
annual national expositions of crafts and manufactures, which
were followed by world’s fairs between 1855 and 1900. Behind
the Military Academy stands the headquarters of the United
Nations Educational, Scientific and Cultural Organization

148
(UNESCO). The building, erected in 1958, was designed by an
international trio of architects and decorated by artists of
member nations.

The Invalides.

One street to the northeast is the Hotel des Invalides,

founded by Louis XIV to shelter 7,000 aged or invalid veterans.
The enormous range of buildings was completed in five years
(1671-76). The gold-plated dome (1675-1706) that rises above
the hospital buildings belongs to the church of Saint-Louis. The
dome was designed by Jules Ilardouin-Mansart, who employed
a style known in France as “Jesuit” because it derives from the
Jesuits’ first church in Rome, built in 1568. The churches of the
French Academy (Académie Francaise), the Val-de-Grâce
Hospital, and the Sorbonne, as well as three others in Paris, all
of the 17th century, followed this style. By using the classical
elements more freely than had been done in Rome, the French
made it something recognizably Parisian.
In the chapels of Saint-Louis are the tombs of
Napoleon’s brothers Joseph and Jérôme, of his son (whose
body was returned from Vienna in 1940 by Adolf Hitler), and
of the marshals of France. Immediately beneath the cupola is a
red porphyry sarcophagus that covers the six coffins, one inside
the other, enclosing the remains of Napoleon, which were
returned from St. Helena in 1840 through the efforts of King
Louis Philippe. Napoleon’s uniforms, personal arms, and
deathbed are displayed in the Army Museum at the front of the
Invalides. A portion of the Invalides still serves as a military
hospital; facilities have been modernized since World War II.

149
 The vast, tree-lined Invalides Esplanade slopes gently to
the Quai d and the Alexandre III Bridge. The first stone for the
bridge, which commemorates the Russian tsar Alexander III,
was laid in 1897 by Alexander’s son, Tsar Nicholas II. The
bridge was finished in time for the International Exposition of
1900, and it leads to two other souvenirs of that year’s fair, the
Grand Palais and the Petit Palais. The buildings are still used
for annual shows and for major visiting art exhibits.

The Louvre.

Vikings camped on the Right Bank across from the

western tip of the lie de la Cite in their unsuccessful siege of
Paris in 885, and in about 1200 King Philip II had a square
crusader’s castle built on the same site, just outside the new city
wall, to buttress the western defenses. Over the following
centuries many additions and renovations were made, and from
the castle grew one of the world’s largest palaces, completed
only in 1852. From the original square, known as the Cour
Carrëe (“Square Court”), two galleries extend westward for
1,640 feet, one along the river, the other along the rue de
Rivoli. In 1871, only 19 years after the huge oblong was
completed, its western face, the Tuileries Palace (begun 1563),
was destroyed by the insurrectionists of the Commune.
Two of the facades of the Cour Carrée had strong
influence on French architecture. Pierre Lescot began his inner
courtyard facade in 1546, adapting the Renaissance rhythms
and orders he had observed in Italy and adding purely French
decoration to the classical motifs. The physician and architect
Claude Perrault collaborated with Louis Le Vau, architect to

150
the king, to design the outer east face of the palace in 1673. It,
too, employs classic elements, making especially graceful use
of coupled columns and a pediment.
The Louvre Museum occupies the four sides of the
palace around the Cour Carrée as well as the south gallery,
which stretches along the river. Among the treasures of the
museum are the Victory of Samothrace, the Venus de Milo, and
the Mona Lisa. The enormous collections contain works from
the 7th century BC to the mid-l9th century, with a huge cultural
and geographic spread. The north gallery, along the rue de
Rivoli, houses a separate museum, the Museum of Decorative
Arts, as well as the Ministry of Finance.
Extensive remodeling has been undertaken throughout
the Louvre to increase space for art works. Construction
began in the early 1980s to create a new main entrance and
underground reception hail in the vast Napoleon Courtyard,
between the two galleries; the 70-foot-high glass pyramid
designed by I.M. Pei to cover the entrance aroused both strong
support and spirited criticism.
The Arts Bridge (Pont des Arts), which crosses the
Seine from the Louvre to the Left Bank, is one of the most
charming of all the Parisian bridges. It was the first (1803) to be
made of iron, and it has always been reserved for pedestrians: it
provides an intimate view of riverside Paris and of the Seine
itself.

