CHAPTER ONE

1. INTRODUCTION TO HOSPITALITY AND TOURISM MARKETING

Marketing is so basic….
It cannot be considered as separate function. It is the whole business seen from
the point of view of its final result, that is, from the customer’s point of view…
Business success is not determined by the producer but by the customer.
— PETER DRUCKER
Today marketing isn’t simply a business function. It’s a philosophy, a way of thinking,
and a way of structuring your business and your mind. Marketing is much more than a
new ad campaign. Marketing’s task is to provide real value to targeted customers,
motivate purchase, fulfill consumer needs, and never fool the customer or endanger
the company’s image. Creating customer value and satisfaction are at the heart of
hospitality and travel industry marketing.
Today’s successful companies are strongly customer focused and heavily committed
to marketing. For instance, McDonald’s grew into the world’s largest restaurant chain
by providing its guests with QSC&V (quality, service, cleanliness, and value).
Successful hospitality companies know that if they take care of their customers,
market share & profits will follow. As a manager, you will be motivating your
employees to create superior value for your customers. You will want to make sure
that you deliver customer satisfaction at a profit. This is the simplest definition of
marketing.
Marketing, with its customer orientation has become the job of everyone, and YOUR
PASSPORT FOR SUCCESS!
Customer Orientation
Satisfied Customers
The purpose of a business is to create and maintain satisfied customers. Customers
are attracted /retained when their needs are met. Customers talk favorably to others
about their satisfaction. Some hospitality managers act as if today’s profits are
primary and customer satisfaction is secondary. This attitude eventually sinks a firm
as it finds fewer repeat customers and faces increasingly negative word of mouth.
Successful managers understand that profits are best seen as the result of running a
business well rather than as its sole purpose.
Satisfied, Profitable Customers
When a business satisfies its customers, they will pay a fair price for the product,
which includes a profit for the firm. Managers who forever try to maximize short-run
profits are short-selling both customer & company. Much of the behavior of
employees toward their customers is the result of management philosophy. The

1
alternative management approach is to put the customer first and reward employees
for serving the customer well.

Satisfied, Profitable, Repeat Customers

Without customers, assets have no value. It is wise to assess the customer’s long-
term value
and take appropriate actions to ensure a customer’s long-term support.

1.1.Marketing In Hospitality and Tourism

Sales and Marketing

In the hotel industry, marketing and sales are often thought to be the same. Sales
managers provide prospective clients with tours, entertaining them in the hotel’s food
and beverage outlets. The sales function is highly visible, where most areas of the
marketing function take place behind closed doors. It is not uncommon to hear
restaurant managers say that they “do not believe in marketing” .When they actually
mean they are disappointed with the impact of their advertising.
Advertising and sales are components of the promotional element of the marketing
mix. Other elements include product, price, and distribution, research, information
systems, and planning.
The four P’s framework calls for marketing to decide: Product (the product and its
characteristics), Price (set the price), Place (decide how to distribute the product), and
Promotion (choose methods for promoting the product). Some critics feel the four Ps
underemphasize or omit certain important activities.
If marketers do a good job of identifying consumer needs, developing a good product,
and pricing, distributing, and promoting it effectively, the result will be attractive
products and satisfied customers.
The marketing mix must be just that—a mix of ingredients to create an effective
product/service package for the target market. This does not mean that selling and
promotion are unimportant. They are part of a larger marketing mix, a set of marketing
tools that work together to produce satisfied customers. The only way selling and
promoting will be effective is if we first define customer targets and needs and then
prepare an easily accessible and available value package.
1.1.1 Definition of Marketing
Many people think of marketing only as selling and advertising, which is really only a
tip of the marketing iceberg. Today, marketing must be understood in a sense of
satisfying customer needs. If the marketer understands customer needs; develops
products that provide superior customer value; and prices, distributes, and promotes
them effectively, these products will be sought after by the customer.
2
Marketing is the art and science of finding, retaining, and growing profitable
customers.
Marketing has been defined as ‘the process of planning and executing the
conception, pricing, promotion, and distribution of ideas, goods, and services to create
exchanges that satisfy individual (customer) and organizational objectives.

