Republic of the Philippines

SORSOGON STATE UNIVERSITY

SORSOGON City Campus
Magsaysay Street, Sorsogon City
Tel. No.: (056) 211 0178; E-mail Add.: ssc@sorsu.edu.ph

Module in Tourism and Marketing

Tourism and Hospitality Management

Kristy H. Ranera
Instructor I

MODULE LESSON
The students will be equipped with necessary skills to develop actual marketing campaigns for a
business within the tourism and hospitality industry. They will be able to analyze consumer
behavior and learn to make effective marketing decisions as they apply to customer satisfaction.
Highlighting the analysis of the market, its competition and products; preparation of a financial
budget and the development of short-term and long-term strategies to achieve desired profit
through effective advertising, sales and an effective public relations plan.

TOURISM AND HOSPITALITY MARKETING

Topic: Introduction to Tourism and Hospitality Marketing

Instructor: Kristy Hara Ranera

MARKETING
 Is a continuous, sequential process through which management in the hospitality and
travel
 industry plans, researches, implements, controls, and evaluates activities designed to
satisfy both customers’ needs and wants and their own organization’s objectives.
 Marketing is the process of exploring, creating, and delivering value to meet the needs of
a target market in terms of goods and services; potentially including selection of a target
audience; selection
 To be most effective, marketing requires the efforts of everyone in an organization and
can be made more or less effective by the actions of complementary organizations.

KNOWING THE HISTORY OF MARKETING

The history of marketing starts much earlier than most people think. While there is some
dispute around how marketing truly began, many historians believe the concept started
as early as 1500 BCE (before common era) when Mesopotamian societies started
mass production of goods that required quality control.

In some ways marketing is as old as civilization itself. You may have seen films
based in ancient Greece or Rome with images of bustling market stalls and traders
actively engaged in persuasive communications. Of course, these traders would
not have called their activities marketing and their activities may seem far
removed from someone ordering airline tickets via a website.

The concept of marketing that we now see has more to do with developments
during the industrial revolution of the 18th and 19th centuries. This was a period
of rapid social change driven by technological and scientific innovation (see BBC
history website).

One result was that for the first time the production of goods was separated from
their consumption. Mass production, developing transport infrastructure and
growing mass media meant that producers needed to, and could develop more
sophisticated ways of managing the distribution of goods.

Philip Kotler is widely acknowledged as the father of modern marketing and with
57 books to his name it's not hard to understand why he is such an authority.
 The marketing evolution is a process and stages through which the marketing
concepts, philosophies, mechanisms, tools and techniques, and orientations of
marketing are changing and has changed over the period of the history of
marketing.

FUNCTION OF MARKETING

“Marketing is the process of planning and executing conception, pricing, promotion, and
distribution of ideas, goods, and services to create exchanges that satisfy individual and
organizational objectives.”

SEVEN FUNCTIONS OF MARKETING

WHAT IS THE ACTUAL PURPOSE OF MARKETING?

We know a lot about marketing, its different aspects and strategies. But why do we
actually do marketing? What is the purpose of all marketing efforts taken? At first thought, the
answer is simple: sell more. However, marketing is much more than that. We have to consider a
spectrum of seven functions of marketing to find an answer for the question of the purpose of
marketing. These functions define all the aspects that are part of the practice of marketing.

1. Distribution is the process of deciding how to get goods in customers’ hands. Although
you would not directly relate it to marketing, it is an essential function of marketing:
without distribution, the value does not end where you intend it to be. Physically moving
and storing goods is part of distribution planning. The main methods of transportation are
by truck, rail, ship, or air. Some large retail chains store products in central warehouses
for later distribution. Distribution also involves the systems that track products so that
they can be located at any time.

2. Financing is getting the money that is necessary to pay for setting up and running a
business. Why is it one of the seven functions of marketing? Indeed, there is a close
relationship between marketing and finance. None can stand without the other: Without
marketing, the company does not deliver value to customers and does not sell its
products. As a consequence, there are no profits and no need for finance.
 Business owners often obtain bank loans to start a new business. Some also form
corporations and may sell shares (or stock) of the business. Financing also involves
decisions such as whether to offer credit to customers. Most retailers offer customers
payment options such as MasterCard or Visa, while other stores offer their own credit
services.

