The greatest of richness is the richness of the soul. Prophet Muhammad (Peace be upon him)
Idea Transcript
A SIXTH
E D I T I O N
Marketing for Hospitality and Tourism
Philip Kotler John T. Bo wen James C. Makens
PEARSON Boston Columbus Indianapolis New York San Francisco Upper Saddle River Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montreal Toronto Delhi Mexico City Sao Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo
Contents To the Student xiv Preface xix About the Authors xxi
PART I Understanding the Hospitality and Tourism Marketing Process 1
1
Introduction: Marketing for Hospitality and Tourism 3
YOUR PASSPORT TO SUCCESS 5 CUSTOMER ORIENTATION 7 WHAT IS HOSPITALITY AND TOURISM MARKETING? 9 MARKETING IN THE HOSPITALITY INDUSTRY 10 Importance of Marketing 10 Tourism Marketing 10 MARKETING HIGHLIGHT 11
Definition of Marketing 11 The Marketing Process 11 UNDERSTANDING THE MARKETPLACE AND CUSTOMER NEEDS 12 Customer Needs, Wants, and Demands 12 Market Offerings: Tangible Products, Services, and Experiences 13 Customer Value and Satisfaction 13 Exchanges and Relationships 14 Markets 14 DESIGNING CUSTOMER-DRIVEN MARKETING STRATEGY 15 Selecting Customers to Serve 15 Marketing Management Orientations 15 PREPARING AN INTEGRATED MARKETING PLAN 19 BUILDING PROFITABLE CUSTOMER RELATIONSHIPS 20 Customer Relationship Management 21 The Changing Nature of Customer Relationships 22 CAPTURING VALUE FROM CUSTOMERS 24 Customer Loyalty and Retention 24 Growing Share of Customer 25
What Is Customer Equity? 25 Building the Right Relationships with the Right Customers 26 Building Customer Equity 2 7 MARKETING'S FUTURE 27 KEY TERMS 27 CHAPTER REVIEW 28 DISCUSSION QUESTIONS 30 EXPERIENTIAL EXERCISES 30 INTERNET EXERCISES 30 REFERENCES 31
2
Service Characteristics of Hospitality and Tourism Marketing 35
THE SERVICE CULTURE 36 CHARACTERISTICS OF SERVICE MARKETING 37 Intangibility 37 Physical Evidence 38 Inseparability 38 Variability 39 Perishability 41 SERVICE MANAGEMENT CONCEPTS FOR THE HOSPITALITY INDUSTRY 42 The Service Profit Chain 42 Three Types of Marketing 42 MANAGEMENT STRATEGIES FOR SERVICE BUSINESSES 43 Managing Service Differentiation 43 Managing Service Quality 43 MARKETING HIGHLIGHT 44
Managing Service Productivity 45 Resolving Customer Complaints 45 MARKETING HIGHLIGHT: RECOMMENDATIONS FOR IMPROVING SERVICE QUALITY 46 Managing Employees as Part of the Product 48
NATURE OF HIGH-PERFORMANCE BUSINESS 62 Stakeholders 62 Processes 62 Resources. 63 Organization 64 CORPORATE STRATEGIC PLANNING: DEFINING MARKETING'S ROLE .64 Defining the Corporate Mission 65 Setting Company Objectives and Goals 67 Designing the Business Portfolio 67 MARKETING HIGHLIGHT: STARBUCKS COFFEE: WHERE GROWTH IS REALLY PERKING 70 MARKETING STRATEGY AND THE MARKETING MIX 72
Customer-Driven Marketing Strategy 72 Developing an Integrated Marketing Mix 74 MANAGING THE MARKETING EFFORT 75 Marketing Analysis 75 Goal Formulation 78 Market Planning 79 Implementation 80 Feedback and Control 80 UNIQUE CHALLENGES OF THE HOTEL INDUSTRY 81 KEY TERMS 82 CHAPTER REVIEW 83 DISCUSSION QUESTIONS 84 EXPERIENTIAL EXERCISES 85 INTERNET EXERCISES 85 REFERENCES 85