Ile de la Cite.

151
 Downstream and just below the bridge is the tip of the
Ile de la Cite, fashioned into a triangular gravel-pathed park
bordered by flowering bushes, with rustic benches under the
ancient trees. It is surrounded by a wide cobbled quay that is
especially popular with sunbathers and lovers. Where the steps
come onto the bridge from the park there is a bronze equestrian
statue of King Henry W, who insisted on completion of the
Pont-Neuf The statue is an 1818 reproduction of the 1614
original, which was the first statue to stand on a public way in
Paris. Opposite is the narrow entrance to the Place Dauphine
(1607), named for Henry’s heir, the future Louis XIII. The
place was formerly a triangle of uniform red-brick houses
pointed in white stone, but the row of houses along its base was
ripped out in 1871 to make room for construction of part of the
Palace of Justice.
The ship-shaped lie de la Cite is 10 streets long and five wide.
Eight bridges link itto the riverbanks and a ninth leads to the
scow-shaped lie Saint-Louis, which lies to the southeast.

152
 The palace of the early Roman governor (now the
Palace of Justice) was rebuilt on the same site by Louis IX (St.
Louis) in the 13th century and enlarged 100 years later by
Philip IV the Fair, who added the grim, gray turreted
Conciergerie, with its impressive Gothic chambers. The Great
Hail, which, under the kings, was the meeting place of the
Pariement (the high court of justice), was known throughout
Europe for its Gothic beauty. Fires in 1618 and 1871 destroyed
much of the original room, however, and most of the rest of the
palace was devastated by flames in 1776. The Great Hall now
serves as a waiting room for the courts, in one of which, the
adjoining first Civil Chamber, the Revolutionary Tribunal sat
from 1793, condemning 2,600 persons to the guillotine. After
sentencing, the victims were taken back down the stone stairs to
the dungeons of the Conciergerie to await the tumbrils. The
Conciergerie still stands and is open to visitors.
In the palace courtyards is found one of the great
monuments of France, the 13th-century Sainte-Chapelle
(‘Chapel”). Built at Louis IXs direction between 1243 and
1248, it is a masterpiece of Gothic Rayonnant style. With great
daring, the architect (possibly Pierre de Montreuil) poised his
vaulted ceilings on a trellis of slender columns, the walls
between being made of stained glass. The exquisite chapel was
designed to hold the Crown of Thorns, thought to be the very
one worn by Jesus at his crucifixion. Louis IX had purchased
the relic from the Venetians, who held it in pawn from
Baldwin, the Latin king of Byzantium. Other holy relics, such
as nails and pieces of wood from the True Cross, were added to
the chapel’s collection, the remnants of which are now in the
treasury of Notre-Dame.

153
 Under King Louis-Philippe (1830-48), the
“sanitization” of the island was begun, and it was continued for
his successor, Napoleon III, by Baron Georges Haussmann. The
project involved a mass clearing of antiquated structures,
widening of streets and squares, and the erection of massive
new government offices, including parts of the Palace of
Justice. The portion of the palace that borders the Quai des
Orfêvres- formerly the goldsmiths’ and silversmiths’ quay—
became the headquarters of the Paris municipal detective force,
the Police Judiciaire (“Judicial Police”), which keeps a small
museum on the fourth floor.
Across the boulevard du Palais is the Police Prefecture,
another 19th-century structure. On the far side of the prefecture
is the Place du Parvis-Notre-Dame, an open space enlarged six
times by Haussmann, who also moved the Hôtel-Dieu, the first
hospital in Paris, from the riverside to the inland side of the
square. Its present buildings date from 1868.

Notre-Dame de Paris.

