SHA502: Conducting Effective Hospitality Marketing … a longitudinal study (tracking study) to...

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SHA502: Conducting Effective Hospitality MarketingResearch


MODULE OVERVIEW

Module 1: Conducting Market Research

The business landscape changes rapidly, what is true for a business today might not be true tomorrow. Market research isthe way for businesses to anticipate and plan for coming changes before they impact their bottom line. Market research isone of the best ways to find out how your service is being received by customers, and understanding customers is key toguiding your business to success. But what methods of marketing research are there? What are the best methods of datacollection to use to meet your particular business needs? How do you analyze a market?

Beginning with the definition of the marketing research process, in this module you find the methods and tools to approachnumerous issues. You then move onto learning the stages of the buying process and the other factors influencingconsumer buying decisions, including the important SWOT method of analysis.

After completing this module, you should be able to:

Define marketing researchExplain the need for marketing researchDiscuss the six steps in the marketing research processDiscuss elements of consumer behavior relevant to the hospitality industryDiscuss the six stages of the buying decision process as it applies to the hospitality industryDiscuss factors influencing consumer buying decisions in the hospitality industryDefine the term psychographicsDefine the term segmentation and its purpose as it applies to the hospitality industryDiscuss the basic criteria for segmentationDiscuss the advantages and limitations of market segmentationDefine environmental scanningDiscuss the seven interrelated environmental forces that organizations must contend withDefine the term competitive advantageDefine the term SWOT AnalysisEvaluate opportunities for SWOTExplain what is meant by breakthrough opportunities


TOPIC OVERVIEW

Introduction to Marketing Research

This topic lays the foundation for understanding the market research process, a foundation added to and expanded onthroughout the whole module. There is a lot of information available in this module, and many of the activities here arepresented with an attached text transcript you may print if you wish for later reference.

You begin this topic with a fictional case study. In it you play the role of a consultant working for a market research firm.You are helping a hotel's general manager solve a business problem using sound marketing research. You are thenpresented with the core elements of the marketing research process and then you must discuss how you would implementthem.

After completing this topic, you should be able to:

Define marketing researchExplain the need for marketing researchDiscuss the six steps in the marketing research processDiscuss the concept and benefits of database marketing


Marketing Research Process Case Study

In this activity you take on the role of a consultant working for a market research firm. Your firm has been hired by a small,elegant, high-priced hotel in San Francisco. The general manager has some worries about how the hotel's business hasdeveloped in the last few years. Launch the activity below to watch and listen as she explains her concerns to you. Youthen answer a number of questions to help define the scope and goals of the study.

Transcript: Marketing Research Process Case Study

Hello, good to meet you! My name is Ellen Roth, I am the General Manager here at the Golden Bay Inn. Our problem isthat we have noticed a downturn in business lately, and when I started looking into it, I discovered that we have very lowcustomer-retention rates. In fact we only averaged 37 percent last year and 38 percent the previous year. We seem to beable to get people in the door, but they aren't coming back. I work hard with our small, 20-person staff, and I think that weare well-positioned in the San Francisco market to compete with other small, high-priced, elegant hotels such as ours, so Ineed to know why this is happening. With my daily responsibilities, I don't have the time to do the in-depth marketinganalysis that is needed to find out the root causes of our troubles. I hope you can help us-you have come highlyrecommended!


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What is Marketing Research?

In the hospitality industry, customer needs vary widely from the general to the specific. Marketing research is a processthat helps organizations separate the vital high-priority needs from the trivial low-priority needs. High-priority needs arethose that contribute most to value perception, customer satisfaction, and ultimately, profitability.

Marketing research also helps organizations identify and define marketing opportunities and problems; generate, refine,and evaluate marketing actions; monitor marketing performance; and improve their understanding of marketing as aprocess.

Marketing Research fulfills three primary roles:

: gathering and presenting statements of factDescriptive: explaining dataDiagnostic

: attempting to estimate the results of a planned marketing decisionPredictive

An illustrated presentation appears below, along with a text transcript. Use these resources to build your understanding ofthe marketing research process. The content of this resource is the basis for this topic's discussion. You may want to openboth this window and the discussion window at the same time, to do so.click here

Transcript: What is Marketing Research?

The Six Steps of the Marketing Research Process

Define research objectives or problemFormulate hypothesesPlan the research designDevelop the sampling plan and collect dataAnalyze the dataPrepare the final report

Step 1: Define Research Objectives or Problem

Typical objectives of a market research project in the hospitality industry may include:

Defining who the customers are, what they want, what their attitudes toward promotional programs are.Conducting a longitudinal study (tracking study) to track per-customer profit, brand or product awareness,patronage, attitude toward product/brand image.Obtaining information about the company and its business environment through internal research (for example,sales analysis and marketing cost analysis) and interviewing company officials. This method of research is calledsituation analysis.An informal investigation involving interviews with informed persons outside the firm.

Step 2: Formulate Hypothesis

An hypothesis is an educated guess about the relationships between events or about what will happen in the future. Inscientific method, hypotheses are developed and tested.

Step 3: Plan the Research Design

Create a plan that specifies what information will be obtained and how.

Step 4: Develop the Sampling Plan and Collect the Data

The total group that the researcher wants to study is called the population or universe. If all sources are contacted, theresults are known as a census. If a representative group is contacted, that group is known as a sample-a subset drawnfrom a larger population. Samples can be classified as:

Probability samples: those in which every member has an equal chance of being selected.Non-probability samples: arbitrary samples not subject to statistical tests. For example a convenience samplesimply targets respondents who are easily accessible.


A key issue in sampling is determining how representative the sample is of the total population.

A properly selected sample will have the same characteristics as the universe from which it is selected.

Sampling error occurs when a sample is not representative of the target population.

Step 5: Analyze the Data and Interpret the Findings

It is up to the researcher to analyze the data and identify relationships, trends, and patterns.This is frequently done through the use of statistical packages. There are several easy-to-use computer programsthat analyze data, such as SPSS or SAS.

Step 6: Write and Present the Report

Findings of marketing studies should be presented in such a way as to increase the likelihood of their usefulness tothe decision maker.Reports should be clear and concise and directed toward management.


Methods of Data Collection

Once you've developed a sampling plan for your marketing research, it's time to collect the data. Learn about the variousmethods for collecting that data in this resource.

Transcript: Methods of Data Collection

Primary Data

is information specifically collected for a current problem.Primary data

:Primary data

Must be collected if the specific research question cannot be answered by available secondary dataAnswer specific questionsAre currentAre gathered using methodology specified by the researcherCan be gathered in such a way as to maintain accuracy and secrecy

: firm's suppliers, sales people, middlemen, or customers.Sources of primary data

The major disadvantage of primary data is the expense involved in collecting the data.

Primary research may be broadly divided into two types: qualitative and quantitative research.

Qualitative

Qualitative research captures feelings and behavior motivations. It seeks in-depth, open-ended responses.The use of qualitative, or psychosociological, research is spreading throughout U.S. industries.One explanation for this is that qualitative research is relatively fast and may be less expensive, in some cases,than quantitative research.Qualitative research is also a way for firms to understand the nuances and connotations of their products,particularly in advertising campaigns.

Quantitative

Quantitative research provides hard numbers; it seeks structured responses that can be summarized in numbers-likepercentages, averages, or other statistics.

Quantitative methods are still the most prevalent.Despite the growth in popularity of qualitative research, especially focus groups, survey research still remains themost commonly used method of understanding consumer behavior.Survey research data collection still has its advantages, particularly the ability to project the sample results onto thepopulation as a whole.

Survey

Survey Research Advantages and Limitations

Response rate is often low.Responses may not be representative of the population. Those participants willing to respond to the study mayhave stronger positive or negative attitudes about the issue under consideration than the general population. Thus,these participants may be eager to have their voice heard, but they may not reflect the prevailing attitude of thelarger population.Structured questioning gives more objective results.Surveys are flexible in that they may be conducted by mail, by phone, in person or electronically through e-mail orthe Internet.Questionnaires may be open-ended questions, closed-ended questions, or scaled-response questions.Questions must be clear, concise, and not double-barreled. That is, surveys should ask only one question at a time;otherwise, the researcher cannot be sure to which question the study participant is responding.Measurement error occurs when the information desired by the researcher differs from the information provided bythe measurement process. For example, the questions on the survey may evoke responses that do not elicit the


information the researcher needs to answer the research questions.

Pros and Cons of Types of Surveys

Mail surveys are common, convenient, and cost effective, but their response rate may be low.Fax surveys may yield faster results than mail surveys, as well as a higher response rate.Mail panels provide a good response rate for those who agree to participate.Telephone surveys are fast and effective, but respondents cannot see items under discussion, and questionsasked must be very short.Personal interview surveys can be in-depth, but are expensive and time-consuming.Computer interviews allow for faster gathering and analysis of data. Respondents may be more truthful inresponding to a computer, especially on sensitive topics, but the computer cannot explain misunderstoodquestions.

Response rates for e-mail and Internet surveys are generally very low (<10 percent), but electronic surveysare the most cost-effective.

Observation

Observational Method

The observational method involves actually viewing the overt actions of the subjects. There are three way ofaccomplishing this:

People watching people.People watching physical phenomena.Machines watching people.

Mystery shoppers, one-way mirror observations, traffic counters, VideoCart (tracks shopper traffic patterns), and passivepeople-meters are all ways of using the observation method.

A drawback of the observation method is that motivations, attitudes, and feelings are not measured, thereby limiting therichness of the results.

Experimental

Experimental Method

This research approach is one where researchers compare the responses of groups that are similar except on thecharacteristic being tested.

Marketers can often only control one independent variable and must assume that all other relevant variablesremain the same.An experiment in the field is called test-marketing.Test markets are more realistic, but are also more expensive, time-consuming, and impossible to keep secret fromthe media and competitors.

