Revision

Marketing
Final Examination
Claire Harris

C. Harris
 The Role of Marketing
• The key objective of an organisations
Marketing efforts is to develop satisfying
relationships with guests that benefit both
the guest and the organisation.
• Marketing is responsible for most tasks
that bring revenue and hopefully profits to
an organization.
 The Role of Marketing
• Marketing is the area of the business that
interacts most frequently with the public.
• Therefore what the public knows about an
organisation is determined by their interactions
with marketers.
• The Marketing department must act as a guide
and lead the hotel’s other departments in
developing, producing, fulfilling and servicing
products or services for their guests.
 The Role of Marketing
• Communication is vital. The marketing
department typically has a better understanding
of the market and guest needs, but should not
act alone.
• It is important that the marketing department get
input from many people within the company. Not
only does providing input help the rest of the
company understand and support the marketing
efforts, it also provides some invaluable insights
into what guests want and new ideas that may
have slipped past the rest of the company.
 The Role of Marketing
• Because the goals and guidelines set by the marketing
department should, by design, be in line with the vision
and mission of the company, upper management should
be involved in and endorse cooperation by all
departments in following and implementing the plan and
integrating a consistent message into all communication
channels.
• If this isn't the case, the efforts to market the company's
products will fail. It's that simple.
• Reinforce the idea among your employees that
marketing is a team effort. Individuals may have their
own goals and priorities, but if they don't also consider
the goals and greater need of the company, they may
hinder efforts and make your carefully planned marketing
efforts fail.
 The Role of Marketing
• So, the marketing department studies the
market and the customers
• Determines the best way to reach those
customers
• Works with the rest of the company to help
determine the new product needs of the
market
• Represents the company in a consistent
voice.
 Definition of Marketing Mix
“The mixture of controllable marketing
variables that the firm uses to pursue the
sought level of sales in the target market.”

Kotler
 Product
• A product is anything that can be offered
to a market for attention, acquisition, use
or consumption that might satisfy a want
or need
• Includes physical objects, services,
places, organizations, and ideas
 Product Levels
• Core Product

• Facilitating Products

• Supporting Products

• Augmented Product

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 Core Product
• What the buyer is really buying

• Every product is a package of problem-

solving services

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 Facilitating Products
• Goods or services that must be present for
the guest to use the core product

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 Supporting Products
• Extra products offered to add value to the
core product and help to differentiate it
from the competition

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Product Life-Cycle Strategies
• Product development
• Introduction
• Growth
• Maturity
• Decline
 Product Development

• Product development begins when the

company finds and develops a new
product idea

• During development, sales are zero and

the company’s investment costs add up
 Introduction
• Introduction is a period of slow sales
growth as the product is being introduced
into the market
• Profits are nonexistent at this stage due to
high product introduction expenses
– Research and development costs
– High marketing costs to test the market,
launch promotion and set up distribution
channels
 Growth
• Growth is a period of rapid market acceptance and
increasing profits
• Profits arise due to an increase in output
(economies of scale)and possibly better prices.
• At this stage, it is cheaper for businesses to invest
in increasing their market share as well as enjoying
the overall growth of the market.
• Accordingly, significant promotional resources are
traditionally invested in products that are firmly in
the Growth Stage.
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 Maturity
• Maturity is a period of slowdown in
sales growth because the product has
achieved acceptance by most of its
potential buyers

• Profits level off or decline due to

increased marketing outlays to defend
the product against competition
 Decline
• Decline is the period the market is shrinking.
Sales fall off quickly and profits drop
• At this stage, great care has to be taken to manage the product
carefully.
– It may be possible to take out some production cost
– To transfer production to a cheaper facility
– Sell the product into other, cheaper markets.
• Care should be taken to control the amount of stocks of the
product.
• Ultimately, depending on whether the product remains
profitable, a company may decide to end the product.
 Price
• Price is the amount of money charged for a good or
service

• The only marketing mix element that produces

revenue

• Arguably the most important element of the marketing

mix. Yet managers continually make errors in pricing
strategies which can lead to business failure.