PART 11 Developing Hospitality and Tourism Marketing Opportunities and Strategies 87
LINKED ENVIRONMENTAL FACTORS 110 RESPONDING TO THE MARKETING ENVIRONMENT 111
Environmental Scanning 112 Using Information About the Marketing Environment 112 KEY TERMS 112 CHAPTER REVIEW 113 DISCUSSION QUESTIONS 114 EXPERIENTIAL EXERCISES 114 INTERNET EXERCISES 114 REFERENCES 114
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Marketing Information Systems and Marketing Research 119
MARKETING INFORMATION AND CUSTOMER INSIGHTS 121 THE MARKETING INFORMATION SYSTEM 122
Assessing Information Needs 123 Developing Marketing Information 123 Marketing Intelligence 129 MARKETING RESEARCH 131 Defining the Problem and Research Objectives 132 Developing the Research Plan
133
MARKETING HIGHLIGHT: ETHNOGRAPHIC RESEARCH: WATCHING WHAT CONSUMERS REALLY DO 135 MARKETING HIGHLIGHT: PROS AND CONS OF ONLINE RESEARCH 140 MARKETING HIGHLIGHT: A "QUESTIONABLE" QUESTIONNAIRE 143
Implementing the Research Plan 147 Interpreting and Reporting the Findings
147
THE COMPANY'S MICROENVIRONMENT 91
MARKETING HIGHLIGHT: RESEARCH PROBLEM AREAS 148 MARKETING HIGHLIGHT: HSMAI'S eCONNECT: A GREAT SOURCE OF MARKETING INFORMATION 149
The Company 91 Existing Competitors 91 Suppliers 93 Marketing Intermediaries 94 Customers 95 Publics 96 THE COMPANY'S MACROENVIRONMENT 96 Competitors 96 Demographic Environment 98
INTERNATIONAL MARKETING RESEARCH 150 MARKETING RESEARCH IN SMALLER ORGANIZATIONS 151 KEY TERMS 151 CHAPTER REVIEW 152 DISCUSSION QUESTIONS 153 EXPERIENTIAL EXERCISES 154 INTERNET EXERCISES 154 REFERENCES 154
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Contents
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Consumer Markets and Consumer Buying Behavior 157
A MODEL OF CONSUMER BEHAVIOR 158 PERSONAL CHARACTERISTICS AFFECTING CONSUMER BEHAVIOR 159 Cultural Factors 159 Social Factors 162 Personal Factors 166 MARKETING HIGHLIGHT: THE SAN DIEGO PADRES BASEBALL CLUB 169
Psychological Factors 170 THE BUYER DECISION PROCESS 174 Need Recognition 174 Information Search 175 Evaluation of Alternatives 176 Purchase Decision 177 Postpurchase Behavior 177 MARKETING HIGHLIGHT: UNIQUE ASPECTS OF HOSPITALITY AND TRAVEL CONSUMERS 178 KEY T E R M S 1 7 9 CHAPTER REVIEW 1 7 9 DISCUSSION QUESTIONS 180 EXPERIENTIAL EXERCISES 181 INTERNET EXERCISE 181 REFERENCES 181
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Organizational Buyer Behavior of Group Market 185
THE ORGANIZATIONAL BUYING PROCESS 186 Market Structure and Demand 186 Types of Decisions and the Decision Process 187 PARTICIPANTS IN THE ORGANIZATIONAL BUYING PROCESS 187 MAJOR INFLUENCES ON ORGANIZATIONAL BUYERS 188 Environmental Factors 189 Organizational Factors 189 Interpersonal Factors 189 Individual Factors 189 ORGANIZATIONAL BUYING DECISIONS 189 1. Problem Recognition 189 2. General Need Description 190 3. Product Specification 190 4. Supplier Search 190 5. Proposal Solicitations 190 6. Supplier Selection 190 7. Order-Routine Specification 191 8. Performance Review 191 GROUP BUSINESS MARKETS 191 Conventions 192 Association Meetings 193