Secondary

Secondary Data

Secondary data are data previously collected for any purpose other than the one at hand. Secondary data may be internalor external data. A lot of secondary data is available. Sources include:

LibrariesGovernment, at all levelsInternetPrivate business firms, such as NielsenTrade, professional and business associationsAdvertising mediaUniversity research organizationsCompany databases and records

A number of syndicated data sources are also available. These include, but are not limited to, PRIZM; CREST;Technomic, Inc.; Gazelle Systems, Inc.; and STR data.


PRIZM Database segments USERS by zip code and block tracts, grouping neighborhoods on the basis of socialrank, mobility, ethnicity, family life cycle, and housing.Consumer Reports and Eating-Out Share Trends (CREST) studies and reports on trends in purchases of foodprepared away from home.Technomic, Inc. studies market share for restaurant chains, and reports on trends in food service.STR Global collects and reports market share and operational performance of hotels.

The advantages of secondary data are that it is less expensive and faster to obtain than primary data. For example,on-line computerized databases simplify the task of retrieving secondary data so the needed data may be availableimmediately and at a nominal cost. For these reasons, researchers should first attempt to use secondary data to answerresearch questions. Only when the secondary data prove to be insufficient in providing a thorough answer or if thesecondary data are suspect should researchers begin the more costly primary data collection.

Disadvantages of secondary data include obsolete data, irrelevant data, and questionable quality and accuracy. Instudying internal data, remember that collected data in summary form may hide important evaluative information.

Focus Groups & Other Methods

Focus Group Interview

An interview of 6 to l0 people in an informal group setting. Focus groups are a major means of obtaining qualitative data.

Other qualitative methods often used in the hospitality industry include:

Lobby lizardOne-question questionnaireComment cardsManagers' luncheonAdvisory groupsCustomer consultants

Data Analysis & Preparation

There are a multitude of methods by which data may be analyzed so as to inform the marketing decisions of theorganization. In this section, just a few methods commonly used in marketing are highlighted.

Conjoint Analysis

Conjoint analysis measures guests' preferences, predicts guests' responses to new hospitality concepts or newattributes of current concepts. Conjoint analysis allows the hospitality firms to decompose guests' preferences forgoods and services into the "partworth" utilities associated with each option of each attribute of the concept.Hospitality firms can reconfigure these partworths to identify: (1) guests' preferences for any combination ofattribute options, (2) the most advantageous hospitality concept, and (3) market segments that place the highestvalue on a particular concept.

Conjoint analysis is often used to examine trade-offs: If the organization must choose between two attributes, whichwill bring the guest the most satisfaction or be perceived as offering the greatest value. Or, from a customerperspective, what is the customer willing to give up to get something else. Conjoint analysis can also be used todetermine what customers will be willing to pay and what drives their purchase decision.

To develop a conjoint analysis, you must first list and name the attributes under consideration. An attribute is anyfeature that can be built into a concept and can be used to describe the concept. For the hospitality industry, theseattributes might include price, segment, décor, amenities, or cuisine, as well as many others. Once the attributesare defined, then the levels must be selected. Each attribute must have at least two levels from which customerscan choose. For example, if the attribute is amenities, the levels may be pool, spa, gym, gift shop, and restaurants.The list of attributes and levels can be quite broad, as in this example, or far more refined by detail.

Once the attributes and levels are determined, the customers' responses for their preferences can be obtained.There are generally two methods for obtaining guest preferences:

Using the method, respondents allocate a total of 100 points among the different attributes,self-explicatedwith more points representing the most important attributes, and then rank the different levels for each


attribute in order of preference. For example, a respondent might distribute 30 points out of 100 to theattribute "amenities," indicating amenities are important and then assign ranks of 1 to pool, 2 to restaurant,etc.

In the method, respondents assign a score (for example, 0 to 100) to a product concept (or group ofratingsattributes), so that more points are indicative of stronger preferences. The ratings method is viewed as a moreinvolved and complex task, but also a more reliable method to extract respondents' preferences. The analysis usedfor responses can infer which attributes and levels drive customer purchase decisions.

Guest preferences (or preference partworths) can be used to identify market segments, which have similarlikes and dislikes and place similar values on attributes.

Conjoint simulation programs can be used in combination with other data to analyze one company's productsagainst those offered by competitors, determine the relationship between preferences and market share, or revealthe bundle of attributes that will yield the highest profit for the organization.

Laddering

Laddering is a one-on-one in-depth survey technique that answers the question "why is that important?" and searches fordeeper motivations, and ultimately uncovers the core personal values that drive purchase behavior. This method allowsconsumers to translate product attributes into meaningful personal associations by laddering linkages across attributes,consequences and values. Laddering is best used in industries, like hospitality, where the purchase of products andservices are seen as means that enable customers to fulfill important values or needs.

Laddering data is analyzed using content-analysis procedures and the creation of a tree diagram, known as a hierarchicalvalue map. The value of laddering is that it allows the hospitality firm to market its products and services based on theconsequences and values that the customers have identified as motivators behind their purchase decisions.

Customer Choice Model

The customer choice model or Logit model helps analyze and explain the choices individual customers make in a market.Using this data analysis method, the hospitality firm can understand the degree to which factors such as the price orlocation influence a customer's choice. More broadly, the individual guest purchase probability of a specific brand equatesto the brand's market share at the market level. Customer choice analysis allows companies to develop marketingcampaigns targeted toward specific market segments or individual customers.

Following the customer choice model, two methods of collecting data may be used:

The is used when customers face only one alternative, which requires basically a yes or nosingle alternativedecision.The method requires that customers select one answer from a variety of options, such asmultiple alternativesbrand X, brand Y, or brand Z.

When combined with demographic data on customers and competitor purchase information, the customer choice modelcan also identify relationships between certain demographics and the purchase decision, the effect of competitors'marketing campaigns on purchase of the firm's products or services, and the impact of the firm's marketing promotions onits own sales performance.


How Do I Capture and Store the Results of My Research?

All organizations need information about environmental forces and potential markets to aid in decision-making. A greatdeal of information, from both internal and external sources, is available to management. The challenge is in managing theinformation so it can be used effectively.

A Marketing Information System (or Marketing Intelligence System) (MkIS) is defined by the American MarketingAssociation as a set of procedures and methods for the regular, planned collection, analysis and presentation ofinformation for use in marketing decisions. The MkIS involves the continuous collection and analysis of marketinginformation into a central database. It may comprise information from internal reports (property management-systemreports, reservation data, guest history, etc.) and environmental scanning, such as competitor intelligence.

MkIS system:

Supports marketing personnelCan provide a fast and more complete information flow for management decision-makingAllows a wide variety of data to be collected and usedEnables management to continually monitor products, markets, and sales in detailImproves customer knowledge and market responsivenessBenefits small and medium-sized firms as well as large firms

Components of a MkIS include:

Data bank - raw data (e.g. historical sales data, secondary data)Statistical bank - programmes to carry-out sales forecasts, spending projectionsA model bank - marketing models (e.g. Boston Matrix)Display unit - Visual display unit and keyboard

Database Marketing

Database marketing is the creation of a large computerized file of customers' and potential customers' profiles andpurchase patterns. Databases are built through customer lists, coupon redemption records, guest registration, customerclubs, and intermediary information.

Database marketing:

Identifies the most and least profitable customers or marketsPinpoints segments or products needing special marketing supportEnables managers to evaluate opportunities for offering new products and servicesIncreases revenue through repackaging and repricing for various segments.

Relationship Marketing

Database marketing allows for relationship marketing. Relationship marketing is a means for attracting, developing, andretaining customer relationships to build strong customer loyalty. The relationship will be based on the buyer's trust andsatisfaction with the seller.

Relationship marketing can be practiced at three levels:

Financial


Includes pricing incentives such as frequent-flier programsInvolves low customization

Financial and socialAdds social bonds such as staying in touch with prospective and current customersInvolves a medium level of customization

Financial, social, and structuralAdds valued-added services that are not available from other firmsRequires a high level of customization.


TOPIC OVERVIEW

Researching Consumer Behavior

To research consumer behavior and investigate their needs is a process of collecting data and analyzing it. At a deeperlevel, it is the conscious process of taking a step back and trying to look at your organization as a customer experiencingyour services. But not all customers are the same. In this topic you investigate the myriad of different ways to approachand segment your customers. To begin your study of researching consumer behavior you examine the central case studyof this topic. This case study shows that if solid marketing research discovers an underserved segment of customers, or awhole new segment, it can be very profitable for companies that orient themselves to serve these customers.

After completing this topic, you should be able to

Discuss elements of consumer behavior relevant to the hospitality industryDiscuss the six stages of the buying-decision process as it applies to the hospitality industryDiscuss factors influencing consumer buying decisions in the hospitality industryDefine the term psychographicsDefine the term segmentation and its purpose as it applies to the hospitality industryDiscuss the basic criteria for segmentationDiscuss the advantages and limitations of market segmentation


Clothing-Optional Cruises

The exceptional success of any business usually has fundamental causes. Among these fundamental causes, the practiceof analyzing future trends and then modeling business to serve them can be especially profitable in the hospitalityindustry.

One recent trend has been the growth of clothing-optional travel, and the multitude of businesses that have come to servethis lucrative niche market is significant. The most successful part of this niche has been in the clothing-optional cruisemarket.

When looking at the list of successful clothing-optional travel organizations below, consider what factors might have beenexamined and what data might have been uncovered to support the viability of such an offering in the first place. Whatlessons can be learned from this niche market success that can be applied to your own business situation?

Bare Necessities, an Austin-based travel agency, has compiled a record of selling out more than two dozenconsecutive charter cruises since 1992.The American Association for Nude Recreation (AANR) has 50,000 members in 244 clubs spread across the USand Canada.Travel au Natural in Florida specializes in cruises aboard sailing vessels in the Caribbean for male-female couplesonly.No pockets Yacht charters allow groups to rent one of a small fleet of 50-70 foot private yachts.Castaways travel offers 33 different package options for the naturist traveler, from Hawaii bed-and-breakfasts tointernational tours.Shangri-La Ranch, a nudist campground located outside of Phoenix, is dramatically increasing the number of driveup RV spaces on its property.