1.1.2 The Marketing Process

Here are steps one through four of a simple five-step model of the marketing
process.As the first step, marketers needs to understand customer needs & wants,
and the marketplace
within which they operate. Companies working to understand consumers create
customer value & build strong customer relationships.

Value Creation for Customers

Capture Value
Understand the Design a Construct a Build profitable
from
market place customer driven marketing relationships
customers in
and customer marketing program that and create
return to
needs and strategy delivers customer
create profits
wants superior value delight

Figure 1.1: A five model of the marketing process

In the fifth, final step, companies reap the rewards of creating superior customer
value.By creating value for customers, they capture value from customers in the
form of sales, profits & long-term customer equity.
1.1.2.1 Understanding the Marketplace & Customer Needs
Core Concepts of Marketing
1. Customer Needs, Wants and Demands
The most basic concept underlying marketing is that of human needs. A human
need is a state of felt deprivation. These needs were not invented by marketers, but
are part of the human makeup.
The second basic concept to marketing is that of human wants, the form human
needs take as they are shaped by culture and individual personality. Wants are how
people communicate their needs. Wants are described in terms of objectives that
will satisfy needs.
People have almost unlimited wants, but limited resources, and so choose products
that produce the most satisfaction for their money.
→ When backed by buying power, wants become demands.
2. Products, Services, and Experiences

3
Consumer needs and wants are fulfilled through a market offering. A product that is
some combination of tangible, services, information, or experiential product
components. In the hospitality industry, the intangible product including customer
service and experiences are
more important than the tangible products. A market offering includes much more
than physical goods or services. Consumers decide which destinations to visit,
events to experience, hotels and restaurants to patronize. Managers of resorts
realize their guests will be leaving with memories of their stay, and try to create
experiences that will generate pleasant ones.

3. Customer Value and Satisfaction

Customer value is the difference between benefits the customer gains from owning
and/or using a product, and the costs of obtaining the product. Costs can be
monetary or nonmonetary & a very big nonmonetary costs for hospitality customers
is time. Limited service hotels provide value to the overnight traveler by offering a
free continental breakfast. Managers must know their customers and understand
what creates value for them.
Customer expectations are based on past buying experiences, the opinions of
friends, and market information. Marketers must set the right level of expectations.
If they set expectations too low, they may satisfy those who buy but fail to attract
new customers. If they set expectations too high and buyers will be disappointed.
Managers must realize the importance of creating highly satisfied, rather than just
satisfied customers.
4. Exchanges and Relationships
Exchange is the act of obtaining a desired object from someone by offering
something in return.
Marketing consists of actions taken to build and maintain desirable exchange
relationships with target markets. Beyond attracting new customers and creating
transactions, the goal is to retain customers and grow their business with the
company. A transaction is a trade of values between two or more parties. When the
exchange is made, it results into transaction. The concept of transactions leads to
the concept of a market.Relationship marketing:the process of creating, maintaining,
and enhancing strong value–laden relationships with customers and other
stakeholders.
5. Markets
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.

4
Marketing means managing markets to bring about profitable customer
relationships.
1.1.2.2 Designing Customer-Driven Marketing Strategy
A. Selecting Customers to Serve
Marketing management can be defined as the art and science of choosing target
markets and building profitable relationships with them.
To design a winning marketing strategy two important questions require answers:
What customers will we serve? (What is our target market)?
How can we serve these customers best? (What’s our value proposition)?
The company wants to select only customers that it can serve well and profitably.
B. Choosing a Value Proposition
A company’s value proposition is the set of benefits or values it promises to deliver
to consumers to satisfy their needs. Such propositions differentiate one brand from
another. The company must decide how it will serve targeted customers—how it will
differentiate and position itself in the marketplace. Companies must design strong
value propositions that give them the greatest advantage in their target markets.
C. Marketing Management Orientation
What philosophy should guide marketing strategies that will build profitable
relationships with target consumers? What weight should be given to the interests of
customers, the organization, and society? Often, these interests conflict with each
other.
There are five alternative concepts under which organizations design and carry out
their marketing strategies: production, product, selling, marketing, &societal
marketing concepts.
a. The Production Concept
One of the oldest philosophies guiding sellers, the production concept holds that
consumers will favor products that are available & highly affordable. Therefore
management should focus on production and distribution efficiency. Management
may become so focused on production systems they forget the customer.
b. The Product Concept
The product concept, like the production concept, has an inward focus. This concept
holds that consumers will favor products which offer the most in quality,
performance, and innovative features. Focusing only on the products can lead to
marketing myopia (that means lack of foresight or long-term view regarding the
product decision).
c. The Selling Concept
The selling concept holds consumers will not buy enough products unless the

