FounAabionA ana xxcl Tou/tL&m Stowe Shoemaker Donald Hubbs Distinguished Professor Associate Dean of Research Conrad N. Hilton College of Hotel and Restaurant Management University of Houston Margaret Shaw Professor of Marketing School of Hospitality and Tourism Management University of Guelph Ontario, Canada PEARSON Prentice Hall Upper Saddle River, New Jersey Columbus, Ohio
Contents K>» fflnteec Preface xv About the Authors xxv PARTI INTRODUCTION TO HOSPITALITY MARKETING 1 CHAPTER 1 The Concept of Marketing 3 Marketing Executive Profile: Michael A. Leven 4 Marketing in Action 5 What Is Marketing? 7 Marketing and the Hospitality Industry 8 Marketing and the Firm 10 Twofold Purpose of Marketing 10 Solving Customers'Problems 12 Firms' Orientations 16 Operations Orientation 17 Product/Service Orientation 18 Selling Orientation 19 Bottom-Line Orientation 20 Marketing Orientation 20 Marketing Leadership 21 Opportunity 22 Planning 22 Control 23 Marketing Is Everything 23 CHAPTER SUMMARY 24 KEY TERMS 24 DISCUSSION QUESTIONS 25 ENDNOTES 25 CASE STUDY: SOJOURN IN JAMAICA 25 CHAPTER 2 Marketing Services 29 Marketing Executive Profile: Ivan Artolli 30 Marketing in Action 30 Services versus Goods 32 Intangibility 33 Perishability 36 Heterogeneity 37 Inseparatibility of Production and Consumption 39 The Hospitality Product 40 Components of the Hospitality Product 42 Physical Product 42 Service Environment 43 Service Product 44 Service Delivery 44 The Interrelationships of the Components of the Hospitality Product 44 Service Quality and Service Gaps 45 Dimensions of Service Quality 48 Zone of Tolerance 50 CHAPTER SUMMARY 50 KEY TERMS 51 DISCUSSION QUESTIONS 51 ENDNOTES 51 CASE STUDY: LITTLE THINGS MEAN A LOT 52 CHAPTER 3 The Marketing Mix and the Product Life Cycle Marketing Executive Profile: Nicole Tabori 56 Marketing in Action 56 Original Marketing Mix: The Four Ps 58 Hospitality Marketing Mix: The Seven Ps 58 The 13 Cs 59 Hospitality Product/Service Mix 60 Designing the Hospitality Product 61 Bundle Purchase Concept 61 Formal Product 61 Core Product 62 Augmented Product 62 Complexity of the Product/Service Mix 63 Standardization of Products 65 Standard Products with Modifications 67 Customized Products 67 International Product or Service 68 ^Making the Product Decision 69 Product Life Cycle 70 Nature of Product Life Cycles 71 Stages of the Product Life Cycle 72 Introductory Stage 72 Growth Stage 74 Mature Stage 75 Decline Stage 77 Developing New Products or Services 79 CHAPTER SUMMARY 80 KEY TERMS 80 DISCUSSION QUESTIONS 81 ENDNOTES 81 CASE STUDY: A HASSLE-FREE HOTEL IN BERMUDA 82 55 IX
X a CONTENTS CHAPTER 4 Relationship and Loyalty Marketing 85 Marketing Executive Profile: Adam Burke 86 Marketing in Action 86 What Is Loyalty and Why Is It Important? 88 Maintaining a Good Relationship with the Customer 92 Customer Relationship Management (CRM) 94 Lifetime Value of a Customer 94 Building Loyalty 97 Evolution of Customer Loyalty 97 The Loyalty Circle 98 Frequent Guest Programs 100 What Loyalty Programs Don't Do 101 What Makes Loyalty Programs Work 102 Customer Complaints and Service Recovery 103 What to Do about It 105 Employee Relationship Marketing, or Internal Marketing 106 Noncontact Employees 107 CHAPTER SUMMARY 108 KEY TERMS 109 DISCUSSION QUESTIONS 109 ENDNOTES 