When you approach the discussion forum at the end of this topic, consider these ideas:

How might the process of researching consumer behavior and future trends lead one to the idea of offeringclothing-optional cruises?How might a market researcher have identified clothing-optional cruises as a viable business opportunity?What factors might have been examined and what data might have been uncovered to support the viability of suchan offering?


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The Six Stages of the Buying Process

Click the topics below to learn more about the six stages of the buying process.

Transcript: The Six Stages of the Buying Process

From need recognition to post-purchase behavior, here you will find the six stages that a consumer experiences during abuying process.

1. Need recognition or problem awareness

The moment when a consumer realizes the need for a product.

Recognition of an unsatisfied need, or need (problem) recognition, creates tension or discomfort for theconsumer. This need may arise internally, such as feeling hungry or thirsty, or it may arise because ofexternal stimulation through such things as:

An ad for a product, orThe sight of the product itself

Needs may also be stimulated through dissatisfaction with a product the consumer is currently using.

Unsatisfied needs may cause conflict for the consumer.

The consumer has to decide how to allocate his/her resources of time and money betweencompeting needs.

If this conflict is not resolved, the buying process stops.

2. Choice of an involvement level

How important is satisfying this need to the consumer? High, medium, or low?

The consumer decides how much effort to exert to satisfy the need. The more effort exerted, the higher theinvolvement.

There are three levels of involvement:

: the type of problem solving involved when a need is completely new or veryHigh Involvementimportant to a consumer and much effort is taken to decide how to satisfy the need.

: when a consumer is willing to put a moderate amount of effort into decidingLimited Involvementthe best way to satisfy a need.

: when little time and effort is put into making the purchase because the purchasesLow Involvementdo not have high personal importance or relevance for the customer. These include frequentlypurchased, low-cost goods and services.

Involvement tends to be greater under any of the following conditions:

The consumer has no previous experience with the product or the consumer lacks information aboutthe purchase.The product is viewed as important or there is a high level of interest.The risk of making a bad decision is perceived as high.Circumstances may change a low-involvement situation to a high-involvement one.Social visibility of the product is high.

It is important to remember that involvement is consumer related and not product related. This means that alow-involvement product for one person may be a high-involvement product for another person.

Hospitality firms must respond at this stage of the consumer purchase process by recognizing theimportance of latent needs such as Check-in/Check-out and children's programs in hotels.

3. Identification of alternatives or information search


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What choices does a consumer have, how willing are they to look for more choices, what is the consideration set thatcomes out of their initial thinking?

Identification of alternatives includes both product and brand alternatives. This may be as simple as amemory scan (internal information search) or an extensive search (external information search).

The consumer must first identify which product categories might satisfy the experienced need. Forexample, a need for lodging may be satisfied by tents, youth hostels, hotels and campers.Then the consumer must choose which brands from the selected category to consider. Using theprevious example, the consumer chooses hotels and now must consider Radisson, Four Seasons,Holiday Inn, Ritz-Carlton, etc.

The search for alternatives will be influenced by:

How much information the consumer already has from past experiences and other sources. Thereare two sources of information:

The commercial environment, which includes all marketing, organizations, and individuals whoattempt to communicate with consumers. This includes:

Advertising: the most common type of information used in the commercial environmentDirect sales effort by salespeople and package information

The social environment, which includes family, friends, and acquaintances who provideinformation directly or indirectly about products.

Commonly communicated through word-of-mouth.Can include observation of others using products and exposure to products in thehomes of others.Can include the content written by product users and left on independent websites.

The consumer's confidence in the information already held.What the time and money costs would be to collect more information offset against the benefits ofcollecting additional knowledge.

The search for information yields an evoked set (also called a consideration set)-a limited group of productcategories or brands which buyers believe will satisfy their needs. If a particular product category or branddoes not appear in the consumers' evoked sets, the product or brand has no chance of being selected forpurchase.

4. Evaluation of alternatives

How does the consumer compare the items within their consideration set?

Evaluation of alternatives involves establishing criteria with which to evaluate each alternative before makinga decision.

Consumers often set minimum or maximum levels of an attribute (cutoff points) that determinewhether a product will be considered as a viable choice.Adding new brands to an evoked set affects the consumer evaluation of the existing brands in thatset.A wide variety of factors influence how a consumer evaluates the choices and how quickly he or shemakes a decision.User generated content on independent websites, such as Trip Advisor, have been found to have apowerful influence on consumer evaluations.An evaluation of alternatives may or may not result in a purchase.

5. Purchase decision

Influenced by mood, convenience, affordability, and a host of other items, consumers make their choices.

The purchase decisions are a series of related decisions consumers must make if they decide to make apurchase. These decisions may take a long time and include such things as:

Specific features of the productWhere and when to make the actual purchaseMethod of payment


Purchase decisions may also be influenced by the consumers' states and moods. For example:

If you are hungry, you may stop at a fast food restaurant you would not otherwise visit.When you are shopping during the holidays, you may be in a festive mood and spend more onpresents than you had originally intended.

6. Post-purchase behavior

Either falling into the categories of customer satisfaction or post-purchase dissonance, this is the piece of the experiencewhere the possibility of a repeat sale is also evaluated.

Post-purchase behavior can influence repeat sales and what the buyers tell others about the product.Marketers can improve their marketing mix through learning what the consumers know and how they feelafter the purchase. Such feelings generally fall into one of two categories: customer satisfaction andpost-purchase dissonance.

Customer satisfaction is based upon a comparison between the consumers' expectations beforeusing a product and their actual experience with the product.

A consumer is satisfied when the product experience equals or exceeds expectations.A consumer is dissatisfied when the experience falls short of expectations. This feeling alsoleads to post-purchase dissonance.Marketers can influence consumers' expectations through advertising claims and salespresentations.


Factors Influencing the Buying Process

Successfully creating a buying opportunity requires a clear understanding of the customer and their motivating factors. Notevery element listed here will play a part in every buying decision, but a combination of them determines the result of thebuying process.

Transcript: Factors Influencing the Buying Process

In this presentation, learn about several factors that influence the buying process.

Social/Interpersonal

The external social forces around us affect our individual buying decisions.

These forces include:

Cultural influencesReference groupsThe family and householdClass influencesSocial networks

For more information, see the resource page title "More About Factors Influencing the Buying Process."

Psychological

Individual psychological factors that influence consumer buying decisions include:

MotivationPerceptionLearningValues, beliefs, and attitudesPersonalitySelf-conceptLifestyle

For more information, see the resource page title "More About Factors Influencing the Buying Process."

Situational

Consumption Situation

Consumer needs and brand preferences are likely to vary depending on the consumption situation. For example, aconsumer might prefer a decaffeinated coffee before going to sleep, but regular coffee in the morning.

Purchase Situation

Consumer needs and preferences are also likely to vary depending on the purchase situation. For example, aconsumer might prefer a particular type of wine to give someone as a gift, but another type for home consumption.

Time Dimension

Purchase decisions are also influenced by when a consumer is most likely to purchase a particular product. Forexample, a consumer might find a beer enjoyable after an afternoon of golfing, but likely would not considerconsuming a beer prior to meeting for a 7:00 a.m. tee time.

Physical and Social Surroundings

Consumer's purchase preferences also are likely to change depending on his or her physical and socialsurroundings. For example, a consumer may spend rather freely on t-shirts and refreshments at a sold-out rockconcert, but refuse to linger in a bar where he or she is the only patron.


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More about Social/Interpersonal and Psychological Factors Influencing Buying Behavior

You learned from Factors Influencing the Buying Process that individual buying decisions are affected by the social forcesaround us. These factors can include cultural influences, reference groups, family and household, class influences, andsocial networks. Click the topics below to learn more about the influences that can affect buying behavior.

Transcript: More about Social/Interpersonal and Psychological Factors Influencing BuyingBehavior

Cultural influences

Cultural influences include the values, beliefs, preferences, and tastes created by a given society and handed down fromgeneration to generation.

The culture may influence how needs are satisfied. For example, in some cultures, the consumption of certaininsects is a normal means of satisfying hunger, but this would not be an acceptable method of satiation in othercultures.Subcultures are groups that exhibit characteristic behavior patterns sufficient to distinguish them from other groupswithin the same culture. A subculture is important if specific purchasing patterns can be traced to it.

Reference groups

Consumers may use products to establish identity with a group or to gain membership into it. Consumers are more likelyto be influenced by word-of-mouth information from reference group members than by advertising or salespeople.

The family and household

The family is the most important social institution for many consumers, strongly influencing the values, attitudes,self-concept, and socialization process of its members. Knowing which family member is likely to make the purchasedecision will influence a firm's marketing mix.

Marketers are also interested in considering the buying behavior of the household as a unit:

Who influences the buying decision?Who makes the buying decision?Who makes the actual purchase?Who uses the product?

Class influences

Buying behavior is often strongly influenced by social and/or economic classes. Marketers use a classification scheme tohelp them categorize class influences. One such scheme in the United States identifies the following five classes, withineach of which are opinion leaders who serve as information resources:

Upper class2% of total populationSocially prominent old families and the newly richLive in large homes in exclusive neighborhoodsBuy expensive products, patronize fancy shops

Upper-middle class11% of the total populationSuccessful business and professional peopleWell-educated, have a strong desire for success, and push their children to do wellBuy products that signify status, belong to private clubs, and support the arts and various social causes

Lower-middle class36% of the populationStrive for respectability, are future oriented, and are willing to take risksHave well-cared-for homes, save money to send their children to college, and buy products that are popular

Upper-lower class38% of the populationClerical and blue-collar working class


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Tied closely to family for support, have a local orientation, clearly defined male-female roles, and areconcerned about securityLive in smaller homes, drive larger cars, watch bigger television sets, and buy American products

Lower-lower class13% of the populationUnskilled workers, the chronically unemployed, unassimilated immigrants, and people on welfarePoorly educated, live in substandard housing, have low income

Social networks

Social networks are made of individuals which are linked by friendship, relationships, or common interests. Today, thesenetworks may be Internet-based and include individuals that the consumer has never met in person.