5
organization undertakes a large selling and promotion effort. The aim is to get every
possible sale, not worry about satisfaction or the revenue contribution of the sale. It
does not establish a long-term relationship with the customer; the focus is on
getting rid of what one has. The concept exists within the hospitality industry, with
overcapacity being a major contributing factor. When owners & top management
face overcapacity, the tendency is to sell, sell, and sell.
d. The Marketing Concept
The marketing concept is a recent philosophy and is being rapidly adopted in the
hospitality industry. It holds that achieving organizational goals depends on
determining needs & wants of target markets and delivering the desired satisfaction
more effectively and efficiently than competitors. The pure marketing concept
ignores possible conflicts between short-run consumer wants & long-run societal
needs.

Starting Point Focus Means Ends

Factory Existing Selling and Profits through

Promoting Sales volume
P d t

The Selling Concept

Starting Point Focus Mean Ends

Market Customer Integrated Profits through

Needs Marketing Customer

The Marketing Concept

Figure 1.2: Contrast between selling concept and marketing concept

e. The Societal Marketing Concept
The newest concept, societal marketing, holds that the organization
should…determine the needs, wants & interests of target markets; and deliver
desired satisfactions more effectively and efficiently than competitors in a way that
maintains or improves the consumer’s
and society’s well-being.
It questions marketing concepts in an age of environmental problems, resource
shortages,
rapid population growth, worldwide inflation, and neglected social services. Societal
marketing asks if the firm that serves & satisfies individual wants is always doing
what’s
best for consumers and society in the long run. Advocates of societal marketing
6
would like public-interest groups to guide corporations to decisions that will benefit
society over the long term. Societal pressures are already manifested in the
marketing of cigarettes, liquor & fast-food.
Hotels & restaurants have no-smoking sections.
Restaurants can face liability for serving excessive alcohol.
Fast-food pursues environmentally sound packaging.
1.1.2.3 Preparing an Integrated Marketing Plan
The company’s marketing strategy outlines which customers the company will serve
and how it will create value for these customers. The marketer develops an
integrated marketing program that will actually deliver the intended value to target
customers. The marketing program builds customer relationships by transforming
the marketing strategy into action. It consists of the firm’s marketing mix, the
marketing tools the firm uses to implement its marketing strategy.
The Four P’s of Marketing: Product, Price, Place, and Promotion
To deliver its value proposition, the firm must first create a need-satisfying market
offering: Product. It must decide how much it will charge for the offer: Price, and
how it will make the offer available to target consumers: Place. Finally, it must
communicate with customers about the offer & persuade them of its merits:
Promotion. The firm must these into a comprehensive, integrated marketing
program that communicates and delivers the intended value to chosen customers.
1.1.2.4 Building Profitable Customer Relationships
The first three steps in the marketing process all lead up to the fourth and most
important step, that of building profitable customer relationships a company can
adopt any of three value-building tools to develop stronger customer relationships.
a. Value-Building Tools - Financial Benefits
The first relies primarily on adding financial benefits to the customer relationship.
For instance, Airlines offer frequent-flyer programs, Hotels give room upgrades to
their frequent guests, and Restaurants have frequent-diner programs…. Frequency
programs often used tiered programs.
b. Value-Building Tools - Social Benefits
The second approach is to add social as well as financial benefits, turning
customers into clients. Company personnel work to learn individual customers’
needs and wants. Products and services are individualized & personalized.
c. Value-Building Tools- Structural Ties
The third approach is to add structural ties to the financial and social benefits. For
instance, Airlines developed reservation systems for travel agents and lounges &
limo service for their first-class customers; Sheraton developed flexible check-in and