154
 At the east end of the square is the cathedral of Notre
Dame de Paris, which is situated on a spot that Parisians have
always reserved to the practice of religious rites. The Gallo-
Roman boatmen of the cite erected their altar to Jupiter there (it
is now in the Cluny Museum), and, when Christianity was
established, a church was built on the temple site. The first
bishop of Paris, St. Denis, became its patron saint. The red in
the colours of Paris represents the blood of this martyr who, in
popular legend, after decapitation, picked up his head and
walked.
When Maurice de Sully became bishop in 1159 he
decided to replace the decrepit cathedral of Saint-Etienne and
the 6th-century Notre-Dame with a church in the new Gothic
style. The style was conceived in France, and a new structural

155
development, the flying buttress, which added to the beauty of
the exterior and permitted interior columns to soar to new
heights, was introduced in the building of Noire-Dame.
Construction began in 1163 and continued until 1345.
After being damaged during the French Revolution, the
church was sold at auction to a building-materials merchant.
Napoleon came to power in time to annul the sale, and he
ordered that the edifice be redecorated for his coronation as
emperor in 1804. Louis-Philippe later initiated restoration of
the neglected church. The architect Eugene Viollet-le-Duc
worked from 1845 to 1864 to restore the monument. Like all
cathedrals in France, Notre-Dame is the property of the state,
although its operation as a religious institution is left entirely to
the Roman Catholic Church.
A few 16th- and 17th-century buildings survive north of
the cathedral. They are what remain of the Cloister of the
Cathedral Chapter, whose school was famous long before the
new cathedral was built. Early in the 12th century, one of its
theologians, Peter Abelard, left the cloister with his disciples,
crossed to the Left Bank, and set up an independent school in
the open air in the Convent of the Paraclete near the present
Place Maubert. After a prolonged struggle with the monks of
Saint-Denis the followers of Abelard in 1200 won the right,
from both the king and the pope, to form and govern their own
community. This was the beginning of the University of Paris.

Rue de Rivoli.

The Louvre and the Tuileries Gardens take up the south

side of this street, and on the other side runs an arcade more

156
than a mile long. Opposite the middle of the Louvre, the Place
du Palais-Royal leads to the palace of Cardinal de Richelieu,
which he willed to the royal family. Louis XIV lived there as a
child, and during the minority of Louis XV the kingdom was
ruled from there by the debauched but gifted regent Philippe II,
duc d’Orléans from 1715 to 1723. Late in the 18th century
Louis-Philippe d’Orléans, who was popularly renamed
Philippe-Egalité during the Revolution for his radical opinions,
undertook extensive building around the palace garden. It was a
commercial operation, and the Prince hoped to pay his debts
from the property rents. Around the garden he built a beautiful
oblong of colonnaded galleries and at each end of the gallery
farthest from his residence a theatre. The larger playhouse has
been the home of the Comédie-Française, the state theatre
company, since Napoleon’s reign. The princely apartments now
shelter high state bodies such as the Council of State.
Just behind the courtyard is the Bibliothêque Nationale
(National Library), the national library of deposit, with an
enormous collection of books and prints. Haussrnann greatly
enlarged the Place du Palais-Royal in 1852, and he was careful
to preserve the palace when he laid out the avenue de l’Opéra.
At the top of the avenue, where the Grands Boulevards crossed
an enormous new place, the new opera house was built from
1825 to 1898. The Paris Opera House, a splendid monument to
the Second Empire, was designed in the neo-Baroque style by
Charles Gamier. It is known especially for its decorative
embellishments, chief among them the Grand Staircase. Just
behind the Opera House are various large department stores.

157
 The next place along the rue de Rivoli is the Place des
Pyramides. The gilded equestrian statue of Joan of Arc stands
not far from where she was wounded at the Saint Honoré Gate
(Porte Saint-Honoré) in her unsuccessful attack on Paris (at that
time held by the English), on Sept. 8, 1429.
Farther along toward the Place de la Concorde the rue
de Castiglione leads to the Place Vendôme, an elegant
octagonal place, little changed from the 1698 designs of Jules
Hardouin-Mansart. In the centre, the Vendôme Column bears a
statue of Napoleon. It was pulled down during the Commune
and put back up under the Third Republic (187 1-1940). The
place and the rue de la Paix have lost none of their discreet
distinction, nor have their shops.