Psychological factors

Psychological factors that influence consumer buying decisions include:

: the result of a need sufficiently stimulated so that an individual is moved to seek satisfaction.Motivation: a process of coloring and processing information from the environment through our five senses.Perception

Perception plays a major role in the stage of the buying-decision process that involves identifying alternatives. Thenature of perception requires marketers to keep their messages simple, repeat them often, and conduct research tosee if the messages have been received and interpreted as intended.

: changes in behavior resulting from previous experiences. Learning plays a part in every stage of theLearningbuying process. Marketers use several strategies designed to fit the way people learn, including:

Repetition, in which marketing messages are spread over timeFamily branding-an example of stimulus generalization in which different products are offered under thesame brand name (Courtyard by Marriott, Residence Inn by Marriott, Marriott Marquis, etc.)

Values, beliefs, and attitudes

Values are enduring beliefs that a specific mode of conduct is personally or socially preferable to another mode ofconduct. Customers with similar value systems tend to react alike to prices and other marketing-relatedinducements.Beliefs are organized patterns of knowledge that an individual holds as true about his or her world. Consumers tendto develop a set of beliefs about a product's attributes and then, through these beliefs, form a brand image-a set ofbeliefs about a particular brand.Attitudes are learned predispositions to respond to an object or class of objects in a consistently favorable orunfavorable way. Attitudes do not always predict purchase behavior, but they play a major role in the evaluation ofalternatives.Personality is a way of organizing and grouping the consistencies of an individual's reactions to situations.Self-concept is how a consumer perceives himself or herself in terms of attitudes, perceptions, beliefs, andself-evaluations. For example, a consumer who perceives himself as extremely religious may make purchasedecisions based on this perceived religiousness.Lifestyle is a person's mode of living as identified by activities, interests, and opinions. Psychographics is theanalysis technique used to examine consumer lifestyles and to categorize consumers.Psychographics have proved valuable in segmenting and targeting consumers.


Types of Hospitality Consumers

There are two main categories of hospitality consumers, the business traveler and the leisure traveler, but neithercategory is really homogeneous. Instead each main category is comprised of many stratifications. Among businesstravelers, there may be senior executives, middle managers, and front-line employees, such as salespeople. Amongleisure travelers there is a further division into pleasure travelers, those taking advantage of package deals, maturetravelers, international travelers, and free independent travelers. These categories can overlap, and different categoriesrequire different marketing strategies to serve them effectively.

Transcript: Types of Hospitality Consumers

This presentation reviews categories of business and leisure travelers, an important factor in creating a best-fit marketingstrategy.

Types of Hospitality Consumers

There are two main types of hospitality consumers: business travelers and leisure travelers. Hospitality companies need tounderstand these separate groups to analyze whether a high percentage of their customers fit into one or the other of theprofiles. Understanding these groups help companies meet these groups' needs more effectively, or reach out to newones. The most important lesson is "Know thy customer."

A Profile of Business Travelers

Without the constant and steady income from the business travel market, hotels, airlines, and car rental companies wouldhave difficulty effectively utilizing their inventory. For many segments of the hospitality industry, this is their bread andbutter, and serving their needs effectively is vital.

In general the business traveler:

Wants "an office away from the office"Is looking for enhanced productivity from both the trip and the time spent on the tripThinks technology like telecommuting, web conferencing, online meetings, and videoconferencing will reducebusiness travel in the futurePrefers full-service hotels, airlines, and car rental companies with moderate pricesTries to negotiate best rates.

Business Traveler Preferences

Business travelers have also shown several factors that influence their buying habits:

They tend to prefer hotels and airlines that suggest a high degree of prestige.They are more likely to avoid bargain-basement lodging and low cost carriers when they can.They like well-known brand names.

And their previous experience with the hospitality product is also important, including the elements of

LocationReputationRecommendations of friends/associatesPrice.

Befitting their status, senior executives will generally expect to stay in luxury or upscale hotels with high levels of service,as well as utilize first-class airline service and other high-end hospitality services, while traveling. On the other hand,salespeople may stay in mid-scale or even budget hotels and utilize low-cost carriers.

Leisure Travelers

Whereas business travelers often make up the bulk of a hotel's midweek business, leisure and tourist travelers fill therooms on weekends. Leisure travelers come in four types but there may be some overlap among these groups:

Package travelersMature travelers


International travelersFree independent travelers

Package Market

Package consumers purchase a combination of rooms and amenities for an inclusive price.

The advantages of packages include:

Low priceThe bundling of services that are not normally purchased, such as guided itinerariesThe fact that everything is pre-planned and pre-arranged

Mature Travelers

Usually over 55 years of age, mature travelers are a force simply because of the sheer numbers of them on the road.They tend to travel extensively, sometimes favoring travel parties or tours. Unlike other classifications, the mature traveleris not a homogeneous group. And finally, they are a group of consumers looking for value in their purchases.

International Travelers

400 million people travel outside their home country every year, and international travelers account for 25% of the annualtourist spending in the U.S. As a group they tend to use intermediaries in their planning, such as consortiums, referralnetworks, and tour operators.

Free Independent Travelers

Free independent travelers are best characterized as younger travelers or those with more travel experience, who do theirown planning and make up their own itineraries.

It is important to understand that these categories can overlap, and that different cross sections of people and groupsrequire different marketing strategies to serve them effectively.


Market Segmentation

Market segmentation is a process that clusters together people with similar needs into a marketsegment. Market segmentation enables the marketer to tailor marketing mixes to meet theneeds of one or more specific segments.

Segmentation involves dissecting the universe of potential customers in order to focus onthose with the greatest probability of purchasing.Marketing segmentation is consistent with the marketing concept because theorganization identifies the needs of the customers within the segment and then designs amarketing mix to satisfy them.

Basic Criteria for Segmentation:

Identifiable and measurableSimilarity in customer needsSegment has unmet needsSize of the segment - Segment must be big enough to justify the additional cost of aseparate marketing mix; otherwise, the segment should be grouped with anothersegmentThe potential for growthAccessibility of segments - Able to reach the targeted group to the exclusion of othersegments.

Advantages:

There are several clear advantages to market segmentation.

It can create more revenues than a mass marketing strategy by addressing consumers' different needs. TheMarriott Resort in Bangkok shifted from targeting 16 customer segments to just four segments and improvedrevenues. It provides better organizational focus because the firm is no longer trying to be all things to allcustomers.It promotes new ideas centered on the customer segment. The Pierre Hotel in New York City developed asegmentation strategy targeting the fashion and entertainment industry and tripled its Gross Operating Profit(GOP).It helps to develop an effective marketing mix - product, price, promotions, and place geared to a particular set ofcustomers.

It helps guide the allocation of marketing resources to different products.

Limitations of Market Segmentation

Because market segmentation leads to product segmentation, production costs are higher because it costs more toproduce different models for each segment rather than producing mass quantities of the same model. However, thelarge hospitality management companies, such as Marriott and Starwood, have been successful in creating manydifferent hospitality products for numerous customer segments.The marketing expenses are higher due to increased inventory, advertising, and administrative costs.

Leisure vs. Business

A company can segment the market in many different ways, but the first division is normally between Business andLeisure consumers:

Leisure consumers are buying for their own personal and household use.Business users are usually buying products or services for their organizations.

The five bases or key criteria for segmenting the consumer market - geographic, demographic, psychographic,product-related, and operational are beyond the scope of this course. They will be discussed in detail in the course Market

.Planning In The Hospitality Industry


Ask the Industry Expert: Implementing Market Segmentation Strategies

:About our Expert

Mark Sherwin is General Manager for The Ritz-Carlton, Tysons Corner. Mr. Sherwin comesfrom the corporate headquarters of The Ritz-Carlton Hotel Company, where he has served asregional vice president of sales and marketing for the Northeast and Midwest region. Prior tojoining Ritz-Carlton, Mr. Sherwin was Area General Manager for the Midtown Atlanta Suitesfrom 1994 - 1996, and Southeast Regional Manager for Residence Inn from 1990 - 1994.

Mr. Sherwin is a 1980 graduate of Cornell University's School of Hotel Administration, andreceived an MBA in 1994 from the Georgia State University School of Business. He has been aguest lecturer for the School of Hotel Administration at Cornell since 1998.

Transcript: Ask the Industry Expert: Implementing Market SegmentationStrategies

Why is market segmentation important?

Ultimately, market segmentation allows you to differentiate your markets, because one can't beall things to all people. It allows you to focus your sales and marketing efforts on thosecustomers, or those customer segments, that are uniquely most likely to buy your product oryour service. Also, from a financial perspective, it allows you to optimize your return oninvestment, because we are all very focused on return on investment. You want to spend the most appropriate marketingdollars against the most appropriate customer. Ultimately, the best segmentation matches the right product, with the rightcustomer, at the right price point. And then finally, it allows you to capitalize on diverse market needs. You certainly don'twant to put all your eggs in one basket, and most times, one segment for either a lodging or a hospitality business is notsufficient to optimize revenues and profits, therefore, you have to segment your market.

How should you choose the criteria that are important for successful market segmentation?

By focusing on the individual needs of a customer, you will focus on the criteria that are most important to that particularcustomer segment. You have to understand the value proposition of your product and service based on the needs of thecustomer. That value proposition, in many ways, is based on the demographics of individual market segments. Is it aspecific industry type that you are interested in, a specific psychographic of an individual, or particular demographicsbased on geography, median income, or other specific criteria? You also want to focus on low-cost items that have thehighest impact to optimize your return on investment. So, ultimately, the criteria is going to help you capitalize on thosecustomer segments that have the greatest need for your product and service, and also yield the greatest value from thestrengths that you offer a particular market.

How do you decide which segment should be selected?