3. Marketing Distribution sound business and marketing decisions rely on rich

information about customers, trends, and competing products. Gathering this information,
storing it, and analyzing it is part of marketing information management. Collecting
information is done on a continual basis and through special marketing research studies.
This is what marketers do to find out about customers, their habits and attitudes, where
they live, and what trends there are in the marketplace. Companies conduct research so
they can be successful at marketing and selling their products.

4. Pricing is one of the seven functions of marketing that you also find in the marketing
mix. Pricing decisions dictate how much to charge for goods and services in order to
make a profit. Pricing decisions can be based on costs, competitors‘ prices, and value
delivered to customers. To determine a price, marketers nowadays for most products need
to determine how much customers are willing to pay.

5. Product Management is obtaining, developing, and improving a product or a product

mix in response to market opportunities. An important part of it is New Product
Development. Why is it related to marketing? Well, first of all, a product is the core
means of delivering value to customers. In addition, marketing research guides product
management towards what the consumer needs and wants.

6. Promotion is the effort to inform, persuade, or remind potential customers about a

business’s products or services. As such, it plays a key role in communicating value to
customers, which makes it part of the seven functions of marketing. Online ads,
television and radio commercials are forms of promotion. This type of promotion is
called advertising. Promotion is also used to improve a company’s public image. In this
case, it is referred to as PR (Public Relations). A company can show that it is socially
responsible by recycling materials or cleaning up the environment. Promotion concepts
and strategies are used to achieve success in the marketplace.

7. Selling provides a key link between creation of value and delivery of value to the
customer. It reflects the change of ownership of value and provides customers with the
goods and services they want. This includes selling in the retail market to you, the
customer, and selling in the business-to-business market to wholesalers, retailers, or
manufacturers.

Selling techniques and activities include determining client needs and wants and
responding through planned, personalized communication. The selling process influences
purchasing decisions and enhances future business opportunities.
Marketing refers to activities a company undertakes to promote the buying or selling of a
product or service. Marketing includes advertising, selling, and delivering products to
consumers or other businesses. Some marketing is done by affiliates on behalf of a company.
Marketing function is a role which helps a company to identify and source potentially successful
products for the marketplace they operate on and then promote them by differentiating them
from similar products. It is a vital part of any company.
Typical marketing function types within a larger business includes performing market research,
making marketing plan, and product development, market development, market penetration as
well as strategically taking care of advertising, distribution for sale, pricing, after sales customer
service and public relations.

EVOLUTIONARY ERAS OF MARKETING

Production-orientation Era
 It is the first evolutionary stage in the development of marketing. It began with the
industrial revolution in the 1870’s and lasted into the 1920’s.
 During this era, the production capacities of factories could not keep pace with demand.
Demand exceeded supply.

Sales-Orientation Era
 Technological advances in production and increased competition changed the emphasis
of marketing. Beginning in the 1930’s, there was enough capacity to meet demand.
 As competition intensified, the emphasis switched from production to selling. Beating the
competition by outselling them was first priority.

Marketing orientation Era

 Resulted from even more intense

competition and technological advances.
Supply now exceeded demand.
  This era had two stages – the marketing department era and marketing company era.
 The marketing department era, the need to set up new departments to coordinate
marketing activities gained acceptance.
Sales departments and divisions were renamed and reorganized, and their responsibilities
were expanded to include the related functions of advertising, customer service, and other
marketing activities. “that’s not our problem, it’s the marketing department’s problem”

 The marketing company era in the 1960s. The marketing department might have had
the prime responsibility for marketing related activities but all departments played a role
in and were affected by customer satisfaction level. “ It’s everyone’s problem if our
customers are not satisfied”

Societal-marketing-orientation Era

 Beginning in the 1970s, organizations started to recognize their social responsibility in

addition to their profit and customer satisfaction objectives.
 A prime example would be brewers and distillers that use advertising to fight drunk
driving, alcoholism and under-age drinking.