Corporate Meetings 194 Small Groups 195 Incentive Travel 195 MARKETING HIGHLIGHT: GREEN MEETINGS: THE RIGHT THING TO DO FOR THE ENVIRONMENT AND BUSINESS 197
SMERFs 198 Segmentation of Group Markets by Purpose of the Meeting 198 Restaurants as a Meeting Venue 199 DEALING WITH MEETING PLANNERS 199 THE CORPORATE ACCOUNT AND CORPORATE TRAVEL MANAGER 201 KEY TERMS 202 CHAPTER REVIEW 202 DISCUSSION QUESTIONS 203 EXPERIENTIAL EXERCISE 203 INTERNET EXERCISE 204 REFERENCES 204
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Market Segmentation, Targeting, and Positioning 207
Requirements for Effective Segmentation 219 MARKET TARGETING 219 Evaluating Market Segments 219 Selecting Market Segments 220 Choosing a Market-Coverage Strategy 222 MARKET POSITIONING 222 Positioning Strategies 223 Choosing and Implementing a Positioning Strategy 224 Product Differentiation 225 Selecting the Right Competitive Advantages -228 Communicating and Delivering the Chosen Position 229 Positioning Measurement: Perceptual Mapping 230 KEY TERMS 231 CHAPTER REVIEW 231 DISCUSSION QUESTIONS 233 EXPERIENTIAL EXERCISE 233 INTERNET EXERCISE 233 REFERENCE 233
Contents
PART I I I Developing the Hospitality and Tourism Marketing Mix 235
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Designing and Managing Products 237
WHAT IS A PRODUCT? 239 PRODUCT LEVELS 240 Core Products 240 Facilitating Products 241 Supporting Products 241 Augmented Product 242 BRANDING STRATEGY 248 Building Strong Brands 248 Brand Equity 248 Brand Positioning 250 • Brand Portfolios 250 Managing Brands 251 THE NEW-PRODUCT DEVELOPMENT 252 Idea Generation 253 Idea Screening 255 Concept Development and Testing 255 Marketing Strategy 257 Business Analysis 257 Product Development 258 Test Marketing 258 MARKETING HIGHLIGHT: THE NATIONAL FOOD LABORATORY HELPS RESTAURANTS DEVELOP NEW PRODUCTS AND IMPROVE EXISTING PRODUCTS 259
INTERNAL MARKETING 274 MARKETING HIGHLIGHT: PINEHURST RESORT & COUNTRY CLUB "DO WHAT'S RIGHT" 275
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THE INTERNAL MARKETING PROCESS 276 Establishment of a Service Culture 276 Development of a Marketing Approach to Human Resources Management 280 Dissemination of Marketing Information to Employees 287 MARKETING HIGHLIGHT: INTERNAL MARKETING IN ACTION: LEWIS HOTELS 288
Employee Involvement in Product Selection
290
MARKETING HIGHLIGHT: THE FOUR SEASONS: TAKING CARE OF THOSE WHO TAKE CARE OF CUSTOMERS 291
Pricing Products: Pricing Considerations, Approaches, and Strategy 297
PRICE 299 FACTORS TO CONSIDER WHEN SETTING PRICES 299 Internal Factors Affecting Pricing Decisions 300 External Factors Affecting Pricing Decisions 304 Competitors' Prices and Offers 310 GENERAL PRICING APPROACHES 311 Cost-Based Pricing 311 Break-Even Analysis and Target Profit Pricing 312 Value-Based Pricing 313 Competition-Based Pricing 314 PRICING STRATEGIES 315 New-Product Pricing Strategies 315 Existing-Product Pricing Strategies 316 MARKETING HIGHLIGHT: SEGMENTED PRICING: THE RIGHT PRODUCT TO THE RIGHT CUSTOMER AT THE RIGHT TIME FOR THE RIGHT PRICE 320
SUPPLY CHAINS AND THE VALUE DELIVERY NETWORK 334 NATURE AND IMPORTANCE OF DISTRIBUTION SYSTEMS 334
Contents