The “Triumphal Way.”

From the Arc de Triomphe du Carrousel, in the

courtyard between the open arms of the Louvre, extends one of

158
the most remarkable perspectives to be seen in any modern city.
It is sometimes called la Voie Triomphale ( Triumphal
Way!!). From the middle of the Carrousel arch the line of sight
runs the length of the Tuileries Gardens, lines up on the obelisk
in the Place de Ia Concorde, and goes up the Champs-Elysees
to the centre of the Arc de Triomphe and beyond to the
skyscrapers of La Defense, in the western suburbs.
The Louvr&s modest triumphal arch stands in the open
space where costumed nobles performed in an equestrian
display-- carrousel--to celebrate the Dauphin’s birth in
1662. The design of the arch, an imitation of that of the
Arch of Septimius Severus in Rome, was conceived in
1808 by Charles Percier and Pierre Fontaine. The flanks of the
Carrousel arch are incised with a record of Napoleon’s
victories.

The Tuileries Gardens, which fronted the Tuileries

Palace (looted and burned in 1871 during the Commune), have
not altered much since André Le Nôtre redesigned them in
1664. Le Nôtre was born and died in the gardener’s cottage in

159
the Tuileries; he succeeded his father there as master gardener.
His design carried the line of the central allée beyond the
gardens and out into the countryside by tracing a path straight
along the wooded hill west of the palace. On this hilltop, 170
years later, the Arc de Triomphe was erected.
The Place de la Concorde was designed as a moated
octagon in 1755 by Jacques-Ange Gabriel. The river end was
left open, and on the inland side two matching buildings were
planned. Viewed clockwise starting from the Navy Ministry
(Ministère de la Marine), the statues are Lille, Strasbourg,
Lyon, Marseille, Bordeaux, Nantes, Brest, and Rouen. Louis-
Philippe also had the Luxor Obelisk, a gift from Egypt,
installed in the centre and flanked by two fountains
Between the twin buildings on the northeastern side of the
place, the broad rue Royale mounts to the Church of
Sainte-Marie-Madeleine, consecrated in 1842. The
church is a stern oblong, fenced with columns 60 feet high. Its
design, supposedly that of a Greek temple, is actually closer to
the Roman notion of Greek.
The Place de la Madeleine is the western terminus of the
Grands Boulevards, which imitate the arch of the river from
there north and east to the Place de la Republique and the
Bastille.
To the west off the rue Royale runs the rue du Faubourg
Saint-Honoré, which, in addition to the British Embassy and
the Elysee Palace (residence of the French president), has on its
shop windows some of the most prestigious names in the Paris
fashion trade.
Along the first 2,500 feet of the Champs-Elysées,
between Concorde and the Rond-Point des Champs Elysées (a

160
roundabout, or traffic circle), little has changed for a century:
the avenue is bordered with chestnut trees, behind which on
both sides are gardens, usually full of children at play. The
pavilions in the gardens are used as tearooms, restaurants, and
theatres. From the Rond-Point up to the Arc de Triomphe,
however, the avenue has changed with the times. Under the
Second Empire this was a street of luxurious town houses. They
were supplanted by cafés, nightclubs, luxury shops, and
cinemas, but the Street retained its feeling of luxury, and the
tree-shaded sidewalks (wide as a normal Street) offered
promenades that were the pride of Paris. Since the 1950s,
however, banks, automobile showrooms, airline offices, and
fast-food eateries have taken over much of the space.
At the top of the Champs-Elysëes is a circular place
from which 12 imposing avenues radiate to form a star (étoile).
It was called Place de l’Etoile from 1753 until 1970, when it
was renamed Place Charles de Gaulle. In the centre of the place
is the Arc de Triomphe, commissioned by Napoleon in 1806. It
is twice as high and as wide as the Arch of Constantine, in
Rome, which inspired it. Jean Chaigrin was the architect and
François Rude sculpted the frieze and the spirited group, ‘The
Departure of the Volunteers of 1792” (called “La
Marseillaise”). On Armistice Day in 1920, the Unknown
Soldier was buried under the centre of the arch, and each
evening the flame of remembrance is rekindled by a different
patriotic group.