• Price too high=Chases away potential customers

• Price too low =Revenue too low to maintain operation
 Cost based pricing
• With cost based pricing methods, no
account is taken of market requirements
but a set amount is added to the costs.
 Value based pricing
• Value based pricing, or Value optimized
pricing is a business strategy. It sets
selling prices on the perceived value to the
customer, rather than on the actual cost of
the product, the market price, competitors
prices, or the historical price
 Competition based pricing
• There are two types of competition based
pricing methods:
• Going rate or market pricing: Charging the
same as competitors or the market leader.
• Destroyer or destructor pricing: Charging a
price below average to drive out
competition.
 Prestige pricing
• The strategy of consistently pricing at, or near,
the high end of the possible price range to help
attract status-conscious consumers.
• People will buy a premium priced product
because:
– They believe the high price is an indication of good
quality;
– They believe it to be a sign of self worth - "They are
worth it" - It authenticates their success and status - It
is a signal to others that they are a member of an
exclusive group;
– They require flawless performance in this application -
The cost of product malfunction is too high to buy
anything but the best - example : Honeymoon.
 Market skimming pricing
• Charge a high price because you have a
substantial competitive advantage.
However, the advantage is not
sustainable. The high price tends to attract
new competitors into the market, and the
price inevitably falls due to increased
supply.
 Market penetration pricing
• The price charged for products and
services is set artificially low in order to
gain market share. Once this is achieved,
the price is increased.
 Promotion

• A good product at a good price is not

enough. Promotion is required.

• Promotion is communication used by

marketers to inform, remind, or persuade
potential buyers
 Promotion Mix

• A promotion mix is a company’s total

marketing communications program
and it consists of a specific blend of:

– Advertising
– Sales Promotions
– Public Relations
– Personal Selling
 Promotion and the Product Life
Cycle
• In different stages of the Product Life Cycle you
need different promotional strategies.
• Introduction – Build awareness among early
adopters, dealers and resellers
• Growth – Build awareness and interest in the
mass market
• Maturity – Stress brand differences and benefits
• Decline - Reduce to level needed to retain hard-
core loyalists
 Introduction
• High level of advertising to get the product
known
• Sales Promotion to encourage people to
try the new product
• Public Relations to dramatize the product
• Personal selling to wholesalers and retail
agents
 Growth
• High level of advertising to make the mass
market aware of the product
• Public Relations to build interest in the
product
• Reduce expenditures on sales promotion
to take advantage of consumer demand
 Maturity
• Increase sales promotion to encourage
brand switching
• Direct Marketing to encourage repeat
business
• Advertising to remind people that you still
exist
 Decline
• Advertising – Reduce to level needed to
retain hard-core loyalists
• Sales Promotion – Reduce to minimal
level
 Place
• Place can be the hotel itself but it also
includes the distribution channels that are
used to sell the product to the consumer.

• A distribution channel is a set of

independent organizations involved in the
process of making a product or service
available to the consumer or business
user
 Distribution channels
• Hotels use intermediaries to move the
guest to the hotel.
• The different channel levels are:
– Direct marketing channel

– Retailer

– Wholesaler
 Direct Marketing Channel
• Hotels sell their rooms to guests directly
either through their web sites or by
advertising.
 Retailer
• Sometimes hotels sell their rooms through
a travel agent.
• The travel agent does not commit to buy
rooms, just books when they have
demand.
 Wholesaler
• Many hotels sell their rooms through a tour
operator.
• The tour operator then either sells the
rooms directly to the guest or via a travel
agent.
 Marketing Research
• Marketing research is a process that
identifies and defines marketing
opportunities and problems, monitors and
evaluates marketing actions and
performance, and communicates the
findings and implications to management
Marketing Research Process
1. Define the problem and research
objectives

2. Develop the research plan

3. Implement the research plan

4. Interpret and report the findings