109 CASE STUDY: HARRAH'S CRM STRATEGY 110 PART II INTEGRATION 119 CHAPTER 5 The Marketing Plan 121 Marketing Executive Profile: Terry Jicinsky 122 Marketing in Action 123 Requirements for a Marketing Plan 126 Development of the Marketing Plan 127 Data Collection 128 External Environment 128 Competitive Environment 129 Internal Environment 131 Data Analysis 132 Environmental and Market Trend Analysis 132 Competitive and Demand Analysis 133 Property Needs Analysis 133 Internal Analysis 136 Market Analysis 137 Mission and Marketing Position Statement 137 Opportunity Analysis 138 Objectives and Methods 139 Marketing Action Plans 139 Marketing Forecast 140 Marketing Budget 141 Marketing Controls 142 CHAPTER SUMMARY 143 KEY TERMS 145 DISCUSSION QUESTIONS 145 ENDNOTE 145 CASE STUDY: EMIR'S DELICACIES LEBANESE RESTAURANT 146 PART III STRATEGIC MARKETING 155 CHAPTER 6 Strategic Marketing 157 Marketing Executive Profile: Christian Hempell 158 Marketing in Action 158 Strategic Marketing, Marketing Management, and Marketing Effectiveness 160 Strategy 161 Strategic Leadership 162 Strategic Marketing 163 Concept of Strategy 164 Strategic Marketing System Model 164 Master Marketing Strategy 166 Situational Analysis 167 Using the Strategic Marketing System Model 170 Objectives and Master Strategies 170 Business Strategies 171 Functional Strategies 176 Feedback Loops 180 Strategy Selection 181 CHAPTER SUMMARY 182 KEY TERMS 182 DISCUSSION QUESTIONS 183 ENDNOTES 183 CASE STUDY: THE MARKETING OF "LITTLE ENGLAND" 184 CHAPTER 7 Competition and the Marketing Environment Marketing Executive Profile: Jan Freitag 192 Marketing in Action 192 Environmental Scanning 194 Types of Environments 195 Technological Environments 195 Political Environment 196 Economic Environment 199 Sociocultural Environment 201 Regulatory Environment 203 Ecological/Natural Environment 204 Competition 207 Macrocompetition 208 Micro competition 208 Choosing the Right Competition 209 Competitive Intelligence 210 Market Share 211 191
CONTENTS O XI REVPAR 212 Restaurant Comparisons 213 Other Measures Used to Analyze Competition 213 Perceptual Mapping 213 Using Competitive Intelligence 215 Raising Barriers 215 Competitive Marketing 216 CHAPTER SUMMARY 216 KEY TERMS 217 DISCUSSION QUESTIONS 217 ENDNOTES 218 CASESTUDY: THE BEEFSTEAK STEAKHOUSE 219 PART IV THE MARKETPLACE CHAPTER 8 Understanding Individual Customers Marketing Executive Profile: Thomas Storey 226 Marketing in Action 226 Characteristics of Customers 229 Needs and Wants 229 Application of the Theories 230 The Buying Decision Process 231 Needs, Wants, and Problem Recognition 232 Search Process 233 Stimuli Selection 233 Selectivity 234 Perceptions 234 Alternative Evaluation 236 Beliefs 237 Attitudes 238 Intention 238 Barriers to Purchase 239 Outcomes Satisfaction or Dissatisfaction 239 223 225 Types of Hospitality Customers 241 Business Travelers 241 Package Market 250 Mature Travelers 252 International Travelers 253 Free Independent Travelers (FIT) 254 Consumers Who Are Members of Private Clubs 255 CHAPTER SUMMARY 256 KEY TERMS 257 DISCUSSION QUESTIONS 257 ENDNOTES 257 CASE STUDY: YORE HEROES TAP AND GRILL 258 CHAPTER 9 Understanding Organizational Customers 265 Marketing Executive Profile: Charlotte St. Martin 266 Marketing in Action 267 Generic Organizational