Sometimes, the segments that you are going to focus on have actually been pre-selected for you based on thepurpose-built nature of your particular product. For example, with the Ritz-Carlton Hotel Company, we're currently buildingtwo luxury hotels in the market of New York, each specifically designed to serve a different segment. The Ritz-Carlton onCentral Park South will be focusing on high-end European and boutique-style travelers, whereas the Ritz-Carlton inBattery Park in downtown Manhattan will be focused on the Financial District business traveler and small meetings andconventions.

Ultimately, when deciding which segment you should be selecting, you should be focusing on where your history ofsuccess has brought you the greatest return on investment, where you have made previous investments with customerswho are both familiar and have a need for your product and service, and then ultimately, determine which segment isgoing to bring you the greatest return on investment, and from that particular investment, which sub-segments will alsobring you additional revenues and profits. For example, if you were planning on focusing on the group or meetingssegment, then you should understand which sub-segment, which in the meetings world, will bring you the greatest yield. Isit the association groups, is it the corporate groups, or is it the individual, local, small, social meetings that happen in theindividual neighborhoods?

How should you use segment-of-one marketing?

Segment-of-one marketing is very, very powerful due to the unique buying habits and needs of individual guests. In fact,


there is no need for segmentation if all people have all the exact same needs. So, the segment-of-one marketing allowsyou to tailor your message, ultimately, to the specific requirements of an individual or group of individuals. It also allowsyou to tailor the relevancy and frequency of your messaging based on those unique customer needs. It in turn allows youto mass customize, whether it is on-going communications, whether it is the product and service you are delivering togroups of customers, or ultimately, it is the way in which you communicate that message.


1. 2.

3. 4.

5. 6.

Three Examples of Word-of-Mouth Strategies

Your social environment frequently provides information about products to youthrough word-of-mouth. In conversations with family, friends, and acquaintances,you share opinions about companies, services, and experiences with purchases.

Companies sometimes use word-of-mouth strategies as well as conventionalmarketing to get their message to potential customers. On the Internet, theseword-of-mouth strategies are known as viral marketing. Viral marketing is astrategy that encourages individuals to forward a message to others. If such acampaign catches on, the message could be sent to thousands or millions ofpeople. Recall the success of the campaign.Queensland Best Job in the World

In his article, "The Six Simple Principles of Viral Marketing," published on Web in February 2005, Dr. Ralph F. Wilson notes that a successfulMarketing Today

viral marketing campaign will contain the following elements:

Gives away products or services - Nothing attracts attention like "FREE."Provides for effortless transfer to others - Keep the marketing message short and simple so that it can be readilytransmitted to others without degradation.Scales easily from small to very large - Be prepared to rapidly add mailservers as the virus spreads.Exploits common motivations and behaviors - Provide a motivation for individuals to forward your message toothers.Utilizes existing communication networks - Position your message into existing communications between people.Takes advantage of others' resources - Create an inventive message that will be picked up on others websites,blogs, podcasts, news articles, etc.

Remember, though, that no word-of-mouth campaign is guaranteed to be successful. The public will decide!

Try to brainstorm and write down three examples of effective word-of-mouth strategies you have seen. For each strategyyou have seen, also note:

The situation in which you heard itWhat market segment you believe was being targetedWhy you believe it was effective

Think about your answers carefully, because you will be using the results of your brainstorm in the discussion forum.

http://www.prlog.org/10517496-tourism-queenslands-best-job-in-the-world-wins-best-worldwide-pr-campaign-of-the-year-at-hsmai.html

http://www.wilsonweb.com/wmt5/viral-principles.htm

http://www.wilsonweb.com/wmt5/viral-principles.htm


TOPIC OVERVIEW

1. 2. 3. 4. 5. 6. 7.

Environmental Analysis

Environmental scanning is the process by which companies collect information on the environment and analyze it. Thepurpose of this process is to provide a base of objective information, to identify emerging trends, and to help the companycompete by identifying potential opportunities. Environmental scanning also helps a company to shield itself from threats,and to change emerging threats into opportunities. The environmental scanning process has the following seven goals:

Keep a tab on broad trends appearing in the environmentDetermine the relevance of an environmental trendStudy the impact of an environmental trend on a product/marketForecast the direction of an environmental trend into the futureAnalyze the momentum of the product/market business in the face of the environmental trendStudy the new opportunities that an environmental trend appears to provideRelate the outcome of an environmental trend to corporate strategy

(Source: Jain, Subhash C. (2000), Marketing Planning & Strategy, 6th Edition. Cincinnati, OH: South-Western CollegePublishing.)

In this topic you will combine environmental scanning with the concepts you have previously learned. Together, this skillset is what you need to work on the Environmental Analysis presented in the central case study. In the resources of thistopic you can also find more information about the specifics of conducting an environmental analysis.


Define environmental scanningDiscuss the seven interrelated environmental forces that organizations must contend withDefine the term competitive advantage


Opening a Boutique Hotel

A residential property centrally located in a fictional college town is being sold at auction. One of the bidders hasexpressed an interest in converting the property (an old house) into a boutique hotel. They have hired you to determinethe environmental feasibility of this business idea.

In the first part of the simulation, you will classify individual data and statistics according to the factor in the environmentalanalysis to which it applies. In the second part you will then be presented with a series of seven screens. Each screencorresponds with one of the seven factors to be considered in an environmental analysis. These screens will display theaggregated data and statistics from the choices you have made. Then you will make a final judgment regarding the overallviability of the proposed project.

Your analysis here is the basis for this topic's discussion. You may want to open the final window containing your resultsand the discussion window at the same time, to do so.click here


Factors Involved in an Environmental Analysis

What you will see in this presentation looks like an experiment in a chemistry lab. The business venture being tested isrepresented by a culture in a petri dish. The seven interrelated environmental forces are represented by seven labeled testtubes. When you click on each of the test tubes a bit of the idea is added to the solution, the test tube shakes a bit, andpop-up text will describe to you the nature of the particular analysissociocultural, demographic, economic, technological,political & legal, competitive, and ecologicaland the type of information it is likely to produce. These results are siphonedoff into a receptacle labeled competitive advantage.

This metaphor accurately describes how the various factors of an Environmental Analysis all work together. The balanceof how each of these factors works together is different for each business situation, but combinations of these elementsare always present.

Transcript: Factors Involved in an Environmental Analysis

Just like scientists in a laboratory, market researchers use an environment analysis to evaluate key environmental trendsand to identify a potential competitive advantage in connection with a business venture. In our laboratory metaphor, thebusiness venture serves as the catalyst for the analytical process, the result of which is the competitive advantage.

Sociocultural environment

The relationship between marketing and society and its culture. This relationship includes the values and lifestyles of apopulation, while at the same time affecting how and why people live and behave as they do. Examples of socioculturaltrends include:

Americans are interested in eating low-fat foods yet indulging in sweets.Many Americans are more health-conscious, seeking an improved diet, opportunities to exercise.Nonsmokers have become more aggressive in demanding smoke-free environments.Devices that save time and tools to aid in relaxation and sleep have increased in popularity because of a poverty oftime.Americans increasingly dine out and desire ethnic foods.

Demographic environment

The examination of the human population. Marketers often use the RAGE matrix (Race/ethnicity, Age, Gender, andEducation) as basis for demographic analysis. Other factors include:

IncomePopulation sizeGeographical dispersionOccupationReligionSexual orientation

Demographics are often key variables for determining market segments and their related strategies.

Economic Environment

The conditions that will affect the amount of money that the people in a market have as well as their willingness to spendit. The primary economic factors are:

The Business Cycle

Consists of four stages: prosperity, recession, depression, and recoveryDuring prosperity, businesses tend to expand and marketers benefit by introducing luxury, high-priced products thattarget consumers with rising discretionary income.During recessions, businesses tend to retrench and marketers focus on developing "value" products that providestandard utility at lower prices. In a recession, dining out, entertainment, and travel are the first things consumerscut from their budgets.During depressions, businesses reduce staffing and cut all expenses. Many businesses may close, at leasttemporarily. The goal is to remain viable until the economy improves.


During recovery, the challenge is to determine when prosperity will return and at what level.

Inflation

A rise in price levels. If prices rise faster than personal income, consumer buying power declines.Inflation causes consumers to be less brand loyal, search for the lowest price, seek promotions, use coupons, andstock up on sale items.

Interest rates

When interest rates are high, consumers and businesses tend to hold back on purchases-especially those thatrequire long-term payments, such as buildings, homes, and cars.High interest rates discourage the development of new hospitality products, new additions or even costlyrenovations.

Unemployment

A situation in which people who do not have jobs are actively looking for work.When unemployment is especially low, service firms may have difficulty finding employees for their lower payingpositions.

Income

Personal income influences consumer buying power.

Technological Environment

The application to marketing of knowledge based on discoveries in science, inventions, and innovations, can be put intoone of five classifications:

EnergyMaterialsTransportationCommunications and informationGenetic

Major technological breakthroughs-such as the Internet and nano-tecnology-can impact the economy in two ways:

Start entirely new industriesRadically alter existing industries

For example, technology is revolutionizing the hospitality industry:

Computerized restaurant orderingAutomated check-in/check-outWeb-based reservation systemsFaxesEmailGuest rooms set up for computers/modems/Wi-Fi and touch-screensUse of avatars to replace employees in redundant tasks

Technology has a tremendous impact on life-styles, consumption patterns, and the economy. For example, the ability oftoday's business person to simultaneously and instantaneously transmit and share voice, pictures, and graphics all overthe world should reduce business travel as such technology becomes more common place.

Technology also has the potential to increase output and capital. Managers can forecast trends in the technologicalenvironment by constantly screening patent applications related to the industry.

Political and Legal Environment

Environment, legal and regulatory trends affect marketing opportunities because they define the governmental constraintsto which companies are subject. There are six general categories of their influence:

1. General monetary and fiscal policies affecting government spending, the money supply, and tax legislation


For example, tax laws may affect how much a business may deduct for business entertainment and meals,and this legislation, in turn, can negatively affect upscale restaurant businesses.

