Marketing in Hospitality

Week 1: Introduction: Marketing for Hospitality

and Tourism

Ms. Hoa Nguyen, MBA.

 Contact information

● Name: Nguyen Thi Hong Hoa

● Workplace: University of Finance - Marketing
● Tel: 0902 300 817
● Email: nthhoa@nttu.edu.vn
 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.
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.
 TABLE OF CONTENTS

01 04
Introduction about the course Designing Customer Value-Driven
Marketing Strategy

02 05
Marketing in the Hospitality Building customer relationships

03 06
Understanding the Marketplace Capturing value from customers
and Customer needs
07
Marketing’s Future
 01
Introduction about
the course
1. Course information

● Course name: Marketing in Hospitality (Marketing trong lĩnh vực khách sạn)
● Level of Training: Year 2
● Major: Hospitality Management
● Credits: 3
● Contact hours: 60 hours (Theory/Lecture + Practice)
 Course Description:
§ Provide the learners with a wide understanding of the role of marketing and its application in
the hospitality and tourism industries. It also helps the student to understand the marketing
contexts better in achieving the organisations goals and objectives and also to maximise
revenue and profit in a long term.
§ Provide students with an understanding of the key concepts and practices of marketing that are
applied in the tourism and hospitality industries. The module will evaluate different marketing
tools and techniques and their application in tourism and hospitality businesses. Students will
learn about the role of tourism and hospitality marketing in the public, private and third sectors
and in a variety of contexts including destinations, SMEs, transport and hotels.
 Learning Resources:
Ø Require textbooks:
§ Philip Kotler, John Bowen, James Makens 2021, Marketing for Hospitality and Tourism, 8th
Ed., Upper Saddle River, N.J; Pearson Prentice-Hall, 2021.
§ Alan Fyall, Patrick LegoHerel, Isabelle Frochot & Youcheng Want 2019, Marketing for
Tourism and Hospitality: Collaboration, Technology and Experiences , Routledge.
Ø Reference materials:
§ Reid R & D Bojanic 2016, Hospitality Marketing Management, 6th Ed., John Wiley & Sons
NewJersery
§ Hudson S & Hudson L 2017, Marketing for Tourism, Hospitality & Events: A Global & Digital
Approach, Sage Publishing.
§ Bowie D, Buttle F, Brookes M & Mariussen A, 2017, Hospitality Marketing, Routledge.
 2. Course topics

Week Topics Week Topics

Chapter 7: Customer Driven Marketing Strategy:

Chapter 1: Introduction: Marketing for Hospitality 7
1 Creating Value for Target Customers
and Tourism
Chapter 8: Designing and Managing Products and
Chapter 2: Service Characteristics of Hospitality and 8
2 Brands: Building Customer Value
Tourism Marketing
Chapter 9: Pricing: Understanding and Capturing
9
Chapter 3: The Role of Marketing in Strategic Customer Value
3
Planning Chapter 10: Marketing Channels: Delivering
10
Customer Value
4 Chapter 4: The Marketing Environment
Chapter 11: Engaging Customers and
11
Communicating Customer Value
Chapter 5: Managing Customer Information to Gain
5
Customers Insights 12 Chapter 11: Destination Marketing
Chapter 6: Consumer Markets and Consumer Buying
6 13,14,15 Presentation
Behavior
3. Course assessment

Assessment’s components Types of assessments Weight distribution

Attendance, quizze(s), groupwork(s),

Continuous assessment 20%
discussions, etc.

Mid-term assessment Individual assignment 30%

Final assessment Group project + presentations 50%

Letter
4-point Scale 10-point Scale 100-point scale Classification
Grade
A 4 8.5 – 10 85 – 100 Excellent

B 3 7.0 – 8.4 70 – 84 Very Good

C 2 5.5 – 6.9 55 – 69 Good

D 1 4.0 – 5.4 40 – 54 Ordinary

F 0 < 4.0 <40 Fail
 02
Marketing in the
Hospitality industry
 1. Importance of Marketing

• Purpose of a business: To create and maintain satisfied, profitable customers.

