Hos110 - Ch. 14 Marketing Hospitality

HOS110

Chapter 14 Competencies

1. Marketing is the effort to determine and meet the needs and wants of current and potential customers. Selling is getting rid of what you have and marketing is having what people want. Marketers look at it in the way in which marketing is the art of buying from customers, which is exactly the opposite of selling to customers. The 4P's of marketing are product, place, price, and promotion. The way all these four marketing efforts are combined is referred to as the marketing mix. A product can be a guestroom for a meal that a hotel or restaurant provides the guests and a hospitality product can also be an intangible service such as a food server serving a meal or a bell person carrying a guest luggage. Now place refers to the physical location of the business. Place may also have a profound effect on marketing methods. Another meaning for place is the location not of the hotel but of a site where the reservation for the hotel is made. This could be the hotels website for the website of the chain to which the hotel belongs and may also be by the phone or at the hotels central reservations office. They may also have travel agencies or on the Internet with an online travel agency. Many hotels and restaurants set their prices on a cost plus basis. The cost plus basis of pricing is determined by taking the total cost of providing a product or service and adding it to a percentage to cover overhead or fixed expenses and a predetermined gross profit margin. Cost Plus or product driven pricing is used by many businesses to set prices but ultimately consumers decide whether they will pay for what is being offered and if they won't pay the price set by management, the price must be adjusted or the product or service must be dropped. Consumer-based pricing is based on what consumers are willing to pay while competitive pricing is based on what competitors charge. For promotion activities fall into one of six categories: personal selling, advertising, public relations and sponsorship marketing, sales promotion, direct marketing communications, and point of purchase communications. Integrated marketing communications has become the new model that many friends use in organizing their marketing activities. This ensures that the organization sends out messages to its employees, customers, the press, and others that are consistent and directed at achieving the overall mission of the organization. Business activities should be planned. Good marketing plans have several parts including: situation analysis, objectives, strategies, tactics, and controls. A marketing departments situation analysis is in some ways similar to feasibility studies prepared for proposed restaurants or hotels, except that the marketing departments situation analysis is prepared for an already existing property and is even more marketing oriented. A situation analysis is prepared by a marketing department which typically consists of: marketplace analysis, competition analysis, a review of internal data, but target audience profile, and a problems and opportunities section. This analysis is often called a swot analysis.
2. Most hotels have a marketing and sales or sales department. Sales persons usually report to a sales manager, who may in turn report to the director of marketing and sales. Sales managers are in charge of the sales office and are responsible for overseeing the sales staff. Some sales managers assign sales persons according to source of business. Other sales persons may be in charge of travel agency sales, military and government sales, and catering sales. Sales managers must first recruit and train sales persons. The ability to be an effective sales person can be learned, it is not a skill that is inherited or based purely on natural talent. Characteristics that successful sales persons share include: always innovating and taking risks to try and surpass previous levels of performance, powerful sense of mission and set short, intermediate, and long-term goals to fulfill that mission, more interested in solving problems then and placing blame or bluffing their way out of situations, see themselves as partners with their customers and as team players rather than adversaries, they do not take rejection personally rather they treat it as information they can learn from, and they use mental rehearsal. The one characteristic that is essential in sales is intelligence and also understanding of how people think and how to relate to them.
3. Through advertising, we attempt to talk to those prospects who will never get a personal sales call, as well as to prospects who never directly communicate with an advertiser. Advertising may be repetitive and may increase the value of products and services in the customers eyes. Advertising is a planned communication activity in which messages in mass media are bought to persuade audiences to adopt goods, services, or ideas. A form of confidence is developed when a product is advertised in a way that boosts the consumers self-esteem, telling a person that using the product will make him wear her feel more successful, more important, or more self-confident. Added value is what advertising adds to the value of the product. The need for hospitality managers to understand the role of advertising is underscored by the significant amounts of money invested in advertising by hospitality enterprises. No discussion of the role of advertising would be complete without mentioning the social concerns that are sometimes raised when advertising is discussed. Consumers wants and needs are determined by society, not by advertising. Critics sometimes say that advertising is sometimes tasteless, it reinforces undesirable stereotypes, it exerts an unhealthy effect on social values, and it influences the character of the media. Advertising has a number of characteristics that distinguish it from other forms of communication, these are: it is paid by the sponsor rather than run at the discretion of the medium, it is impersonal, it identifies the sponsor of the message, and it is persuasive. To produce effective advertising campaigns, advertisers need a competitive advantage, unique positioning, and a segmented market. For