Chapter Three

© 2007 Pearson Education, Upper Saddle © 2007 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. River, NJ 07458. All Rights Reserved.

Shoemaker, Lewis, and Yesawich: Marketing Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4Leadership in Hospitality and Tourism, 4 thth edition edition

Chapter ThreeChapter Three

The Marketing Mix and the The Marketing Mix and the Product/Service MixProduct/Service Mix



Evolution of MarketingEvolution of Marketing

4 Ps 4 Ps Traditional marketingTraditional marketing

7 Ps Adds the service component 7 Ps Adds the service component

of marketingof marketing

13 Cs13 Cs Incorporates the focus on Incorporates the focus on customer loyaltycustomer loyalty



4 Ps of Marketing4 Ps of Marketing

ProductProduct PricePrice Place (distribution)Place (distribution) PromotionPromotion



7 Ps of Marketing7 Ps of Marketing

ProductProduct PricePrice PlacePlace PromotionPromotion ProcessProcess Physical attributesPhysical attributes PeoplePeople



Thirteen Cs of Marketing CustomerCustomer Categories of Categories of

offeringsofferings Capabilities of firmCapabilities of firm Cost, profitability, Cost, profitability,

and valueand value Control of processControl of process Collaboration Collaboration

within firmwithin firm

CustomizationCustomization CommunicationsCommunications Customer Customer

measurementmeasurement Customer careCustomer care Chain of Chain of

relationshipsrelationships Capacity controlCapacity control CompetitionCompetition



The Hospitality Marketing MixThe Hospitality Marketing Mix

Another way of examining the Another way of examining the marketing mixmarketing mix

Framework developed by RenaghanFramework developed by Renaghan– Product/service mixProduct/service mix– Presentation mixPresentation mix– Communications mixCommunications mix

Framework developed by BordenFramework developed by Borden– PricePrice– DistributionDistribution



Designing the Hospitality ProductDesigning the Hospitality Product

Begins with the wants of the customerBegins with the wants of the customer The bundle purchase concept: all The bundle purchase concept: all

individual elements of the bundle are individual elements of the bundle are important to the product as a wholeimportant to the product as a whole– The formal productThe formal product– The core productThe core product– The augmented productThe augmented product



The Complexity of the The Complexity of the Product/Service MixProduct/Service Mix

Standard productsStandard products– Cost benefitsCost benefits– Lose customers who want Lose customers who want

customizationcustomization Standard products with Standard products with

modificationsmodifications– Easy to adapt as market changesEasy to adapt as market changes

Customized productsCustomized products– Designed to the target marketDesigned to the target market



Making the Product DecisionMaking the Product Decision

Step 1: Identify the target marketStep 1: Identify the target market

Step 2: Define your business goalsStep 2: Define your business goals

Step 3: Assess capabilitiesStep 3: Assess capabilities



Key PointsKey Points

Analyzing the hospitality Analyzing the hospitality product/serviceproduct/service– What is it in terms of what it does for What is it in terms of what it does for

the customer?the customer?– How does it solve problems?How does it solve problems?– What benefits does it offer?What benefits does it offer?– How does it satisfy demand?How does it satisfy demand?



Key Points (cont.)Key Points (cont.) Analyzing the hospitality Analyzing the hospitality

product/serviceproduct/service– Who uses it? Why? How?Who uses it? Why? How?– How does it compete?How does it compete?– What are the occasions for its use?What are the occasions for its use?– What are its attributes?What are its attributes?– What is the perception of it?What is the perception of it?– How is it positioned?How is it positioned?– Which attributes are salient? Which attributes are salient?

Determinant? Important?Determinant? Important?



The Product Life CycleThe Product Life Cycle

Introduction

Growth

Maturity Decline

Time

Sal

es



The Product Life Cycle (cont.)The Product Life Cycle (cont.)

The Introductory/Embryonic StageThe Introductory/Embryonic Stage– Entry into the marketplaceEntry into the marketplace– The thirteen Cs: Focus on customer, The thirteen Cs: Focus on customer,

category of offering, control of the category of offering, control of the process, communication, and capabilities process, communication, and capabilities of the firmof the firm

– High-cost and low-profitHigh-cost and low-profit– Produce to meet demandProduce to meet demand– The customer must be persuaded….The customer must be persuaded….




The Growth StageThe Growth Stage– Customers are “early adopters”Customers are “early adopters”– Satisfy the customerSatisfy the customer– Can be slow or rapid growthCan be slow or rapid growth– Refine product Refine product – Price appropriatelyPrice appropriately




The Mature StageThe Mature Stage– Positioning establishedPositioning established– Market is steady and loyalMarket is steady and loyal– The thirteen Cs: examine category of The thirteen Cs: examine category of

offerings, communicationofferings, communication– Refurbish physical elementsRefurbish physical elements– Sales growth slowsSales growth slows




The Decline StageThe Decline Stage– Faster than the growth stageFaster than the growth stage– Reduces costsReduces costs– The thirteen Cs: CommunicateThe thirteen Cs: Communicate– Failure due to loss of focus, slip in Failure due to loss of focus, slip in

quality or unawareness of need to quality or unawareness of need to changechange

– The “death spiral”The “death spiral”



How to Determine Where You Are How to Determine Where You Are in the Product Life Cyclein the Product Life Cycle

Study past performanceStudy past performance– Sales growth, market share progressionSales growth, market share progression– Alterations or enhancements made to Alterations or enhancements made to

productproduct– Sales and profit history of similar related, Sales and profit history of similar related,

complementary, or comparable productscomplementary, or comparable products



How to Determine Where You AreHow to Determine Where You Arein the Product Life Cycle (cont.)in the Product Life Cycle (cont.)

Study past performance Study past performance – Customer feedbackCustomer feedback– Repeat and new businessRepeat and new business– New competition and new concept New competition and new concept

introductionsintroductions– Number of competitors and S&WNumber of competitors and S&W– Critical factors for successCritical factors for success– Customer Customer

Chapter Three

Documents

Transcript of Chapter Three