NATURE OF DISTRIBUTION CHANNELS 335 Why Are Marketing Intermediaries Used? 335 Distribution Channel Functions 336 Number of Channel Levels 337 HOSPITALITY DISTRIBUTION CHANNELS 338 Major Hospitality Distribution Channels 338 Direct Booking 338 Online Travel Agencies (OTA) 339 Travel Agents 340 Tour Wholesalers 341 Specialists: Tour Brokers, Motivational Houses, and Junket Reps 342 Hotel Representatives 342 National, State, and Local Tourist Agencies 342 Consortia and Reservation Systems 343 Concierges 344 Restaurant Distribution Systems 344 CHANNEL BEHAVIOR AND THE ORGANIZATION 345 Channel Behavior 345 SELECTING CHANNEL MEMBERS 350 MARKETING HIGHLIGHT: RESTAURANT FRANCHISING 351
Customer Needs 352 Attracting Channel Members 352 Evaluating Major Channel Alternatives 352 RESPONSIBILITIES OF CHANNEL MEMBERS AND SUPPLIERS 353 BUSINESS LOCATION 354 KEY TERMS 356 CHAPTER REVIEW 357 DISCUSSION QUESTIONS 358 / EXPERIENTIAL EXERCISES 358 INTERNET EXERCISE 358 REFERENCES 358
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Promoting Products: Communication and Promotion Policy and Advertising 361
THE PROMOTION MIX 362 INTEGRATED MARKETING COMMUNICATIONS 363 The New Marketing Communications Landscape 363 The Shifting Marketing Communications Model 363 The Need for Integrated Marketing Communications 365 A View of the Communication Process 366 STEPS IN DEVELOPING EFFECTIVE COMMUNICATIONS 368 Identifying the Target Audience 368 Determining the Communication Objective 368 Designing the Message 370 Selecting Communication Channels 372
MARKETING HIGHLIGHT: THANK YOU-A GREAT PERSONAL COMMUNICATION 373
Selecting the Message Source Collecting Feedback 374
374
MARKETING HIGHLIGHT: JETBLUE USES CUSTOMERS AS A CREDIBLE SOURCE TO DELIVER MESSAGES: HTTP://WWW.JETBLUE.COM/ EXPERIENCE/ 375
SETTING THE TOTAL PROMOTION BUDGET AND MIX 376 Setting the Total Promotional Budget 376 MANAGING AND COORDINATING INTEGRATED MARKETING COMMUNICATIONS 378 The Nature of Each Promotion Tool 378 Promotion Mix Strategies 380 MARKETING HIGHLIGHT: HOW DOES AN ADVERTISING AGENCY WORK? 381
ADVERTISING 382 MAJOR DECISIONS IN ADVERTISING 382 Setting the Objectives 382 Setting the Advertising Budget 384 Developing Advertising Strategy 386 Creating the Advertising Message 386 Choosing Among Major Media Steps 392 Evaluating Advertising Effectiveness and the Return on Advertising Investment 395 KEY TERMS 396 CHAPTER REVIEW 396 DISCUSSION QUESTIONS 398 EXPERIENTIAL EXERCISES 399 INTERNET EXERCISE 399 REFERENCES 399
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Promoting Products: Public Relations and Sales Promotion 403
PUBLIC RELATIONS 404 MARKETING HIGHLIGHT: TACO BELL PROVIDED EXAMPLE OF CREATIVE PUBLICITY 405
MAJOR ACTIVITIES OF PR DEPARTMENTS 405 Press Relations 405 Product Publicity 406 Corporate Communication 406 Lobbying 406 Counseling 406 PUBLICITY 406 MARKETING HIGHLIGHT: A CREATIVE EXAMPLE OF PUBLICITY FROM CASINO MOGUL STEVE WYNN 407 T H E P U B L I C R E L A T I O N S PROCESS 4 0 8
Research 408 Establishing the Marketing Objectives 408 Defining the Target Audience 410 Choosing the PR Message and Vehicles 410 Publications 410