• Hospitality industry: Made up of those businesses that offer one or more of the following:
accommodation, prepared food and beverage service, and/or entertainment.
• Tourism marketing: two main industries that comprise the hospitality industries and travel
industries.
Ex: Free and Easy package, Leisure travel, Group travel,...
2 The functions of marketing
 3. Marketing process

• Marketing: the process by which companies create value for customers and build strong customer
relationships in order to capture value from the customers in return.

R S.T.P MM I C
Capture value
Design the Build
Understand the Constructing from
customer- profitable
marketplace, an integrated customers to
driven relationships
customer marketing create profit
marketing and create
needs & wants. programme and customer
strategy delight
equity

§ R : Research (Nghiên cứu) § P : Positioning (định vị thương hiệu)

§ MM : Marketing Mix (4Ps và 7Ps)
§ S: Segmentation (Phân khúc)
§ I: Implementation (Thực thi)
§ T: Target market (Thị trường mục tiêu) § C: Control (Kiểm soát).
 03
Understanding the
Marketplace
and Customer needs
 1. Customer Needs, Wants, and Demands

§ NEEDS - state of felt deprivation for basic items such as food and clothing and complex needs
such as for belonging.
i.e. I am thirsty
§ WANTS - form that a human need takes as shaped by culture and individual personality.
i.e. I want a Coca-Cola.
§ DEMANDS - human wants backed by buying power.
i.e. I have money to buy a Coca-Cola.
=> Understanding customer needs, wants, and demands in detail provides important input for
designing marketing strategies.
 2. Market offerings: Tangible products, services, experiences

§ Market offering: a product that is some combination of

tangible, services, information, or experiential product
components.
=> Combine PRODUCT with a tangible product or one
that has physical properties.
Ex: The hotel room + breakfast buffet in a restaurant
=> Combine PRODUCT with a intangible product
(customer service/experiences)
Ex: The hotel room + cleaning service / laundry service
The hotel room + night fishing tour
 3. Customer Value and Satisfaction

§ 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. Costs can
be both monetary and nonmonetary.
Ex: Online check in service => saving time.
§ Customer expectations: Expectations based on past
buying experiences, the opinions of friends, and market
information.
Marketers:
- Set the right level of expectations
- Not too high or too low
 4. Exchanges and Relationships and Market

Marketing occurs when people decide to satisfy needs and wants through exchange.
§ Exchange: The act of obtaining a desired object from someone by offering something in return.
=> Build and maintain desirable exchange relationships with target markets.
§ Transaction: Consists of a trade of values between two parties; marketing’s unit of
measurement.
=> Retain customers and grow their business with the company
§ The concept of transactions leads to the concept of a market. A market is a set of actual and
potential buyers of a product.These buyers share a particular need or want that can be satisfied
through exchange relationships.
 04
Designing Customer Value-
Driven Marketing Strategy
1. Marketing management

§ Marketing management: The art and science of choosing target markets and building
profitable relationships with them.
- The marketing manager’s aim is to find, attract, keep, and grow target customers by creating,
delivering, and communicating superior customer value.
- Maketing manager’s must answer 2 important questions:
1. What customers will we serve (what’s our target market)
2. How can we serve these customers best (what’s our value proposition)?
2. Marketing management orientations

Productionc
oncept

Societal Product
marketing concept
concept CONSUMER

Selling
Marketing concept
concept
 3.1 The Production Concept

Focus on the production concept is on the

quantity, not the quality of the products.
Businesses will want to produce widely cheap
products in maximum volumes to maximize
profitability and scale.
=> Success depends on low production costs,
highly efficient processes, and mass distribution.
Example:
- Some products are made in developing
countries and delivered to headquarter first
before being sent out to customers
- The Village Outlet in EU.
 3.2 The Product Concept
Focus on more on customers and how their
brand loyalty. This means customers are
looking for quality within a product:
innovative options and continuously seeking
out the best of what is currently available.
=> Success depends on creating the best, most
innovative product for the lowest price.

