SIHM300: TOURISM AND HOSPITALITY MARKETING

CHAPTER 1: An Overview of Marketing in the

Hospitality Industry
 SIHM300: TOURISM AND HOSPITALITY MARKETING
CHAPTER 1: An Overview of Marketing in the Hospitality Industry
OVERVIEW

When someone travels to a destination,

either as a tourist or a mere visitor, the
person will need a place to stay and relax.
The accommodation provides a base
where one can engage in the process of
staying at a destination. Over the years,
the accommodation has become the
center of focus when hosting guests. It is
an important element to be considered
during the planning of a journey because
it comprises the biggest element of
tourist spending during a trip.
 SIHM300: TOURISM AND HOSPITALITY MARKETING
CHAPTER 1: An Overview of Marketing in the Hospitality Industry
OVERVIEW

Marketing is an essential element in running any business. Even though it

is proven to be an important factor that determines the success of any
hotel unit, yet it is a phenomenon that is often taken for granted. This
chapter defines marketing and explains in detail the different marketing
styles used in the hospitality industry.
Marketing is a social and managerial process by which individuals and
groups obtain what they need and want through creating and exchanging
products and value with others. All marketing efforts are made for
attracting customers, serving superior value, and capturing return value
for the customer in a superior routine than the competitors in the
marketplace who compete with the same motive. So, understanding the
customer, the marketplace, and the behavior is essential for any
marketing decision and action.
 SIHM300: TOURISM AND HOSPITALITY MARKETING
CHAPTER 1: An Overview of Marketing in the Hospitality Industry
FIVE CORE MARKETING CONCEPTS

FIVE CORE MARKETING CONCEPTS

Marketing pundits and gurus have identified and acknowledged the 5 core
concepts of customer and marketplace as identified as follows:
1. Needs, Wants, and Demands
The most basic concept of fundamental marketing is that of human
needs. Marketing, like quality, starts with customer needs and ends
with customer satisfaction.
Needs are states of felt deprivation, personal necessities that motivate
behavior, and things that people cannot live without like food, clothing,
warmth, safety, and shelter. Wants, on the other hand, are the form
taken by human needs as they may differ from person to person. These
are needs shaped by culture and individual personality.
 SIHM300: TOURISM AND HOSPITALITY MARKETING
CHAPTER 1: An Overview of Marketing in the Hospitality Industry
FIVE CORE MARKETING CONCEPTS

Every human being requires food but what form they take food is
different due to the cultural and social attributes of an individual.

As more and more products are introduced, we realize that we have

unlimited wants. We crave for more and unceasingly want more than
what we already have. However, we also know that with limited
resources we cannot buy everything we want; Thus, we are constrained
to choose products that will give us the most value and satisfaction for
our money. The concept of demands comes into the picture. When
supported by purchasing power, or the ability to buy, wants become
demands.
 SIHM300: TOURISM AND HOSPITALITY MARKETING
CHAPTER 1: An Overview of Marketing in the Hospitality Industry
FIVE CORE MARKETING CONCEPTS

2. Products / Market Offerings

Consumers' needs and wants are satisfied through market offerings.
Market offerings are some combination, a mixture of a blend of
physical products, services, information, ideas, or experiences offered
to a market to satisfy a need or a want. People satisfy their needs and
want products.
A product is anything offered for sale to satisfy a need or want.
Tangible products are called goods. Intangible products are known as
services.
For any sellers putting the best blend of offers in a market, the offering
is the challenge. Many of them make the mistake named "marketing
myopia" - paying more attention to specific products they offer than to
the benefits and experiences produced by these products.
 SIHM300: TOURISM AND HOSPITALITY MARKETING
CHAPTER 1: An Overview of Marketing in the Hospitality Industry
FIVE CORE MARKETING CONCEPTS

Here, they are so hooked with their products that they focus only on
existing wants and lose sight of customer needs. They forget that a
product is only a tool to solve a consumer problem. "market offerings" -
that get results for the sellers puts the customers' needs, wants, and
demands first.