Contents Implementing the Marketing PR Plan 412 Evaluating PR Results 412 PR OPPORTUNITIES FOR THE HOSPITALITY INDUSTRY 413 Individual Properties 413 Build PR Around the Owner/Operator 413 Build PR Around Location 414 Build PR Around a Product or Service 414 CRISIS MANAGEMENT 415 SALES PROMOTION 416 Setting Sales Promotion Objectives 417 Selecting Sales Promotion Tools 417 Finding Creative Ideas 421 Developing the Sales Promotion Program 423 Pretesting and Implementing the Plan 424 Evaluating the Results 424 LOCAL STORE MARKETING 424 KEY TERMS 426 CHAPTER REVIEW 426 DISCUSSION QUESTIONS 427 EXPERIENTIAL EXERCISE 428 INTERNET EXERCISE 428 REFERENCES 428
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Professional Sales 431
MANAGEMENT OF PROFESSIONAL SALES 433 NATURE OF HOSPITALITY SALES 433 Competitive Analysis and Competitive Sets 435 SALES FORCE OBJECTIVES 436 Sales Volume 436 Upselling and Second-Chance Selling 436 Market Share or Market Penetration 437 Product-Specific Objectives 438 SALES FORCE STRUCTURE AND SIZE 438 Territorial-Structured Sales Force 439 Market-Segment-Structured Sales Force 439 Market-Channel-Structured Sales Force 440 Customer-Structured Sales Force 440 Combination-Structured Sales Force 440 Sales Force Size 441 Telephone Sales 443 ORGANIZING THE SALES DEPARTMENT 443 Inside Sales Force 444 Field Sales Force 445 Team Sales 446 RELATIONSHIP MARKETING AND STRATEGIC ALLIANCES 446 RECRUITING AND TRAINING A PROFESSIONAL SALES FORCE 448 Importance of Careful Selection 448 Establishing a Profile of Desired Characteristics Matching the Corporate Culture 448
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Matching Career Acquisitions with Corporate Objectives 449 MARKETING HIGHLIGHT: CODE OF ETHICS AND BUSINESS CONDUCT 449
Sales Force Training 450 MANAGING THE SALES FORCE 452 Selecting Sales Strategies 453 Sales Force Tactics: Principles of Personal Selling 455 MARKETING HIGHLIGHT: IDENTIFYING AND QUALIFYING CLIENTS PAYS OFF FOR CRUISE LINE SALESPEOPLE 457
Motivating a Professional Sales Force 460 Evaluation and Control of a Professional Sales Force 462 KEY TERMS 465 CHAPTER REVIEW 465 DISCUSSION QUESTIONS 466 EXPERIENTIAL EXERCISE 467 INTERNET EXERCISE 467 REFERENCES 467
1
Direct and Online Marketing: Building Customer Relationships 471
DIRECT MARKETING 472 Growth and Benefits of Direct Marketing 472 CUSTOMER DATABASES AND DIRECT MARKETING 476 Database Uses 476 DIRECT MARKETING BUILDS RELATIONSHIPS 479 Benefits of Customer-Relationship Management 481 TRADITIONAL FORMS OF DIRECT MARKETING 482 Direct-Mail Marketing 482 Telephone Marketing 483 Kiosk Marketing 483 DIGITAL DIRECT-MARKETING TECHNOLOGIES 484 E-Mail 484 Mobile Phone Marketing 486 Podcasts and Vodcasts 487 Interactive TV 487 Online Marketing Domains 487 SETTING UP AN ONLINE MARKETING PRESENCE 490 Creating a Web Site 490 Placing Ads and Promotions Online 491 The Promise and Challenges of Online Marketing 494 MARKETING HIGHLIGHT: HOW HOSPITALITY COMPANIES USE SOCIAL MEDIA 495