2. Social legislation and policies, such as civil rights laws, unemployment laws, and antipollution laws

For example, the American Disability Act had a big influence on how hotel rooms are being designed.

3. Government relationships with individual industries

These relationships can manifest themselves in the form of subsidies, tariffs, import quotas, andderegulation of industries. In turn, this type of legislation can affect the cost of goods and services neededfor hospitality operations.

4. Specific legislation that affects marketing

Such laws fall into two main groups: those designed to regulate and maintain competition, and thoseintended to protect the consumer. The three regulatory agencies most directly involved in marketing include:

The Consumer Product Safety Commission, which mandates safety standards for products. It canban products, recall them, fine firms, and sentence company officers to prison.The Federal Trade Commission, which prohibits unfair methods of competitionThe Food and Drug Administration, which enforces regulations concerning food and drug products. Inrecent years, hospitality businesses have paid close attention to policies created by the U.S.Department of Labor, as well as legislation proposed by the House Committee on Energy andCommerce and the Senate Committee on Energy and Natural Resources, because of their impact onthe industry as a whole.

5. Provision of information and purchaser of products

The government is the largest supplier of secondary marketing information, as well as being the largestsingle buyer of products. Through government documents and statistical abstracts, marketers can obtainmuch of the data they need to determine the appropriate market segmentation strategies. For example,census data can be a great source for predicting consumer trends. At the same time, the government is amajor purchaser of hospitality products, especially room nights. For this reason, many hotel chains offerspecial government rates.

6. Political trends in foreign countries

In today's global economy, the political activities occurring in foreign countries have a significant effect onthe US economy and US businesses, including the hospitality industry. For example:

An increase in terrorism, regardless of where, has an effect on travelers, especially leisure travelers.War in the Middle East jeopardizes oil supplies and increases energy costs.

Competitive Environment

Comprises the number, types, and behavior of competitors the marketing manager must face. The competitiveenvironment operates along a continuum ranging from pure competition to monopoly. A manager must identify theposition along this continuum in which his business operates in order to develop appropriate competitive strategies.

Key points along the continuum are:

:Pure Competition

A market situation that develops when a market has:

Relatively homogeneous productsMany buyers and sellers who have full knowledge of the marketEase of entry for buyers and sellers

In this market, demand is flat for each individual producer, so all producers must set their price at theequilibrium price in order to sell any product. An individual producer has little or no impact on the market.


:Oligopoly

A small number of firms dominate the market. Develops when a market has:

Essentially homogeneous productsRelatively few sellersFairly inelastic industry demand curvesDifficulty of entry for sellers

In an oligopolistic situation, competitors follow each other in their marketing strategies, including price.

:Monopolistic competition

A large number of suppliers offer similar products. Develops when:

A market has many buyers and sellersEach firm has a comparatively small percentage of the total marketThe sellers offer different products at a range of prices based on quality, attributes, or serviceSellers use marketing strategies such as branding, advertising, promotions, and personal selling toconvey product differences to buyersBuyers recognize differences in products and are willing to pay different prices

The majority of the hospitality industry operates under conditions of monopolistic competition.

:Monopoly

A market situation in which one firm dominates and controls the total market.

Marketers should be aware of three major sources of competition:

Brand competition: from marketers of directly similar products.Substitute competition: from marketers of products that are not directly the same but do satisfy thesame needsGeneral competition: from marketers of all products competing for the customers' limited buyingpower

Ecological Environment

Marketers must evaluate the impact of their product on quality of life. This evaluation must include: consideration ofemployment in their target community; the effects of air, water, and cultural pollution; and the potential depletion of naturalresources. Organizations may implement programs designed to minimize or even enhance the ecological impact of theirbusiness. For example:

Six Senses requires all its properties to follow stringent sustainable environmental guidelines, including waterconservation, recycling, utilization of low energy lighting, and protection of local cultures.The Heritance Kandalama Hotel in Sri Lanka is famous for its rigorous practice of the 7Rs (regulate, reduce, reuse,recycle, recover, renovate, rethink), which has resulted in no waste.


Conducting an Environmental Analysis

Initial market research may give rise to an idea for a new business venture, such as the one tested in the central casestudy of this topic. The environmental analysis is designed to test the viability of the business venture. Click the areas ofresearch below to learn more about the questions to ask in an environmental analysis.

When traveling in unfamiliar terrain, having the right map in hand makes reaching your destination much more likely. For abusiness, conducting a marketing environmental analysis of the current landscape is constructing the map of where it is.This map will then help it navigate toward business goals.

UPDATE magazine: http://www.hospitalityupgrade.com/

American Demographics (now part of ): Advertising Age http://adage.com/

U.S. Census: http://www.census.gov

Yahoo travel: http://travel.yahoo.com/

Transcript: Conducting an Environmental Analysis

When constructing an environmental analysis, marketers should consider the following elements.

Sociocultural

How is the consumer's orientation towards time changing?What are the standards for quality? Are they changing?How important are health concerns becoming? Will this be changing?What are the trends toward home-centeredness?What are the personal finance trends that are occurring?What are the trends in lifestyle diversity? Social diversity?What are travel trends? Who is traveling?

Demographic

What demographic groups are on the rise domestically? Internationally?What is the population growth rate domestically? In key foreign markets?What key subcultures are emerging?What are the religious trends domestically? In key foreign markets?What are the occupational trends domestically? In key foreign markets?What are the educational trends domestically? In key foreign markets?What are the trends in income domestically? In key foreign markets? Is real growth in income occurring?

Economic

What fiscal and monetary measures are being developed domestically? Internationally?What regulation and management of the economy is being used domestically? Internationally?In what stage of the business cycle (prosperity, recession, depression, recovery) is your domestic country? In whatstage are other key powers?What is happening with world food production?Is real world growth rising, stable, or declining?What is the inflation rate domestically? Internationally?What are the prevailing views about free trade?What are the key economic indicators, such as employment, consumer price index, housing starts, auto sales,weekly unemployment claims, GNP, savings rate, money supply, and retail sales?

Technological

What new technologies are available in the areas of energy, materials, transportation, communications andtransportation, and genetic (affecting food sources)? How important are these technologies to the hospitalityindustry now? Five years from now?

http://www.hospitalityupgrade.com/

http://adage.com/

http://www.census.gov/

http://travel.yahoo.com/


What impact will these technological advances have on the hospitality industry?What technological advances will create a competitive advantage? Which technologies should be adopted now, which are still emerging?Which technologies are becoming obsolete?What technologies are already common among your competitors?

Political / Legal

How stable is your domestic government? What are the chances of revolution?What are the economic interests of the domestic government?How dependent is your government on foreign capital?What world conflict exists, or is likely to occur? How will it impact your business? What are the political trends elsewhere?What are the chances of political terrorism in your domestic country? What political terrorism in other countries mayaffect your business?What nations are gaining political power?What revolutionary changes are occurring in other parts of the world?What government regulations are on the horizon that may affect taxation, employment benefits, minimum wage,labor laws, handicap accessibility, etc.? What are the political trends in these areas for the next five years?

Competitive

Who is the competition? Now? Five years from now?What are the strategies, objectives and goals of each major competitor?How important is a specific market to each competitor and what is the level of its commitment?What are the relative strengths and limitations of each competitor?What weaknesses make competitors vulnerable?What changes are competitors likely to make in their future strategies?What will be the effects of all competitors' strategies, on the industry, the market, and our strategy?

Source: Jain, Subhash C. (2000), Marketing Planning & Strategy, 6th Edition. Cincinnati, OH: South-Western CollegePublishing, p. 84-85.

Ecological

What are the trends toward environmentalism domestically? In key markets?How is ecological awareness determining purchasing behavior?What ecological changes are affecting hospitality?What ecological pressures on business exist from society? From the government? How are these changing?

Environmental Analysis Resources

The Internet is an excellent source of information on trends. Further research can also be found in publications, including:

for latest technology informationUPDATE magazine for demographic and socio-cultural trendsAmerican Demographics

for demographic and economic information-can be broken down by city or regionU.S. Census data for competitive informationwww.yahoo.com/travel

When traveling in unfamiliar terrain, having the right map in hand makes reaching your destination much more likely. For abusiness, conducting a marketing environmental analysis of the current landscape is constructing the map of where it is.This map will then help it navigate toward business goals.

http://www.updateplus.com/

http://www.demographics.com/

http://www.census.gov/

http://travel.yahoo.com/


TOPIC OVERVIEW

Using the SWOT Model to Analyze Data

A SWOT analysis is the process of listing as many items as possible that impact a business, and categorizing them interms of these divisions:

trengthsSeaknessesWpportunitiesOhreatsT

Strengths and weaknesses are measures of internal factors, whereas opportunities and threats usually are external itemsoutside of a company's direct control. Carrying out an analysis using the SWOT method helps you to focus on areaswhere your business is strong, and also helps you to identify future areas of concern. Environmental scanning, as definedin topic three, helps to identify external opportunities and threats, and fits into the SWOT framework well. A SWOTanalysis is simple in principle, yet it helps to define and isolate key issues, as well as to promote clear strategic planning.


Define the term SWOT AnalysisEvaluate opportunities for SWOTExplain what is meant by breakthrough opportunities


InterContinental Hotel SWOT Analysis

The SWOT analysis is a tried and true method to approach business analysis. In this activity you will be presented with aset of fictional data related to the earlier InterContinental Hotel (ICH) case study. You will then conduct a SWOT analysisof the data, identifying three or four strengths, weaknesses, opportunities, and threats, and placing them in the appropriatequadrant on an online SWOT chart. You will be able to drag-and-drop items to where you think they should belong. Toprint the results of your work, right-click the presentation and select "print". This printout will be useful as you share theresults of this exercise in the discussion. Alternatively you may want to open both the presentation window and thediscussion window at the same time, to do so.click here


Ask the Expert: Using the SWOT Model to Analyze Data

Listen as Professor Siguaw describes one of the best uses for the SWOT model.

Transcript: Ask the Expert: Using the SWOT Model to Analyze Data

How does SWOT fit into the overall marketing process?