7
checkout times; Hilton provides a personalized welcome message on the guest’s
television….
Structural changes are difficult to implement, but they are harder for competitors to
match. They create a competitive advantage until they are matched.
Selective Customer Relationships
A company should develop relationships selectively, determining which customers
are worth cultivating. Because you meet their needs more effectively than others.
Customers who are high on profitability and frequency deserve management
attention. Customers those high on profitability but low on frequency can
sometimes be developed in higher frequency customers.
Low Frequency High Frequency
High Try to get these customers to come These are your best customers,
profitability more often. reward them.
Low These customers will follow Some of these guests have the
profitability promotions. Make sure your potential to become more
promotions make money. profitable.

Table 1.1: Types of Customers

Some customers are spreading their business across several different providers of
the same service. High-frequency, low-profitability customers, may be motivated by
the value of additional purchases. Hotels can show a business traveler advantages
to staying on the concierge floor where there is a lounge to work. If we can make our
company their preferred provider, we can turn them into our best customers.
Knowing your customers helps you select the customers you want to develop a
relationship with and to strengthen the relationship over time.
Customer relationship management (CRM) may be the most important concept of
modern marketing. It involves managing detailed information about individual
customers, carefully managing customer “touch points” in order to maximize loyalty.
CRM enables companies to provide excellent real-time customer service through
effective use of individualized information.
A customer touch point is any occasion a customer encounters the brand & product,
in actual experience, personal/mass communication or casual observation. For a
hotel this includes reservations, check-in & out, frequent-stay programs, room
service, business services, amenities, restaurants, and bars.
1.1.2.5 Capturing Value from Customers
Customer Loyalty and Retention
The final step in the marketing process involves capturing value in return, in the form
of current and future sales, market share, and profits.
Good CRM creates delighted customers, who remain loyal and talk favorably to
8
others about the company. Benefits of customer loyalty come from continued
patronage, reduced marketing costs, decreased price sensitivity, and partnership
activities. Loyal customers purchase from the business they are loyal to more often
than non-loyal customers.
Lifetime value is the stream of profits a customer will create in the life of a business
relationship. Average life is determined through surveys or guest history. It
measures how much a member of a market segment produces per year, multiplied
by the average life of a member of that segment.
Outstanding companies go all out to retain their customers.
Building Customer Equity
Customer equity is the discounted lifetime values of all the company’s current and
potential customers. The best approach to customer retention is to deliver products
that create high satisfaction and perceived value, resulting in strong customer
loyalty. The more loyal the firm’s profitable customers, the higher the firm’s
customer equity. Customer equity may be a better measure of a firm’s performance
than current sales or market share. Where sales & market share reflect the past,
customer equity suggests the future.
1.1.3 Tourism Marketing
Definition of Tourism
Tourism is a word with many meanings. Tourism is any activity, event or outcome
arising from temporary visits (stays away from home) outside the normal place of
residence, for any reason (purpose) other than furthering occupation remunerated
from within the place visited (Leonard J. Lickorish and Carson L. Jenkins,
1997).Individuals or groups that are travelling away from home requiring all
providers of activities, services, and industries that delivers a travel experience. E.g.
You and your family travelling to USA. It is the entire industry of travel (hotels,
transportation and other components) that serve the needs and wants of travelers.
The World Tourism Organization (WTO) defines tourism as follows: “Tourism
comprises the activities of persons traveling to and staying in places outside their
usual environment for not more than one consecutive year for leisure, business and
other purposes (Goeldner& Ritchie 2009: 4-7).
All tourism involves travel, yet not all travel is tourism. All vacation travel involves
recreation, yet not all tourism is recreation. All tourism occurs during leisure time,
but not all leisure time is spent on tourism activities (Mill & Morrison, 2002: 1).
Definition of a Tourist
To define a tourist is not a simple matter either; everybody is not the same. People
have different needs and motivations for travelling; they differ for example in

9
personalities and demographics, and these factors affects considerably on what
type of tourist is in question. The types of tourists can be classified in two basic
ways that relate to the nature of their trip. Are the tourists domestic or international
and what is the purpose of their visit?