Online marketing Era

 1990s brought another era of marketing in which digital technologies were rapidly
adopted.
 Hospitality and travel marketers are now making heavy use of the world wide web for
providing information and accepting reservations.
 Use of email, cellphones, personal digital assistant, podcasting and webcasting.
 Is fundamentally changing how travelers get information about hospitality and travel
services, and how they book them. The era of ticketless air travel is almost upon us, as e-
tickets have replaced “hard copy” tickets.
 Online travel companies like expedia.com and travelocity.com are now among the
leading players in the travel distribution.

The PRICE of Marketing

  Plan – Where are we now?
 Research – Where would we like to be?
 Implementation – How do we get there?
 Control – How do we make sure we get there?
 Evaluation – How do we know if we got there?

Core Principles of Marketing

 Marketing Orientation – implies that the manager or organization has accepted the
marketing concept and acts according to it.

 Marketing Concept – when hospitality and travel managers adopt the marketing
concept, it means that they believe that satisfying customer’s needs and wants are first
priority.

 Satisfying customer’s needs and wants – this is to ensure company’s long term
survival. Organizations must always be alert for new opportunities to convert customer’s
needs and wants into sales.

 Market segmentation – all customers are not alike. It is better to pick out specific
groups of people (target markets) and market only to them. Some call this as the “rifle
approach”.

 Value and the Exchange process – value represents a mental estimate that customers
make of a hospitality or travel service’s ability to satisfy their needs and wants.
Marketing is an exchange process. The industry provides services and experiences that
customers find valuable and in return customers make reservations and pay money which
satisfies the industry’s financial objectives.
  Product life cycle – suggests all hospitality and travel services pass through four
predictable stage.
1. Introduction
2. Growth
3. Maturity and
4. Decline

Avoiding a decline is the key to long term survival.

 Marketing Mix – it includes the marketing strategy factors (the Ps of marketing) that are
used to satisfy the needs of specific customer groups.
It should collaborate with product, price, place, promotion, people, physical environment
and process to have a successful strategy in marketing a business.

MARKETING ENVIRONMENT FACTORS

Marketing Environment is a wide scope which covers all the outside factors, forces which affects
marketing management’s decisions and their relationship with target customers. Companies must
constantly adopt and change to the changing environment.

Marketing Environment is a study of all the external atmosphere of the organization affecting all
the internal factors within the organization which ultimately requires attention of the Marketing
management for sound decision making in the long run as well as short period.

Marketing environment encompasses the marketing team within an organization and includes all
of the outside factors of marketing that affect the team’s ability to develop and maintain
successful customer relationships with their targeted customer group.

Two types of Marketing Environment:

A. Micro Environment

1. Company
2. Suppliers
3. Marketing Intermediaries
4. Competitors
5. Public
6. Customers

B. Macro Environment

1. Demographic Environment- Demography is the study of human population in terms of size,

density, location, age, gender, race, occupation, and other statistics. Changes in the demographic
environment would include changes in the forces.

2. Economic Environment - Economic environment may be defined as those factors that affect
consumer buying power and spending patterns. Change in income will change the consumer
spending pattern, more is per head income more will be potential for spending.

3. Natural Environment - The natural environment involves the natural resources that are needed
as inputs by marketers or that are affected by marketing activities. Natural calamities or
unforeseen typhoons, floods, earth quakes and so on that is not beyond control by human.

4.Technological Environment - Technological environment constitutes those factors that create

new technologies to create new products and market opportunities. Technology affects not only
the finished products but also the raw materials, processes, operations and customer segments. In
today’s time rapid changes are happening in the technological environment.

5. Political and Social Environment -Political environment is another very important component
of the macro-environment that the firm must live in. Developments in the political front keep
affecting the economy all the time. works best under some regulative forces. Well-conceived
regulation can encourage competition and ensue fair markets for goods and services.
Thus, governments set up public policies to guide businesses that also limit business for the good
of society as a whole. Almost every business activity including marketing activities are subject to
laws and regulations.
6. Cultural Environment - Culture is a combination of religion, language, education and
upbringing. In every society some cultural values are deep rooted; they are termed as core
cultural values. They are very difficult to change. There are other cultural values, which may
change more easily. Meaningful inputs on such forces can be of great help to the firm in
designing their marketing strategies. Cultural factors affect how people think and how they
consume. So, marketers are keenly interested in the cultural environment. Usual practice by the
habit of the consumer in buying and selling products.