The Latin Quarter (Quartier Latin).

161
 At the Concorde Bridge the boulevard Saint-Germain
begins, curving eastward to join the river again at the Sully
Bridge. A little less than halfway along the boulevard is the
pre-Gothic church of Saint-Germain des-Prés. The old church,
which belonged to a Benedictine abbey founded in the 8th
century, was sacked four times by Vikings and was rebuilt
between 990 and 1201. Parts of the present church date from
that time.
Beyond the boulevard Saint-Michel is the university precinct,
self-governing under the kings, where, in class and out,
students and teachers spoke Latin until 1789. At the junction of
the boulevards Saint-Germain and Saint Michel are the remains
of one of the three baths of the Roman city. These are in the
grounds of the Cluny Museum, a Gothic mansion built 1485-
1500, which now houses a collection of medieval works of art,
including the renowned six-panel unicorn tapestry “La Dame a
Ia licorne.”
The wide, straight boulevard Saint-Michel is the main
street of the student quarter. It is lined with bookshops, cafés,
cafeterias, and movie houses. The buildings of the university
are found on smaller streets. The university was built up of
colleges, each founded and supported by a donor, often a
prelate or a religious order. In about 1257 Robert de Sorbon,
chaplain to Louis LX, established a college, known as the
Sorbonne, that eventually became the centre of theological
study in France. The oldest part of the Sorbonne is the chapel
(1635-42), the gift of Richelieu, who is buried there. Designed
by Lemercier, it was one of a number of new domed Jesuit-
style churches of the period.

162
 The Sorbonne served for centuries as the administrative
seat of the University of Paris. In 1968-71 the university was
divided into a number of entirely separate universities, and the
Sorbonne building proper continues to serve as premises for
some of these.
At the top of the hill rising from the river the boulevard skirts
the Luxembourg Gardens, the remains of the park of Marie de
Médicis’ Luxembourg Palace (1616- 21), which now houses
the French Senate. The gardens are planted with chestnuts and
are enhanced with a pond for toy sailboats, a marionette theatre,
and statuary.
Across the boulevard at the end of the rue Soufflot stands the
Pantheon (1755-92), designed by Jacques Germain Soufflot. It
was commissioned by Louis XV, after his recovery from an
illness, as a votive offering to St. Genevieve and was to replace
the mouldering 5th- century abbey in her name. Though
intended as the principal church in Paris, it was renamed the
Pantheon by the Revolutionary authorities, who made it the last
resting place for heroes of the Revolution. The walling up of a
number of its windows and removal of much interior decoration
replaced the intended effect of light interior space with a
gloomy dignity. Among those buried under the inscription
“Aux grands bommes, la Patrie reconnaissante” (“To great
men, [ their grateful land”) are the authors Victor Hugo,
Voltaire, Rousseau, and Zola and Jean Moulin, chief of the
Resistance in World War II.

The Buttes.

163
 The river valley of Paris is almost entirely circled by
high ground. Upon the heights of Passy, on the Right Bank
between the western city limits and the Arc de Triomphe, perch
the wealthy neighbourhoods of the 16th arrondissement. The
Butte-Montmartre (18th arrondissement) and the
Buttes-Chaumont( 19th arrondissement), which rise along the
northern rim of the city, are still working-class. The 18th
arrondissement has broad avenues, but it also has winding
lanes, some of which become stairways on the steeper hills,
From the early 19th century until the migration in the 1920s to
Montparnasse, Montmartre was the major art colony of Paris.
Some sections are highly commercialized for the tourist trade;
others, however, are unself-consciously picturesque.
Montmartre is known for its nightclubs and entertainment.
The most noted landmark of Montmartre was built only
in 1919: the Sacred Heart Basilica (Basilique du Sacrd-Coeur),
paid for by national subscription after the French defeat by the
Prussians in 1870. The work began in 1876 but was delayed by
the death of the architect, Paul Abadie, who took inspiration
from the 12th-century five-domed Romanesque church of
Saint-Front in Périgueux, itself inspired by either Venetian or
Byzantine churches.