Market 270 Meeting Planners 270 Buy Time 271 Assessing Needs 274 Resolving Conflicts 274 Executing the Meeting 275 Evaluating the Results 275 Corporate Travel Market 276 Knowing the Volume 277 Understanding Travel Patterns 278 Corporate Meetings Market 278 Conference Centers 280 Incentive Market 282 Association, Convention, and Trade Show Markets 284 Convention Centers and Convention and Visitors Bureaus 286 SMERF and Government Markets 287 Group Tour and Travel Market 289 Motorcoach Tour Travelers 289 CHAPTER SUMMARY 291 KEY TERMS 292 DISCUSSION QUESTIONS 292 ENDNOTES 293 CASE STUDY: BRIDGEPORT INN AND CONFERENCE CENTER 294 CHAPTER 10 Understanding Tourism Markets 299 Marketing Executive Profile: Vincent Vanderpool-Wallace 300 Marketing in Action 300 Importance of Travel and Tourism 302 Local Residents' Attitudes Towards Tourism 305 National Tourism Organizations 306 How Hotels and Tourist Destinations Work Together 309 Destination Marketing Strategy 315 Macro Environment 315 Segmenting the Tourist Market 320 How to Describe Markets 322 Communicating with the Tourist Market 323 Importance of Image Promotion 323 Choosing a Destination 324 Travelers' Information Search Behavior 324 Expertise 325 Familiarity 325 CHAPTER SUMMARY 328 KEY TERMS 328 DISCUSSION QUESTIONS 329 ENDNOTES 329 CASE STUDY: ECO PARAISO 330
XII O CONTENTS PART V FUNCTIONAL STRATEGIES 337 CHAPTER 11 Advertising, Merchandising, and Public Relations 339 Marketing Executive Profile: Jennifer Ploszaj 340 Marketing in Action 340 Communications Strategy 343 To Whom to Say It 345 Why Say It 346 What to Say 348 How to Say It 349 How Often to Say It 349 Where to Say It 349 Push/Pull Strategies 350 Word-of-Mouth Communication 350 The Impact of Word of Mouth 350 Measuring Word of Mouth 352 Budgeting the Communications Mix 352 Advertising 354 Role of Advertising 355 What Advertising Should Accomplish 356 Use of Advertising Today 357 Collateral 358 Merchandising 358 Basic Rules of Merchandising 359 Examples of Good Merchandising 361 Public Relations and Publicity 362 Public Relations 363 Publicity 369 CHAPTER SUMMARY 370 KEY TERMS 371 DISCUSSION QUESTIONS 371 ENDNOTES 372 CASE STUDY: THE LANCANDON RAINFOREST, CHIAPAS, MEXICO 372 CHAPTER 12 Personal Selling and Sales Promotions Marketing Executive Profile: Carrie Ballew 380 Marketing in Action 380 The Sales Process 384 Prospecting 384 Qualifying Prospects 386 Sales Approach 387 Probing 388 Benefits and Features 390 Handling Objections 391 Closing the Sale 392 Following Up 393 Sales Action Plan 393 Development of Sales Personnel 393 379 Sales and Operations 394 Principles and Practices of Sales Promotions 396 Guidelines for Sales Promotions 396 How to Create Successful Sales Promotions 397 Be Single-Minded 398 Define the Target Market 398 Decide Specifically What You Want to Promote 399 Decide on the Best Way to Promote It 399 Make Sure You Can Fulfill the Demand 399 Communicate Clearly All Related Aspects of the Promotion 399 Communicate the Promotion to Your Employees 400 Measure the Results 400 Developing Sales Promotions 400 Identify the Gap 401 Design the Sales Promotion 402 Analyze the Competition 402 Establish Goals 403 Execute the Sales Promotion 403 Evaluate the Sales Promotion 403 CHAPTER SUMMARY 405 KEY TERMS 408 DISCUSSION QUESTIONS 408 ENDNOTES 409 CASE STUDY: CASTLE SPA 409 CHAPTER 13 Differentiation, Segmentation, and Target Marketing 419 Marketing Executive Profile: David W. Norton 420 Marketing in Action 421 Differentiation 424 Bases of Differentiation 425 Differentiation of Intangibles 426 Differentiation as a Marketing Tool 427 Differentiation of Anything 430 Market Segmentation 431 Which Comes First: Differentiation or Segmentation? 