Example: Apple products: customer are looking forward to

their new gadgets and features upon launch
3.3 The Selling Concept

Based on selling products through large scale

marketing and promotional activities, it
doesn’t whether they fulfill customers’ needs
or not => Consumer will buy products only if
the company promotes/sells these product)
=> Success depends on a good sales team with
the right tools and incentives.
 3.4 The Marketing Concept

Focuses on the needs and wants of

target marketing as well as delivering
value better than its competition.
=> Success depends on doing better than
competitors at understanding, creating,
delivering, and communicating value
to their target customers.
Example: Modern-day competition between Pepsi and Coke who sell
similar items but their value propositions are completely different.
• Pepsi: Focuses on the younger generations
• Coke: Focuses on everyone in a more holistic approach

Source / Nguồn hình ảnh: Internet

3.5 The Societal Marketing Concept

Based on the welfare of the whole society

Þ Success depends on companies realize that they have a social and environmental
responsibility beside their short terms sales and profit goals.
 The Body Shop is a natural cosmetic, skincare, perfume
Airbnb aims #WeAccept Super Bowl ad at Company. Their uses plant-based ingredients to make its
refugees, immigrants. products and does not test products on animals.
 QUIZ

3/ Match the following:

1/ The terms 'need' and 'want' are used 1- Selling/ 2- Exchange/ 3-Marketing
interchangeably in the marketing literature.
A. To make what you can sell
A. True
B. False B. To sell what you can make
C. Essence of marketing.
2/ What goal of marketing that needs to study the
market first before putting up a business in a 4/ Match the following:
particular area? 1- Production Concept 2- Product Concept
A. Promote value transaction with full regard to 3- Selling Concept 4- Marketing Concept
the society.
A. Networking companies usually use this concept as their marketing approach.
B. Capture customer value to create profits.
C. Introduce and innovate product. B. This concept is looking forward to produce product or items with low
D. Understand the market and its consumers. cost/price.
C. This concept considers the needs of both customer and the product offered.
D. This concept believes that customer will always prefer for a product with
high quality.
4. Preparing an integrated Marketing plan

R S.T.P MM I C

Understand Capture value

Design the Build
the Constructing from
customer- profitable
marketplace, an integrated customers to
driven relationships
customer marketing create profit
marketing and create
needs & programme and customer
strategy delight
wants. equity

§ R : Research (Nghiên cứu) § P : Positioning (định vị thương hiệu)

§ S: Segmentation (Phân khúc)
§ T: Target market (Thị trường mục
tiêu)
§ MM : Marketing Mix (4Ps và 7Ps)
§ I: Implementation (Thực thi)
§ C: Control (Kiểm soát).
4. Preparing an integrated Marketing plan

§ The marketing mix is the combination of product, price, place and promotion for any
business venture.
§ Firms modify each element in the marketing mix to establish an overall brand
image and unique selling point that makes their products stand out from the competition.
 05
Building customer relationships
1. Customer relationship management

§ Customer relationship management

(CRM): It involves managing detailed
information about individual customers and
carefully managing customer “touch points”
in order to maximize customer loyalty.
=> CRM is the overall process of building
and maintaining profitable customer
relationships by delivering superior customer
value and satisfaction.
2. Customer Value and Satisfaction

§ Customer Value and Satisfaction: The key to building lasting customer relationships is
to create superior customer value and satisfaction => Satisfied customers are more likely to
be loyal customers and give the company a larger share of their business.