3. Value, Satisfaction, and Quality

Needs can be satisfied by a wide array of products that people can
choose from. One question we need to answer since we have limited
resources, is that: how do we choose from among the wide array of
products offered to us to satisfy our needs and wants? The answer to
this question is the third set of core marketing concepts - VALUE,
SATISFACTION, and QUALITY
 SIHM300: TOURISM AND HOSPITALITY MARKETING
CHAPTER 1: An Overview of Marketing in the Hospitality Industry
FIVE CORE MARKETING CONCEPTS

When deciding which product to buy and where to buy it, customer
value should be considered. Customer value is the difference between
the value of buying, owning, and using the product, and the cost of the
product. The customer compares the cost of the product with the
benefits he gains from using the product.

Another factor in deciding which product to buy is customer

satisfaction. Customer satisfaction refers to the difference between the
buyer's expectation and the perceived performance of the product.
Before making any purchase, a customer would already expect in mind
and his/her task is to look for a product that he thinks would perform
and deliver according to his expectations.
 SIHM300: TOURISM AND HOSPITALITY MARKETING
CHAPTER 1: An Overview of Marketing in the Hospitality Industry
FIVE CORE MARKETING CONCEPTS

Customer satisfaction is closely linked to quality. In recent years, many

companies have adopted total quality management (TQM) programs
pertaining to the continuous improvement of company products,
services, and marketing processes. Quality is what the customer says it
is. The decision-maker and the final evaluator of quality is the
customer. Indeed, quality must begin with customer needs and end
with customer satisfaction.

Marketers must be careful to set the right level of expectations.

Overcooked or undercooked market offerings will not help the
marketer's capture value in return for customer satisfaction.
 SIHM300: TOURISM AND HOSPITALITY MARKETING
CHAPTER 1: An Overview of Marketing in the Hospitality Industry
FIVE CORE MARKETING CONCEPTS

Satisfied customers will buy again and tell others about their good
experiences, on the other hand, dissatisfied customers will eventually
switch to competitors and surely disparage the product to others.

4. Exchange, Transactions, and Relationships

Marketing exists when people decide to satisfy their needs and wants
through beneficial exchanges. Exchange is the act of obtaining a
desired object by offering something in return. Exchange is said to be
the core concept of marketing.
If the exchange is the core concept of marketing, the transaction is
marketing's unit of measurement. A transaction, exchange, or trade of
values between two parties, measures the number of exchanges that
take place.
 SIHM300: TOURISM AND HOSPITALITY MARKETING
CHAPTER 1: An Overview of Marketing in the Hospitality Industry
FIVE CORE MARKETING CONCEPTS

By this, marketers try to build and maintain profitable exchange

relationships with target audiences interested in an exchange.

5. Markets
A market refers to a set of actual and potential buyers of a product who
have a common need or want that can be satisfied through an
exchange. A market in marketing does not refer to a place but a group
of people bound by a common need or want. The size of the market is
measured by the number of people who exhibit the need, have the
resources to engage in an exchange, and are willing to offer these
resources in exchange for what they want.
 SIHM300: TOURISM AND HOSPITALITY MARKETING
CHAPTER 1: An Overview of Marketing in the Hospitality Industry
FIVE CORE MARKETING CONCEPTS

Marketing efforts are undertaken for controlling markets to bring

about profitable customer relationships. For creating these
relationships marketers must search for buyers and their needs,
design good market offerings, set prices for them, promote them, and
store and deliver them.

Activities such as consumer research, product development,

communication, distribution, pricing, and services are a must to stay
ahead of competitors.
 SIHM300: TOURISM AND HOSPITALITY MARKETING
CHAPTER 1: An Overview of Marketing in the Hospitality Industry
THE MARKETING MIX

THE MARKETING MIX

Success in marketing is determined by four equally important factors that
are collectively known as the marketing mix. These are Product, Price,
Place, and Promotion. It is said that the success of marketing depends on
the success of the company's plans as far as the marketing mix is
concerned.
A high quality, top-performing product sold at a reasonable price at
convenient and accessible places backed up by intensive promotion spell
MARKETING SUCCESS. If we put marketing success into an equation, it
would be:
High quality Convenient and
Marketing Success = top-performing + Reasonable + Accessible + Intensive
PRODUCT PRICE PLACE PROMOTION
 SIHM300: TOURISM AND HOSPITALITY MARKETING
CHAPTER 1: An Overview of Marketing in the Hospitality Industry
WHAT IS TOURISM AND HOSPITALITY MARKETING?