SWOT stands for strengths, weaknesses, opportunities, and threats. The strengths and weaknesses categories are basedon internal issues, while opportunities and threats are based on external issues.

SWOT analysis is really a decision-making tool. Once you understand the external environment from your environmentalanalysis, you can combine any identified significant external opportunities or threats with an internal survey of yourorganization's significant strengths and weaknesses. Thus, SWOT provides a framework identifying and highlightingissues that are critical in determining decisions made about your organization.

What do I do with it?

The goal of the SWOT analysis is to isolate the most crucial issues and to facilitate the development of your marketingstrategy. Therefore, you will want to keep the items you list under each SWOT category as simple and as concise aspossible, although a great deal of research may underlie each item. The SWOT analysis will allow you to get an overallview of the situation and to respond proactively.

In identifying your organization's strengths and weaknesses, try just quickly jotting down the characteristics of your firm.Then ask yourself: What distinctive competencies does your organization possess? Are there adequate financialresources? Does your organization possess cost advantages or competitive advantages? Is the management teameffective? Is the organization innovative? Is there a clear strategic direction? Is there strong profitability? Good trackrecord in implementing strategies? Is there a strong market image or strong marketing skills? Do you have strongoperational skills or solid financial capitalization?

In identifying opportunities, use the environmental analysis to determine what isn't being done to meet customer needs.Ask yourself if there are additional customer groups you should be serving, or additional services you should be offering?Is the market growing rapidly? Are competitors weak? In terms of threats, use the environmental analysis to identify trendsthat might make your product or service obsolete. Also ask yourself: Are new competitors likely to enter the market? Areadverse regulatory policies on the horizon? Is the organization too dependent on one customer? Is the organizationvulnerable to recession? Are current customers' tastes and needs changing? Are there adverse demographic changesoccurring?

What are some examples of typical strengths and weaknesses in the hospitality industry?

Strengths are the competitive advantages and unique selling propositions that the company has the ability to bring to themarket place. Possible strengths in the hospitality industry include:

Low-cost, high-efficiency operating skillLeadership in product and service innovationEfficiency in customer servicePersonal relationships with customersEffectiveness in sales promotionConvenient, desirable location

You may be able to identify many more strengths within your organization.

Weaknesses are factors that limit the ability of the firm to pursue new opportunities or achieve new competitiveadvantages. Examples of potential weaknesses in the hospitality industry include:

Inadequate understanding of target marketAmbiguous service policiesLack of quantitative goalsPoor product designLack of product/brand awarenessLaggard in technology integration


Of course, there are many others in addition to these.

How do I evaluate the results?

To evaluate the results of the SWOT analysis consider Sources of Marketing Opportunity. There are three sources ofmarketing opportunity: unmet customer needs, competitive weakness, and other environmental threats. Theseopportunities are revealed in a rigorous environmental analysis. Criteria for evaluating opportunities should include bothquantitative and qualitative components (e.g., consumer needs and potential profitability).

Also recognize that threats can result in opportunities. The increasing proportion of working women was a threat to Avonbecause they were less likely to be at home to receive the Avon saleslady. Avon turned threat to opportunity byencouraging its salespeople to sell at the office, and Avon is now beginning to open retail stores.

However, just as a threat can be turned into an opportunity, the reverse is also true. Threats can come in three forms: (1)the firm misreads customer needs, (2) competitors introduce a similar or new product, and (3) the firm fails to foreseeenvironmental changes that render a product entry obsolete.

Finally, remember that there are no right or wrong answers in a SWOT analysis: like the environmental analysis, it is asubjective process and open to different interpretations. However, it is very important to put some thought into the SWOTanalysis because it will serve as the tool to guide the direction and focus of future strategies. Thus, you must use theknowledge and expertise you have acquired through your research to deftly define your strategic focus. Remember, also,that a SWOT analysis is just a snapshot at one point in time. Situations and trends will change with the passage of time.You should routinely perform a SWOT analysis and the organization should be flexible enough to continuously adapt toopportunities and threats identified and to capitalize on the strengths of the organization while seeking to improve theweaknesses.


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Grosvenor House Sample SWOT Analysis

It is an important skill to be able to perform a substantive SWOT analysis, and evaluate the opportunities and liabilities thatbecome clear. Here are some key points to consider when working on a SWOT analysis.

Sources of Marketing Opportunity - Three sources of marketing opportunity are unmet customer needs, competitiveweaknesses, and other environmental threats. These opportunities are revealed in a rigorous environmentalanalysis.Threats can result in opportunities. For example, the increasing proportion of working women was a threat to Avonbecause they were less likely to be at home to receive the Avon saleslady. Avon turned threat to opportunity byencouraging its salespeople to sell at the office.Just as a threat can be turned into an opportunity, the reverse is also true. Threats can come in three forms:

the firm misreads customer needs;competitors introduce a similar or new product; andthe firm fails to foresee environmental changes that render a product entry obsolete.

Criteria for evaluating opportunities should include both quantitative and qualitative components (e.g., consumerfeeling [affect] and potential profitability).

The following is an example of a well done SWOT analysis:


Module 1 Wrap-up

Congratulations on completing Module 1. This module focused on the basics of conducting market research.

Having completed this module, you should be able to:

Define marketing researchExplain the need for marketing researchDiscuss the six steps in the marketing research processDiscuss elements of consumer behavior relevant to the hospitality industryDiscuss the six stages of the buying-decision process as it applies to the hospitality industryDiscuss factors influencing consumer buying decisions in the hospitality industryDefine the term psychographicsDefine the term segmentation and its purpose as it applies to the hospitality industryDiscuss the basic criteria for segmentationDiscuss the advantages and limitations of market segmentationDefine environmental scanningDiscuss the seven interrelated environmental forces that organizations must contend withDefine the term competitive advantageDefine the term SWOT AnalysisEvaluate opportunities for SWOTExplain what is meant by breakthrough opportunities


MODULE OVERVIEW

Module 2: Target Markets and Strategic Positioning

This module is designed to give you the tools to identify and define target markets, and to give you examples of how towork with that information to reach business goals. To understand these tools, you will work with a case study helping aboutique hotel owner analyze data from his local market. Once you clearly understand target markets, you will begin towork with the concept of strategic positioning. Strategic positioning allows clever managers/marketers to distinguish theirbusiness from the competition, and to create promotions and initiatives that respond to the needs of target markets. Oneway to further define elements of strategic positioning is to create a positioning map for your business. A positioning mapis a survey tool marketers use to identify potential conflicts between consumers perception of a product or service and theway the marketers want to position that product or service.

After completing this module, you will be able to:

Define the term .target marketDescribe and implement strategies for selecting a target market.Define .strategic positioningList the objectives of a positioning strategy.Use a positioning map to determine a strategic position with respect to specific criteria.


TOPIC OVERVIEW

Selecting a Target Market

Before a marketing strategy can be implemented, the marketer must identify, evaluate, and select a target market.

A is a group of people or institutions, but it also requires:market

Wants or needs that can be satisfied by particular product categoriesBuying power, which is analyzed through distribution of income and expenditure patternsWillingness to spend, which is determined by studying the market's buying behavior

A is a fairly homogeneous or similar group of customers to whom a company wishes to appeal. A firm maytarget markethave one or many target markets.

The target market is important because it addresses the question of whose needs will be met by the product. The needsare different, depending upon the customer in question, and the value delivered to the customer is therefore different aswell. Organizing target markets allows customers with similar needs to be grouped together and served better by yourorganization.

Selecting a target market involves analyzing market opportunities that are compatible with the organization's goals andimage.


Define the term target marketDescribe and implement strategies for selecting a target market


Select a Target Market

A residential property is being converted into a boutique hotel. The owner of this hotel conducted a thoroughenvironmental analysis, which produced quite a bit of data about the area where the hotel is located. After looking throughthe collected data, you will assist the owner by suggesting which target markets to pursue from a detailed list of choices.

When you have made your choices and selected the target market(s) best suited for the boutique hotel, print your results,since they will be used for this topic's discussion.

Transcript: Select a Target Market

A residential property centrally located in the fictional college town of Centerville is being converted into a boutique hotel.As part of his initial market research, the owner conducted an environmental analysis, which produced the following data:

Sociocultural Data

The broader Centerville area offers seven golf courses, including a Robert Trent Jones course located on the StateUniversity campus.

Centerville is located on a large lake, so fishing and sailing are popular sports in the fall, spring, and summer, whilesnowmobiling and cross-country skiing are popular during the winter months.The Centerville area has a number of tourist attractions, including scenic hiking trails, wineries, and fall foliage.State University provides a number of events associated with the performing arts, including plays and music anddance recitals. Community theatre is also popular and Centerville supports three community theaters.State University also offers an art museum, and Centerville has a hands-on science museum.Centerville has 103 restaurants, ranging from cafés to fine-dining establishments. These dining establishmentsoffer every type of food imaginable.Each year, Centerville hosts an Apple Harvest Festival; a Chili Cook Off; the Centerville Festival, to promote artappreciation; and the Grassroots Festival, a four-day music event.

Demographic Data

The town of Centerville has a population of 29,872 permanent residents.Whites make up 81% of the Centerville population, Asians comprise 10%, African-Americans comprise 6.5 %, andHispanics make up 3.6%. Overall, 11.5% of the Centerville population is foreign born. Women make up 48.3% ofthe Centerville population; 51.4% of the population is between the ages of 18 and 24 years of age.Most of Centerville's population (86.7%) graduated high school and approximately 50% of the population seekshigher education. Currently, 42% of Centerville residents have four-year degrees.The student population of Centerville drops dramatically during the summer and winter breaks.Visitors, such as prospective students, parents, alumni, recruiters, and academics, routinely visit the StateUniversity campus in Centerville. Parents arrive at the beginning and end of the academic year to assist theirchildren with moving. Parents also arrive during Parents' Weekend and Graduation Weekend. Alumni are presentduring Homecoming weekend. Recruiters arrive in October, November, February, and March. During these times,all hotels in the area are completely booked. Further, during Graduation Weekend, all hotels within a 50-mile radiusof the campus are full.