164
Basilique du Sacré-Coeur

Foreign Tours

The Bahamas

165
 Officially COMMONWEALTH OF THE BAHAMAS,
archipelago and state on the northwestern edge of the West
Indies, consisting of about 700 islands and cays and more than
2,000 low, barren rock formations, located off the southeastern
coast of Florida, U.S. The archipelago is spread across the
Tropic of Cancer and about 90,000 square miles (233,000
square km) of ocean in the western Atlantic. Andros (104 miles
long and 40 miles wide {167 km long and 64 km wide] is the
largest of the islands. The capital is Nassau on New
Providence--the most important island. Area 5,382 square miles
(13,939 square km). Pop. (1993 est.) 266,000.

166
 The land.

New Providence has the majority of the archipelago’s

population. The rest of the islands, chief among which are
Abaco, Andros, and Eleuthera, are called the Family, or Out,
Islands. All the islands of the archipelago are composed of
coraline limestone, lie mostly only a few feet above sea level,
and are generally flat. The highest point, Mount Alvemia
(formerly Como Hill), rises 206 feet (63 m) on Cat Island. Most
of the islands are long and narrow, each rising from its eastern
shore to a low ridge, beyond which lie lagoons and mangrove
swamps; coral reefs mark the shorelines. There are no rivers in
The Bahamas.
The mild subtropical climate of The Bahamas, with two
seasons (winter and summer is greatly influenced by the Gulf
Stream and Atlantic Ocean breezes. The average temperature
varies from 70°F (21°C) during the winter to 81° F (27° C)
during the summer; average annual rainfall is about 44 inches

167
(1,120 mm), though there is some variation between the
islands. The hurricane season lasts from mid-July to mid-
November.
The islands abound in tropical flora, including
bougainvillea, jasmine, orchid, and oleander. Caribbean pine
forests occur on some islands, such as Andros, Great Abaco,
and Grand Bahama. Native trees include the black olive, cork
tree, and several species of palm; mahogany, casuarina, and
cedar trees have been planted on some islands. Animal life is
dominated by frogs, lizards, and snakes; mosquitoes, sandflies,
and termites are widespread. There are numerous species of
birds, including the flamingo, the national bird. The Inagua
National Park on Great Inagua Island is the home of more than
50,000 West Indian flamingos, the largest such flock in the
world. Salt, aragonite, and limestone are the only commercially
important minerals. Salt is produced largely by solar
evaporation from salt beds on Great Inagua.

The people.

The people of The Bahamas are a blend of European

and African ancestry, the latter a legacy of the slave trade.
English is the official language, and almost all of the population
is Christian. Baptists account for about one-third of the
population, and Anglicans and Roman Catholics each constitute
approximately one-fifth of the total.
Only about 30 of the islands and cays are inhabited. During the
1970s there was significant rural-to-urban interisland migration,
mostly directed to the already densely populated islands of New
Providence (where two-thirds of the populace lives), Grand

168
Bahama, and Great Abaco. Long Cay, on the other hand, had
only a few dozen inhabitants. Average population density for
the country is relatively low.
The population growth rate of The Bahamas was
relatively high during the late 1970s (a trend that continued
intermittently through the 1980s), mostly because of a
substantial birth rate; consequently, almost two-fifths of the
populace is younger than 15 years of age. The death rate is
relatively low.

The Economy.