432 The Process of Market Segmentation 432 Segmentation Variables 435 Geographic Segmentation 435 Demographic Segmentation 437 Psychographic Segmentation 438 Usage Segmentation 442 Benefit Segmentation 445 Price Segmentation 447 Segmentation Strategies 449 Target Marketing 450 Mass Customization 452 CHAPTER SUMMARY 453
CONTENTS D XIII KEY TERMS 454 DISCUSSION QUESTIONS 454 ENDNOTES 455 CASE STUDY: THE RIDEAU GOLF AND COUNTRY CLUB 455 CHAPTER 14 Market Positioning and Branding 463 Marketing Executive Profile: John Griffin 464 Marketing in Action 464 Salience, Determinance, and Importance 467 Salience 467 Determinance 468 Importance 468 Objective Positioning 469 Subjective^ Positioning 470 Tangible Positioning 471 Intangible Positioning 472 How to Create Effective Positioning 474 Positioning's Vital Role 477 Repositioning 477 Branding and Positioning 479 Hotel Restaurant Branding 480 Multiple Brands and Product Positioning 481 CHAPTER SUMMARY 485 KEY TERMS 486 DISCUSSION QUESTIONS 486 ENDNOTES 486 CASE STUDY: PEARL RIVER GARDEN HOTEL SANYA 487 CHAPTER 15 The Pricing Decision 499 Marketing Executive Profile: Carolina Pontual Colasanti 500 Marketing in Action 500 Pricing Practices 502 Hotel Room Pricing 502 Restaurant Pricing 503 What Is Price? 503 Types of Costs 506 \ Cost-Based Pricing 507 Cost-Pius Pricing 507 Cost Percentage or Markup Pricing 507 Break-Even Pricing 508 Contribution Margin Pricing 508 Value-Based Pricing 509 Components of Value 510 Reference Pricing and Reservation Pricing 514 Psychological Pricing 515 Generic Pricing Strategies 516 Measuring the Impact of the Generic Pricing Strategies 520 Revenue Management 523 What Revenue Management Is 523 Revenue Management Practices 524 Yield 525 The Last Word on Pricing 526 CHAPTER SUMMARY 526 KEY TERMS 527 DISCUSSION QUESTIONS 527 ENDNOTES 527 CASE STUDY: A WORLD SERIES OF YIELD MANAGEMENT 528 CHAPTER 16 Channels of Distribution 531 Marketing Executive Profile: Anwen Parry 532 Marketing in Action 532 How Distribution Channels Work 536 Getting the Product to the Customer 538 Branded Hospitality Companies 538 Franchising 538 Management without Ownership 539 Getting the Customer to the Product 539 Reservation Services 539 Representation Firms 540 Consortia 541 Incentive Travel Organizations 542 Corporate Travel Departments and Travel Management Companies 543 Global Distribution Systems (GDSs) 544 Traditional Offline Travel Agents 544 Central Reservation Systems (CRSs) 545 Internet Channels 546 Websites 551 Website-Generated Market Research Data 556 Future Challenge of Online Distribution 557 Selecting Channels 559 Market Opportunities in China 560 Relationships with Channels 561 Evaluation of Channels 561 CHAPTER SUMMARY 562 KEY TERMS 562 DISCUSSION QUESTIONS 563 ENDNOTES 563 CASE STUDY: CARLSON HOSPITALITY WORLDWIDE "MAKING IT HAPPEN" 564 Glossary 575 Name Index 583 Subject Index 587 Photo Credits 611