Marketing for Hospitality and Tourism

Seventh Edition

CHAPTER 1
Introduction:
Marketing for
Hospitality and
Tourism

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 Learning Objectives

1. Understand the relationships between

the world's hospitality and travel
industry.
2. Define marketing and outline the steps
in the marketing process.
3. Explain the relationships between
customer value and satisfaction.

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 Learning Objectives (cont.)

4. Understand why the marketing

concept calls for a customer
orientation.
5. Understand the concept of the lifetime
value of a customer and be able to
relate it to customer loyalty and
retention.

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 Chipotle Mexican Grill

Key Components of
Chipotle's Vision

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 Purpose of a Business

Satisfied &
Create & Customer
Orientation Profitable
Maintain
Customers

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 What is Marketing?

• Marketing is the process by which

companies create value for customers
and society, resulting in strong
customer relationships which capture
value from the customers in return.

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 Marketing Mix

Product Place
(Distribution)

Price Promotion
(Sales & Advertising)

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 Tourism Marketing

Hospitality Tourism Travel

Industry Marketing Industry

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Figure 1–1 A simple model of the marketing process.

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Core Customer & Marketplace
Concepts

Needs, Wants Marketing Value &

& Demands Offerings Satisfaction

Exchanges &
Markets
Relationships

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Needs, Wants & Demands

Needs

Demands Wants

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 Marketing Offerings

• Customer wants and needs are fulfilled

through some combination of tangible
and intangible products and services.

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The Gamboa Rainforest Resort offers an experience of a lifetime, allowing guests to explore Panama's rainforest
and then relax at a resort enjoying a meal while watching ships traverse the Panama Canal.
Courtesy of Bern Hotels & Resorts.

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 Value & Satisfaction

Customer Customer Customer

Value Satisfaction Expectations

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Exchanges & Relationships and
Markets

MARKET

Exchange vs. Relationships

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Marketing Management
Orientations

Management
Orientations

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 Societal Marketing
Society
(Human welfare)

Societal
Marketing
Concept

Consumers Company
(Want Satisfaction) (Profits)
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 Customer Relationship
Management

Customer Customer
Value Satisfaction

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 Engaging Customers

Customer- Consumer-
Engagement Generated
Marketing Marketing

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Lifetime Value of the Customer

• Losing a customer means losing more

than a single sale.
– It means losing the entire stream of
purchases that the customer would
make over a lifetime of patronage.

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Lifetime Value of the Customer
(cont.)
• A company can lose money on a
specific transaction but still benefit
greatly from a long-term relationship.
– This is one of the reasons successful
companies empower employees to
resolve customer complaints.

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Figure 1–5 Customer relationship groups.
Source: Kotler, Philip; Armstrong, Gary, Principles of Marketing, 16th Ed., ©2016, pp. 12, 24, 50. Reprinted and
Electronically reproduced by permission of Pearson Education, Inc., New York, NY.

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 The Changing Marketing
Landscape

Changing
The Digital Economic Rapid
Age Environment Globalization

Sustainable The Sharing

Co-Creation
Marketing Economy

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 Key Terms

• Consumer-Engagement Marketing
fosters direct and continuous customer
involvement in shaping brand
conversations, experiences, and
community.

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 Key Terms (cont.)

• Consumer-Perceived Value
– The customer's evaluation of the
difference between all the benefits and
all the costs of a market offering
relative to those of competing offers.
• Customer Equity
– The discounted lifetime values of all the
company's current and potential
customer

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 Key Terms (cont.)

• Customer Satisfaction
– The extent to which a product's
perceived performance matches a
buyer's expectations
• Customer Expectations
– Based on past buying experiences, the
opinions of friends, and market
information

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 Key Terms (cont.)

• Customer Relationship
Management (CRM) involves
managing detailed information about
individual customers and carefully
managing customer "touch points" in
order to maximize customer loyalty.

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 Key Terms (cont.)

• Customer Touch Point

– Any occasion on which a customer
encounters the brand and product—
from actual experience to personal or
mass communications to casual
observation

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 Key Terms (cont.)

• Customer Value
– The difference between the benefits that
the customer gains from owning and/or
using a product and the costs of
obtaining the product
• Demands
– Human wants that are backed by buying
power

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 Key Terms (cont.)

• Digital and Social Media Marketing

– Using digital marketing tools such as
Web sites, social media, mobile apps
and ads, online video, e-mail, and blogs
that engage consumers anywhere, at
anytime, via their digital devices

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 Key Terms (cont.)

• Exchange
– The act of obtaining a desired object
from someone by offering something in
return
• Hospitality Industry
– Made up of those businesses that offer
one or more of the following:
accommodation, prepared food and
beverage service, and/or entertainment

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 Key Terms (cont.)

• Human Need
– A state of felt deprivation in a person
• Human Want
– The form that a human need takes
when shaped by culture and individual
personality

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 Key Terms (cont.)

• Lifetime Value (LTV)

– The lifetime value of a customer is the
stream of profits a customer will create
over the life of his or her relationship to
a business
• Marketing
– The art and science of finding, retaining,
and growing profitable customers

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 Key Terms (cont.)

• Marketing Concept
– The marketing management philosophy
that holds that achieving organizational
goals depends on determining the needs
and wants of target markets and
delivering desired satisfactions more
effectively and efficiently than
competitors.

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 Key Terms (cont.)

• Marketing Management
– The art and science of choosing target
markets and building profitable
relationships with them
• Marketing Manager
– A person who is involved in marketing
analysis, planning, implementation, and
control activities.

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 Key Terms (cont.)

• Marketing Mix
– Elements include product, price,
promotion, and distribution. Sometimes
distribution is called place and the
marketing situation facing a company.

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 Key Terms (cont.)

• Product Concept
– Anything that can be offered to a
market for attention, acquisition, use, or
consumption that might satisfy a want
or need. It includes physical objects,
services, persons, places, organizations,
and ideas.

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 Key Terms (cont.)

• Production Concept holds that

customers will favor products that are
available and highly affordable, and
therefore management should focus on
production and distribution efficiency.
• Purpose of a Business
– To create and maintain satisfied,
profitable customers

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 Key Terms (cont.)

• Relationship Marketing involves

creating, maintaining, and enhancing
strong relationships with customers and
other stakeholders.
• Selling Concept
– The idea that consumers will not buy
enough of an organization's products
unless the organization undertakes a
large selling and promotion effort

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 Key Terms (cont.)

• Share of Consumer
– The portion of the customer's
purchasing that a company gets in its
product categories

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 Key Terms (cont.)

• Societal Marketing Concept

– The idea that an organization should
determine the needs, wants, and
interests of target markets and deliver
the desired satisfactions more
effectively and efficiently than
competitors in a way that maintains or
improves the consumer's and society's
well-being

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 Key Terms (cont.)

• Transaction consists of a trade of

values between two parties;
marketing's unit of measurement.
• Value Proposition
– The full positioning of a brand—the full
mix of benefits upon which it is
positioned

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