The Bahamas has a predominantly market economy that

is heavily dependent on tourism and international financial
services. The gross national product (GNP) is growing much
more rapidly than the population. The GNP per capita is similar
to those of other developed countries.
Agriculture accounts for about one-twentieth of the
GNP and employs a comparable fraction of the workforce.
Only about 1 percent of the land is arable, and soils are
shallow. The government has had only limited success in
increasing agricultural output, and nearly all of the country’s
foodstuffs are imported, largely from the United States. The
sunny climate favours the cultivation of tomato, pineapple,
banana, mango, guava, sapodilla, soursop, grapefruit, and sea
grape. Some pigs, sheep, and cattle are raised. The small
fishing industry’s catch is dominated by crayfish, groupers, and
conchs.
Mineral industries are limited to the production of salt
and cement. Grand Bahama has several petroleum

169
transshipment terminals. Manufacturing industries centre on the
production of rum and other liquors, cement, pharmaceuticals
(including hormones), canned tomatoes and pineapples, and
frozen crayfish. The Industries Encouragement Act offers
manufacturers relief from tariffs and various taxes. Electricity
is generated entirely from imported fuels.
Tourism accounts for as much as two-thirds of the GNP
and employs about two-fifths of the workforce. It centres on
New Providence and Grand Bahama; most tourists come from
the United States. Several hundred banks and trust companies
have been attracted to The Bahamas because there are no
income or corporation taxes and because the secrecy of
financial transactions is guaranteed. Public expenditures are
constrained by the government’s dependence on indirect taxes,
which are levied primarily on tourism and external trade. The
United States is The Bahamas’ principal trading partner and
exempts certain Bahamian products from duties under the
generalized system of preferences. Nassau and Freeport, the
latter on Grand Bahama Island, are the country’s two main
ports and also have international airports.

Cultural life.

Outstanding among traditional group activities is the

“Junkanoo” parade on Boxing Day and New Year’s Day. The
main thoroughfare is given over to hundreds of gaily bedecked
celebrants who, with clanging cowbells and beating drums,
march and dance to a rhythm of African origin. In Nassau,
amateur choral, dramatic, and dancing groups provide
entertainment with much local flavour.

170
History.

The Bahamas were originally inhabited by a group of

Arawak Indians known as Lucayan. Originally from the South
American continent, some of the Arawak had been driven north
into the Caribbean by the Carib Indians. Unlike their Carib
neighbours, the Lucayan were generally peaceful, more
involved in fishing than agriculture, and noncannibalistic.
When Columbus reached the New World in 1492, he is
thought to have landed on San Salvador (also called Watling
Island) or possibly Sarnana Cay, both in the Bahamas. The
Spaniards made no attempt to settle but operated slave raids on
the peaceful Arawak that depopulated the islands, and by the
time the English arrived the Bahamas were uninhabited.
In 1629 Charles I of England granted the islands to one
of his ministers, but no attempt at settlement was made. In 1648
William Sayle led a group of English Puritans from Bermuda
to, it is thought, Eleuthera Island. This settlement met with
extreme adversity and did not prosper, but other Bermudian
migrants continued to arrive. New Providence was settled in
1656. By 1670 the Bahamas were given to the Duke of
Albemarle and five others as a proprietary colony. The
proprietors were mostly uninterested in the islands, and few of
the settlements prospered. Piracy became a way of life for
many.
The colony reverted to the crown in 1717, and serious
efforts were made to end the piracy. The first royal governor,
Woodes Rogers, succeeded in controlling the pirates but mostly

171
at his own expense. Little monetary and military support came
from England. Consequently, the islands remained poor and
susceptible to Spanish attack.
Held for a few days by the U.S. Navy in 1776, and for
almost a year by Spain in 1782-83, the islands reverted to
England in 1783 and received a boost in population from
loyalists and their slaves who fled the United States after the
American Revolution. For a time, cotton plantations brought
some prosperity to the islands, but when the soil gave out and
slavery was abolished in 1834, the Bahamas’ endemic poverty
returned.
Two other periods of prosperity followed: the years 1861-65,
when the Bahamas became a centre for blockade runners during
the American Civil War, and in 1920-33, when bootlegging
became big business during the years of American Prohibition.
But these were economic accidents; not until the tourist
industry was developed after World War II did any form of
pennanent prosperity come to the islands.

172
173