THE GLOBALIZATION OF THE TOURIST INDUSTRY 506 IMPORTANCE OF TOURISM TO A DESTINATION'S ECONOMY 508 The Tourism Destination 508 Benefits of Tourism 508 Management of the Tourist Destination 509 Sustainable Tourism 511 TOURISM STRATEGIES AND INVESTMENTS 513 MARKETING HIGHLIGHT: BETTING ON A NEW HIGHWAY 5 1 4 Tourist Events and Attractions 515 Attractions 517 SEGMENTING AND MONITORING THE TOURIST MARKET 520 Agri tourism 522 Space Tourism 523 Multiday Hiking and Religious Pilgrimages 523 Volunteer Vacationing 524 Medical Tourism 524 Genealogical Tourism 525 Identifying Target Markets 525 , Self-Contained Attraction and Event Destinations 526 Classification of Visitor Segments 527 Monitoring the Tourist Markets 528 MARKETING HIGHLIGHT: TOURISM REBOUND—AFTER THE LONDON RIOTS 529 COMMUNICATING WITH THE TOURIST MARKET 530 Competition for Visitors Involves Image Making 530 Effectiveness of Current Advertising/ Promotion 531 UNESCO World Heritage Sites 531 Developing Packages of Attractions and Amenities 531 ORGANIZING AND MANAGING TOURISM MARKETING 533 National Tourism Organizations 533 Regional Tourist Organizations: State Associations and Convention and Tourist Bureaus 535 KEY TERMS 536 CHAPTER REVIEW 537 DISCUSSION QUESTIONS 538 EXPERIENTIAL EXERCISE 538 INTERNET EXERCISE 538 REFERENCES 538
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Next Year's Marketing Plan 541
PURPOSE OF A MARKETING PLAN 543 SECTION I: EXECUTIVE SUMMARY 544 SECTION II: CORPORATE CONNECTION 545 Relationship to Other Plans 545 Marketing-Related Plans 545 Corporate Direction 546 SECTION III: ENVIRONMENTAL ANALYSIS AND FORECASTING 546 Positioning Statement 546. Major Environmental Factors 547 Economic Drivers of Growth 547 Competitive Analysis 548 Market Trends 548 Market Potential 549 Market Research 550 MARKETING HIGHLIGHT: THE INDIGO PEARL RESORT: FACEBOOK STRATEGY AND PLANNING THE INDIGO PEARL 551 S E C T I O N IV: S E G M E N T A T I O N A N D T A R G E T I N G 5 5 3 Segmentation Analysis 553 Market-Segment-Profitability Analysis (MSPA) 553 Targeting 554 SECTION V: NEXT YEAR'S OBJECTIVES AND QUOTAS 554 Objectives 554 Rating System Objectives 555 Quotas 557 Communicating the Plan 557 Top Management 557 Board of Directors or Group of Investors 557 Subordinates 557 Vendors 558 Other Departments 558 SECTION VI: ACTION PLANS: STRATEGIES AND TACTICS 559 Nonqualified Audience: Cluster Marketing 559 Sales Strategies 560 Distribution Strategies 560 Advertising and Promotion Strategies 561 Pricing Strategies 562 Product Strategies 563 SECTION VII: RESOURCES NEEDED TO SUPPORT STRATEGIES AND MEET OBJECTIVES 563 Personnel 564 Other Monetary Support 564 Research, Consulting, and Training 564 Miscellaneous Costs 564 Budgets 564 SECTION VIII: MARKETING CONTROL 565 Sales Objectives 565 Sales Forecast and Quotas 565
Contents Expenditures Against Budget 566 . Periodic Evaluation of All Marketing Objectives 567 Marketing Activity Timetable 567
INTERNET EXERCISE 571 REFERENCES 571
Readjustments to Marketing Plan 567
Appendix A: The Five-Gap Model of
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SECTION IX: PRESENTING AND SELLING THE PLAN 567 SECTION X: PREPARING FOR THE FUTURE
568 Data Collection and Analysis 568 . Marketing Planning as a Tool for Growth 568 KEY TERMS 569
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Service Quality
573
Appendix B: Forecasting Market Demand 577 Case Studies 584