The two main industries comprising the activities we call tourism are the hospitality
and travel industries. Successful hospitality marketing is highly dependent on the
entire travel industry. Many resort/hotel guests purchase travel-hospitality packages
assembled by wholesalers and offered through travel agents.
1.1.4 Hospitality Marketing
The word hospitality derived from the Latin word “Hospitare”, meaning “to receive as
a guest”. It refers to the relationship process between a guest and a host. To receive
as a guest implies to a host prepared to meet a guest’s basic requirements while
that guest is away from home. It is the act of kindness in welcoming and looking
after the basic needs of guests or strangers, mainly in relation to food, drink and
accommodation. Hospitality is the act or practice of being hospitable: the reception
and entertainment of guests, visitors or strangers with liberality or goodwill (Oxford
English Dictionary).
Hospitality refers lodging and food services (food and beverage) industries that
cover theme and amusement parks, entertainment outlets, cruise companies, E.g
Any F&B providers locally or overseas.
There are four sectors of the hospitality industry: food and beverage, lodging,
recreation, and travel and tourism.
A. Food and beverage industry: also known as the foodservice industry, consists of
businesses that preparefood for customers.
B. Lodging: also known as accommodation, is a place to sleep for one or more
nights. A business in the lodgingindustry provides a place for people to sleep
overnight. It can be one of many sleeping placessuch as a fancy hotel, a youth
hostel, an elder hostel, a campground, or highway side motel.
C. Recreation:is any activity that people do for rest, relaxation, and enjoyment. The
goal of recreation is to refresh aperson’s body and mind. Any business that
provides an activity for rest, relaxation, and enjoyment in order to refresh a
person’s body and mind is in the recreation business. There are four general types
of recreation businesses:entertainment, attractions, spectator sports, and
participatorysports.
D. Travel industry:is in the business of moving people from place to place while the
tourism industry provides those people with services that promote travel and
vacations. Busses, planes, cabs, boats, and passenger trains are all part of the
10
 travel industry while travel agencies, tour operators, cruise companies, convention
planners, and visitors bureaus are all part of the tourism industry.
Two Key Elements of Hospitality
a. For hospitality to be delivered, there must be some interaction between the
customer and service provider: without the customer, hospitality cannot be
delivered.
b. Hospitality consists of a complex mix of tangible and intangible elements of
products - food, drink, entertainment and accommodation – and the service and
atmosphere that surround them.
Career Opportunity Areas of Business
Hospitality Hotels
Restaurants
Bars, pubs, clubs, cafes
Holiday resorts and spa
Casinos /where gambling games are played/
Convention and conference centers
Shipping or cruise liners Catering /provide food and drink at a
social event/ and food service organizations
Tourism Travel agencies
Airlines
Tour wholesale companies
Convention or exhibition centers
Tour operators, Ecotourism operators
Tourism authorities, Government/ state tourism offices
Car rental organizations
Tourist information center
Tour guiding

1.2.Hospitality Marketing Environment

The marketing environment is made up of a micro environment and a
macroenvironment.
The Company’s Micro Environment
The microenvironment consists of factors close to the company that affect its ability
to serve its customers.
A. The Company Itself
Marketing managers must work closely with top management and the various
company departments. The finance department is concerned with finding & using
funds required to carry out the marketing plan. Accounting has to measure revenues
& costs to help marketing know how well it is achieving objectives. Housekeeping is
responsible for delivering clean rooms sold by the sales department.