§ Customer-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.
=> To some consumers, value might mean sensible products
at affordable prices.
To other consumers, however, value might mean paying
more to get more.
Ex: Omakase sushi (limited-service restaurants)
2. Customer Value and Satisfaction

§ Customer satisfaction: The extent to which a product’s perceived performance matches a

buyer’s expectations.
- If the product’s performance fails short of expectations => the customer is dissatisfied.
- If performance matches expectations => the customer is satisfied.
- If performance exceeds expectations => the customer is highly satisfied or delighted.
2. Customer Value and Satisfaction

§ Customer relationship levels and tools:

Beyond offering consistently high value and satisfaction, marketers can use specific marketing tools to
develop stronger bonds with customers.
Example:
- Grab reward programs for customers.
- Airlines offer frequent-flyer programs, hotels give room upgrades to frequent guests
2. Engaging customers

Today’s digital technologies—the Internet and the surge in online, mobile, and social media
=> Profoundly changed the ways that people on the planet relate to one another.
=> Events have had a huge impact on how companies and brands connect with customers, and how
customers connect with and influence each other’s brand behaviors.
2. Engaging customers

§ Customer-engagement marketing: Fosters direct and continuous customer involvement in

shaping brand conversations, experiences, and community.
Example:
- Post latest ads and videos on social media sites (Twitter, YouTube, Facebook, Google+, Pinterest,...)
hoping they’ll go viral.
- Launching blogs, mobile apps, online microsites, and consumer generated review systems =>
engaging customers on a more personal, interactive level.
3. Partner relationship management

Marketers must also partner with suppliers, channel

partners, and others outside the company
§ Marketing channels consist of distributors, retailers,
and others who connect the company to its buyers
§ The supply chain describes a longer channel,
stretching from raw materials to components to final
products that are carried to final buyers.
=> Success at delivering customer value rests on how
well their entire supply chain performs against
competitors’ supply chains.
 06
Capturing value
from customers
1. Customer loyalty and retention

§ Lifetime value (LTV): the stream of profits a customer will create over the life of his or her
relationship to a business.
Lifetime Value = Average Value of Sale × Number of Transactions × Retention Time Period
Customer Lifetime Value = Lifetime Value × Profit Margin

Example: The average sale for the boutique clothing retailer, Bellissi, is $50, and the average
customer shops with them 3 times per year for two years. After calculating the cost of goods sold
(COGS), overhead, marketing, and all other administrative expenses, Bellissi’s profit margin is 20%.
Lifetime Value = $50 × 3 × 2 = $300
Customer Lifetime Value = $50 × 3 × 2 × 20% = $300 × 20% = $60
2. Growing share of customer

§ Share of customer: The portion of the customer’s purchasing that a company gets in its
product categories => To increase share of customer, firms can offer greater variety to
current customers
Examples: A coffee house can expand its selection of flavored teas and add smoothies. Or they
can create to cross-sell pastries and other snacks and/or up-sell from brewed coffee to blended
drinks.
2. Growing share of customer
 3. Building customer equity

§ Customer equity: The discounted lifetime values of all the

company’s current and potential customers.
The four categories of customers according to the Customer
Relationship Groups Model are:
- Butterflies: potentially profitable but not loyal. There is a good fit
between the company's offerings and their needs
True Friends: customers who are highly profitable and loyal
Strangers: customers who are neither loyal nor profitable
Barnacles: customers who are loyal but give little profit
=> Different types of customers require different relationship
management strategies. The goal is to build the right
relationships with the right customers.
 07
Marketing’s Future
§ Relationship marketing: Involves creating, maintaining, and enhancing strong
relationships with customers and other stakeholders.
§ 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.
 Group discussion

Choose three restaurant or hotel companies you have found on the Internet. Based on information
provided in each company’s Web site:
1. Describe how each of these companies tries to satisfy a customer’s wants.
2. How does each of these companies create value for the customer?
3. Do companies segment the market by offering pages for a specific market segment? For example, a
hotel may provide information for meeting planners, and a restaurant may provide information for
customers who are concerned about nutrition or families.
4. Select the company you would purchase from and state why.