Economic Data

The average Centerville household income is greater than $44,000; however, the median Centerville income is$37,874, slightly lower than the median income of the United States as a whole.Thirty-nine percent of Centerville's population is employed in service industries.The unemployment rate in Centerville is low at 2.3%.Centerville is considering instituting a living-wage law that would require that all full-time workers earn a minimumof $8.96 an hour, or $10.58 for jobs without health benefits, and receive 15 paid days off a year.Interest rates are currently the lowest they have been in decades.

Technological Data

Centerville has its own Web site, and a Web cam located in the downtown area gives visitors to the Web site aconstant view of life in Centerville.


Political/legal Data

Construction plans for any type of food service or retail establishment must be approved by Center County and bythe Environmental Health Division of the Center County Health Department. Plans submitted must becomprehensive, and should include the proposed layout of the establishment, proposed methods of pest/rodentcontrol, plumbing and sewage specs, and the manufacturers and model numbers of any equipment that will beused.

Competitive Data

Gates Hotel is a 150-room, full-service, three-star hotel owned by the university and located in the center of theState University campus. It has an occupancy rate of 85% and an average daily room rate of $160. The hotel is apopular spot for recruiters, visiting academics, and parents because of its superior campus location, but it alsoattracts some corporate meetings. It has a number of smaller meeting spaces, capable of holding 15 to 75 people,and a high-tech amphitheatre-style meeting room with executive seating designed to hold up to 150 people. Thehotel offers guests Internet access and voice mail. It has one large ballroom that can hold 400 guests seated attables. The hotel also boasts an upscale restaurant that overlooks the campus, but the food is average and theprices are high. The restaurant does the bulk of its business at lunch time.Only two other hotels are near the campus. One, the Hillside Lodge, is a 41-room economy inn located a mile westof campus, offering rooms with televisions and air conditioning. A free continental breakfast is available. Rates runfrom $30-$60 per night. A 94-room Best Western motel is located four miles east of campus. Its rooms haverefrigerators and televisions; executive rooms have microwaves, data ports, and fireplaces. Rates run from$60-$100 per night.Other accommodations in Centerville include a 177-room Holiday Inn located in the downtown area five miles fromthe university campus; a 121-room Ramada Inn and a 106-room Clarion Hotel located ten miles from campus nearseveral shopping centers and a small mall; and a 100-room Courtyard Hotel located near the airport andapproximately 20 miles from campus. In addition to these major properties, 25 inns and bed & breakfasts are in thearea. Rates at these latter properties range from very cheap ($30 per night) to expensive ($350+). The largest ofthese properties has 35 rooms, while the smallest has only one, but most of the bed & breakfasts offer two to fourrooms for rent. The closest of these accommodations is five miles from campus; the farthest is 30 miles away.

Ecological Data

Centerville is ecology conscious and recycling is mandatory.


Strategies for Selecting Target Markets


TOPIC OVERVIEW

Determining a Strategic Position

After identifying a target market or markets, marketing professionals must determine a strategic position. Strategic is the realistic appraisal and communication to the key markets of how a hotel wants to be perceived in thepositioning

market. A marketer uses a positioning strategy to distinguish the firm's good or service from the competition and to createpromotions that communicate the desired position. Proper positioning will result in maximum profitability in the mediumand long term. Product positioning must be based on satisfying consumers' needs. A company must produce themarketing mix that will satisfy a target market's needs and communicate the benefits of the product to the target market.

Pitfalls of not developing a positioning strategy:

The firm is forced into a position of competing directly with stronger competitionThe firm's position is unclear, so it lacks true identityThe firm has no position in customers' minds, so it lacks top-of-mind awareness


Define strategic positioningList the objectives of a positioning strategyUse a positioning map to determine a strategic position with respect to specific criteria


Positioning Maps

Positioning maps are tools that enable hospitality firms to develop differentiation and positioning strategies for theirproducts. By using a positioning map, marketers can visually represent the competitive structure of their markets, asperceived by their customers. Moreover, this tool allows marketers to identify potential conflicts between consumers'perception of the specific product attributes and the way the marketers are trying to position those attributes. Data for apositioning map may be derived from customer perceptions of existing products and new concepts along variousattributes; customer preferences for products; and other data yielded by customer responses toward products, includingmarket share.

Positioning analysis can use either perceptual mapping or preference mapping techniques. Perceptual mapping helps thehospitality organization visualize how customers view their product(s) relative to competitive products. Preferencemapping plots customers' ideal points, those data points which represent the location of the real or hypothetical productthat has the strongest appeal to customers. These points are overlaid on a map which illustrates the locations ofcompetitive products.

According to Decision Pro, Inc. (2007) positioning analysis also assists hospitality organizations in answering suchquestions as:

Which target segments are the most attractive?How should new products be positioned in relation to existing products?How do current customers view the brand?What product is closest to the target market's ideal points?Which brands do customers perceive to be close competitors?What product attributes account for customer-perceived differences among products?How would altering a product's attributes change the product's market share?


Steps to Determine a Strategic Position

Click the links below to learn more about determining a strategic position.

Transcript: Steps to Determine a Strategic Position

Analyze

Analyze product attributes important to customers.

Attributes should be:

Salient: top of the mindDeterminant: actually determine the choice of a product or serviceImportant: become important to customers after they've made the choice

Examine

Examine distribution of these attributes among different market segments.

To which target market do you want to direct your efforts?

What is the target market's perception of your product regarding each of the attributes?

Determine

Determine the optimal position for the product with regard to each attribute.

In positioning your product, take advantage of your strengths, while trying to avoid direct competitors.

Choose

Choose an overall position.

Try to position your product so you are competing with the fewest strong competitors, yet establishing theposition that focuses on the attributes that are most important to your target market.


Module 2 Wrap-up

Congratulations on completing Module 2. This module focused on identifying and defining target markets, as well as theconcept of strategic positioning.

Having completed this module, you should be able to:

Define the term .target marketDescribe and implement strategies for selecting a target market.Define .strategic positioningList the objectives of a positioning strategy.Use a positioning map to determine a strategic position with respect to specific criteria.


Course Wrap-up

Upon reaching this page, you should have completed the following modules in the course:

Conducting Market ResearchTarget Markets and Strategic Positioning

If you have completed these modules, congratulations! Let's review the course objectives. Having completed this course,you should feel comfortable with your ability to do the following:

Conduct an environmental analysis in order to develop an effective marketing strategy for an organization in thehospitality industryUse a SWOT analysis to analyze marketing data and guide strategic planningIdentify a target market for a product or serviceUse a positioning map to determine a strategic position with respect to specific criteria


Thank You and Farewell

Hello. This is Judy Siguaw again. Congratulations on completing the second course in the marketing certificate series,Conducting Effective Hospitality Marketing Research. I hope you've enjoyed the course and now have a much betterunderstanding of marketing research and strategic positioning. If you're interested in learning more about marketing inthe hospitality industry, consider signing up for the third course in the series: The Hospitality Marketing Mix: Productand Price. This course covers the product life cycle, new product development, how fast innovative products are adopted,and how to measure service quality. I hope you join us in this next intellectual pursuit.


Stay Connected


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Glossary

conducting an environmental analysis

For a business, to conduct a marketing environmental analysis is to construct an overall map of where theyare. This map will then help them to navigate towards business goals. An environmental analysis looks atthese seven factors:

SocioculturalDemographicEconomicTechnologicalPolitical and legalCompetitiveEcological

database marketing

Database marketing is the creation of a large computerized file of customers'-and potentialcustomers'-profiles and purchase patterns. Databases are built through customer lists, coupon redemptionrecords, guest registration, customer clubs, and intermediary information.

four Ps of marketing

Marketing consists of four components around which marketing strategies are developed: product, place,price, and promotion.

market segmentation

Market segmentation can create more revenues than a mass marketing strategy by addressing consumers'different needs. It promotes new ideas centered on the customer segment, and helps to develop an effectivemarketing mix-product, price, promotions, and place-geared to a particular set of customers.

marketing concept

The marketing concept is based on three fundamental beliefs: all planning and operations should becustomer oriented, all marketing activities in an organization should be coordinated, and finally, customerorientation and coordination of activities are essential to achieve the organization's performance objectives.

marketing information system

A Marketing Information System (or Marketing Intelligence System) involves the continuous collection andanalysis of marketing information into a central database. It may comprise information from internal reports(property management-system reports, reservation data, guest history, etc.) and environmental scanning,such as competitor intelligence.

marketing mix

The successful marketer will carefully mix the four elements of marketing, product, place, price, andpromotion, into a balance that will satisfy the consumer in the face of the competition.

positioning maps

A positioning map is a survey tool marketers use to identify potential conflicts between consumers'perception of the specific product attributes and the way the marketers are trying to position those attributes.

relationship marketing

After enough data is in place, database marketing allows for relationship marketing. Relationship marketingis a means for attracting, developing, and retaining customer relationships to build strong customer loyalty.Relationships will be based on the buyer's trust and satisfaction with the seller.

six stages of the buying process


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The six stages of the buying process are:

Need recognition or problem awarenessChoice of an involvement levelIdentification of alternatives or information searchEvaluation of alternativesPurchase decisionPost-purchase behavior

strategic positioning

Strategic positioning is the realistic appraisal and communication to the key markets of how a hotel wants tobe perceived in the market.

SWOT analysis

SWOT stands for Strengths, Weaknesses, Opportunities and Threats. The strengths and weaknessescategories are based on internal issues, while opportunities and threats are based on external issues. ASWOT analysis is really a decision-making tool, providing a framework for identifying and highlighting issuesthat are critical when making organizational decisions.

target market

A target market is a fairly homogeneous or similar group of customers to whom a company wishes toappeal. A firm may have one or many target markets. Organizing target markets allows customers withsimilar needs to be grouped together and served better by your organization.

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