7. Legal Environment - Businesses have to operate within the bounds of the law of the land.
They must clearly understand the provisions of law and abide by them. In the last few years
much, new legislation has entered the statute books. Some of them are to abide by the
international laws.

 Are events completely beyond the direct control of the marketing manager.
 External environment – shapes the way business is done.

Competition
 Direct competition
 Substitute services
 Indirect competition
Laws and Government Regulations

 There are specific laws concerning how services and products can be advertised, how
contestants and sweepstakes must be structured, who can and cannot drink and much
more.
 Marketing must be performed within the bounds of these laws and government
regulations.

Economy

 Has an upward and downward trend had a major impact.

 Inflation, recession, and unemployment are three factors that periodically plague the
economies of most developed countries.

Technology

 Is a constant frontier of change.

 Technology that may provide competitive edge; internet, wifi services, travel info
delivery to mobile phones, podcasts, webcasts, online booking & reservations, etc.
 The impact of technology on customers; online banking, smart cards, in home
entertainment, etc.

Organizational Priorities & Goals

 Marketing needs to be weighed against competing priorities for resources.

  A new brochure might have to go head-to-head with a site on the web, a proposed sales
force against a new call center.

THE 7Ps of MARKETING MIX

What are the 7Ps of marketing?

Products/Services: How can you develop your products or services

Prices/Fees: How can we change our pricing model
Place/Access: What new distribution options are there for customers to experience our product,
e.g. online, in-store, mobile etc
Promotion: How can we add to or substitute the combination within paid, owned and earned
media channels
Physical Evidence: How we reassure our customers, e.g. impressive buildings, well-trained
staff, great website
Processes: Are there internal process barriers in the way to delivering the best customer value
People: Who are our people and are there skills gaps
Partners: Are we seeking new partners and managing existing partners well?

DIFINING THE 7’Ps of MARKETING

Product –
A product is the item offered for sale. A product can be a service or an item. It can be
physical or in virtual or cyber form.
Product marketing is the process of bringing a product to market and overseeing its
overall success by driving demand and usage. It involves promoting and selling a product
to a customer and it’s the intermediary function between product development and
increasing awareness.

Promotion –
promotion refers to any type of marketing communication used to inform target
audiences of the relative merits of a product, service, brand or issue, most of the time
persuasive in nature.

Promotion is a marketing tool, used as a strategy to communicate between the sellers

and buyers. Through this, the seller tries to influence and convince the buyers to buy
their products or services. It assists in spreading the word about the product or services or
company to the people.

Price –
Price is what the customer pays for the product or service.

Price is the amount that consumers will be willing to pay for a product. Marketers
must link the price to the product's real and perceived value, while also considering
supply costs, seasonal discounts, competitors' prices, and retail markup.

Place –
Place refers to where consumers buy your product, or where they discover it. Today's
consumers may learn about products and buy them online, through a smartphone app, at
retail locations, or through a sales professional.

The place is important in marketing because customers often buy items that are
convenient for them to purchase. Making a product available and accessible to
consumers in the correct location may increase the likelihood that they buy that product.

People –
People, in the marketing mix, refers to anyone directly or indirectly involved in the
business side of the enterprise. That means anyone involved in selling a product or
service, designing it, marketing, managing teams, representing customers, recruiting and
training.

The people are the connect between the customers and the enterprise where they interact
with the customers and market the products and create loyal customers for the enterprise.
They help in promoting the products and understanding the needs of the customers.

Process –
The marketing process refers to all the steps a company takes to analyze market
opportunities, identify a target customer, and create a multifaceted marketing strategy to
interact with those customers and qualify leads for the sales team.

A marketing process is: “A series of steps that allow organizations to identify

customer problems, analyze market opportunities, and create marketing materials
to reach the desired audience.
Physical Evidence –
Physical evidence. This refers to all existing and potential features customers see
when engaging with your business.

The physical evidence element of the marketing mix refers to the physical environment
experienced by the customer. This could include: the physical design and layout of the
premises. the layout of the company website.
The physical environment refers to the tangible, or material, objects and conditions
that surround a business.