WHAT IS TOURISM AND HOSPITALITY MARKETING?

Marketing must be understood in the sense of satisfying customer needs.
If the marketer understands the customer's need; develops products that
provide superior customer value, and prices distribute and promote them
effectively, these products will sell easily.

In the hotel industry, marketing and sales are often thought to be the same,
and no wonder: the sales department is one of the most visible in the
hotel. Sales managers provide prospective clients with tours and entertain
them in the hotel's food and beverage outlets. Thus, sales function is
highly visible, whereas most of the nonpromotional areas of the marketing
function take place behind closed doors.
 SIHM300: TOURISM AND HOSPITALITY MARKETING
CHAPTER 1: An Overview of Marketing in the Hospitality Industry
WHAT IS TOURISM AND HOSPITALITY MARKETING?

In the restaurant industry, many people confuse marketing with

advertising and sales promotion. It is not uncommon to hear restaurant
managers say that they "do not believe in marketing" when they actually
mean that they are disappointed with the impact of their advertising. In
reality, selling and advertising are only two marketing functions and often
not the most important. Advertising and sales are components of the
promotional element of the marketing mix. Other marketing mix elements
as mentioned earlier include product, price, and place (distribution).
Marketing also includes research, information systems, and planning.
 SIHM300: TOURISM AND HOSPITALITY MARKETING
CHAPTER 1: An Overview of Marketing in the Hospitality Industry
WHAT IS TOURISM AND HOSPITALITY MARKETING?

The two main industries that comprise the activities we call tourism are
the hospitality and travel industries. Successful hospitality marketing is
highly dependent on the entire travel industry. Meeting planners choose
destinations based on the cost of getting to the distribution, the value of
the hotels, the quality of restaurants, and evening activities for the
attendees.
 SIHM300: TOURISM AND HOSPITALITY MARKETING
CHAPTER 1: An Overview of Marketing in the Hospitality Industry
MARKETING MANAGEMENT

MARKETING MANAGEMENT
Marketing management is the analysis, planning, implementation, and
control of a program designed to create, build, and maintain beneficial
exchanges with target buyers to achieve organizational objectives. Thus,
marketing management involves managing demand, which in return
involves managing customer relationships. Hence, marketing management
is also called demand management.

Marketing is a department of management that tries to design strategies

that will build profitable relationships with target consumers. But what
philosophy is the best for a company in setting marketing strategies?
 SIHM300: TOURISM AND HOSPITALITY MARKETING
CHAPTER 1: An Overview of Marketing in the Hospitality Industry
MARKETING MANAGEMENT

There are five (5) alternative concepts under which organizations design
and carry out their marketing strategies.

Marketing Management Principles

1. Production Concept. This concept holds that given a wide array of
products in the market, consumers will prefer to buy products that are
widely available and highly affordable.
2. Product Concept. This concept holds that consumers favor products
that offer the best quality, performance, and innovative features.
3. Selling Concept. This concept holds that consumers will not buy enough
of the company's products unless the company undertakes an extensive
and large-scale selling and promotional effort.
 SIHM300: TOURISM AND HOSPITALITY MARKETING
CHAPTER 1: An Overview of Marketing in the Hospitality Industry
MARKETING MANAGEMENT

4. Marketing Concept. This concept holds that achieving the goals of an

organization depends on knowing the needs and wants of the target
market and delivering the desired satisfaction more effectively and
efficiently than others.
5. Social Marketing Concept. This concept holds that organizations must
not only study and satisfy the customer's needs and wants but also
deliver superior value in a way that maintains or improves the
customer's as well as the society's well-being.
SIHM300: TOURISM AND HOSPITALITY MARKETING
CHAPTER 1: An Overview of Marketing in the Hospitality Industry