a competitive advantage, there must be a clear difference between what you offer and what your competition offers. Advertising works best when a business has a demonstrable competitive advantage that it wants to communicate to consumers. These may be superior service, lower prices, or higher quality. For positioning, companies that aspire to offer everything in their advertising messages in reality don't offer anything of value or importance because people don't remember what they are saying. According to Ries and Trout, and advertiser gets into our minds by linking it's message to information we already know, not by getting us to remember new information. Market segmentation refers to a companies ability to identify different segments of its market and separately promote its products and services to those segments. This may also be called target marketing. Companies that practice target marketing make different products for each market segment and then create different advertising campaigns for each segment. Five basic types of travelers American Express identified are: indulgers, dreamers, economizers, adventurers, and were years. Advertising agencies help clients create and place advertising. Agencies employ marketing strategist, artists, writers, production managers, and media selection experts. Agencies work on a negotiated fee basis or for a commission of 15%. Many advertisers opt to handle their advertising themselves by hiring freelance writers and artists to design their advertising, and then negotiating with the media directly for space and time. Good campaigns are based on marketing plans, which in turn are based on thorough market research. Effective advertising is almost always the product of a rational, methodical process. Print advertisements consist of three basic elements: headline which is the heading where the title of the ad, body copy which is the main portion of an ad, and the signature or logotypes. The signature is the name of the advertiser while a logotype is a unique trademark, name, symbol, signature, or device used to identify a company or other organization. Print advertising guidelines includes containing a promise. This is used to attract readers. If they are advertising something that is only available to certain groups it is a good idea to put something in the headline to flag them down. The final part of an ad should contain a call to action. Unlike print media, ads in broadcast media are intrusive. Listeners and viewers have turned in to a program, and in the middle of that program there interrupted by a commercial that they may not be interested in. A way to entertain consumers is through humor. Three cutting edge strategies that may reach out and grab today's consumer are making them laugh, making them bond, and finding out what they really like.
4. A hospitality company functions as a part of society that consists of the people who work for it, the people and companies who do business with it, the public at large, and the government that regulates and taxes it. These groups are known as a companies publics. Public relations are the techniques that a company uses to improve relationships. The bowl of public relations is usually to improve The climate or atmosphere in which a company operates. Results a company may expect from a successful public relations campaign are: it's products and services or better known, it's relationship with employees have improved, and it's public reputation has improved. A successful public relations campaign can get people to do something that will help a company, stop them from doing something that might hurt it, or at least allow the company to proceed with a course of action without criticism. In developing and implementing public relations plans companies use a simple five step process: research or fact-finding, planning, action, Communication, and measurement or evaluation. Public relations and publicity are often confused with each other. Richard wiener defines publicity as a public relations technique in which information from an outside source is used by the media. Messages are developed and distributed without specific payment to the media, through selected outlets to further particular interests of the clients. It is sometimes called free advertising. Advertising is paid for and advertisers control the message in there ads, Publicity is not paid for by the advertiser, and the media controls the message because they are writing or broadcasting stories that they consider newsworthy which also just happen to mention a company or be about a company. Hotels and restaurants often try to stimulate publicity by inviting travel editors and writers to visit. Sales promotion consists of sales tools and techniques designed to encourage immediate action not only by consumers but by others in the trade. Extra commissions paid to travel agents, sales contests, and familiarization trips for agents are all examples of hospitality industry sales promotions directed at the trade. Promotions are used extensively by restaurants to get publicity and stimulate business. Technology continues to transform the way the industry does business. More then eight in ten leisure travelers and approximately nine in ten business travelers access the Internet from their home or office computers and the majority of travelers use that capability to plan their trips. The least costly method of Internet marketing is via email. Emails are more likely to be read than a print ad. Social media has become a very big factor in helping companies advance. Currently the most popular of the social media outlets is Facebook. Because of this high interest in social media the hospitality industry has been quick to adopt it. Because there is so much marketing and advertising most consumers are turned off by much of it. Besides the consumer turn off factors, marketers have to deal with an ever-changing consumer base. And another new form of advertising is viral advertising and it is called this because the marketing message spreads from person to person like a virus. Leveraging advertising dollars today means using all of these new techniques and more, it requires thinking outside the box and creating new fangled ways of delivering a message.