11
B. Existing Competitors
The marketing concept holds, a successful company must satisfy the needs and
wants of consumers better than its competitors. Every company faces a broad range
of existing competitors. Marketers must adapt to the needs of their target
customers, and also to the strategies of other companies serving the same target
markets. Companies must gain strategic advantage by strongly positioning their
product in the minds of consumers.
Existing Competitors- Variables
A company should monitor three variables when analyzing each of its competitors:
→ Share of market: The competitor’s share of the target market.
→ Share of mind: The percentage of customers who named the competitor in
responding to the statement, “Name the first company that comes to mind in this
industry.”
→ Share of heart: The percentage of customers who named the competitor in
responding to the statement, “Name the company from whom you would prefer to
buy the product.”
C. Suppliers
Suppliers are firms & individuals providing resources needed by the company to
produce goods & services. Trends & developments affecting suppliers can seriously
affect a company’s marketing plan. It requires tracking changes in supply availability
& costs. Outsourcing food & beverage operations allows the hotel to concentrate on
lodging. Some hotels have contracted with restaurant companies to supply their
food &beverage services. Bringing branded restaurants to their hotels creates value
for their guests and exposes restaurant guests to the hotel.
D. Marketing Intermediaries
Marketing intermediaries help the company promote, sell, and distribute its goods to
the final buyers. Hospitality intermediaries include travel agents, wholesale tour
operators, and hotel representatives.
Marketing Intermediaries and Internet
The Internet has created both disintermediation and pricing transparency.
Disintermediation is the elimination of intermediaries. Hotels have created their own
Internet reservations systems, making them less dependent on travel agents and
other intermediaries.
Perishability of hotel rooms means that most hotels still need help from
intermediaries. It includes corporate travel departments, meeting planners, incentive
houses, and other distribution channels.
When hotels do sell to intermediaries who use the Internet, they have to consider

12
price transparency. For instance, if a group is given a rate of $229 per night &
members can book on the hotel Web site for $209, they may book online
Marketing Services Agencies
Marketing services agencies are suppliers that help formulate & implement
marketing strategy & tactics. These include public relations agencies, advertising
agencies, and direct mail houses. They work directly with the company’s marketing
program and also include marketing research, media, and marketing consulting
firms.
Financial Intermediaries
Financial intermediaries are banks, insurance and credit companies, and firms that
help hospitality companies finance transactions or insure risks. The company has to
develop strong relationships with important financial institutions.
E. Customers
The hospitality company needs to study five types of general customer markets
closely. That is, consumer, business, reseller, government, and international markets.
Consumer markets are individuals & households that purchase hospitality services
for leisure, medical needs & gatherings like reunions and weddings.
Business markets buy hospitality services to facilitate their business. For example,
individual rooms for travelers representing the company, group meetings the
company or organization may conduct or produce….
F. Publics
A public is any group that has an actual or potential interest in or impact on an
organization’s ability to achieve its objectives. We identify seven types:
Financial publics: Banks, investment houses, and stockholders to get funds.
Media publics: newspapers, magazines, radio and TV that carry news, features,
and editorial opinions.
Government publics: Marketers must often consult the company’s lawyers on
issues of product safety, truth in advertising, and other matters.
Citizen-action publics. A company’s marketing decisions may be questioned by
minority groups, consumer organizations, environmental groups, and others. Its
public relations department can help it stay in touch with consumer and citizen
groups.
Local publics are neighborhood residents & community organizations. Many
companies appoint a community relations officer to deal with the community,
attend meetings, answer questions & help worthwhile causes.
General public. A company needs to be concerned about the general public’s
attitude to its products & activities. The public’s image of the company affects its

13
 buying.
Internal publics include workers, managers, volunteers, and the board of directors.
Large companies use newsletters and other means to inform and motivate their
internal publics.
The Company’s Macro Environment
The company and all of the other actors operate in a larger macro environment of
forces that shape opportunities and pose threats to the company.
A. Future Competitors
Barriers to Entry, Exit and Competition
The entrance of future competitors is difficult to predict & can have a major effect
on a business. Two forces that affect the competition are the ability of companies to
enter and exit markets. Entry barriers prevent firms from getting into a business and
barriers to exit prevent them from leaving. Restaurant managers should always
manage as if there is strong competition even if there is none. The manager will be
prepared when competition arrives.
B. Demographic Environment
Demography is the study of human populations in terms of size, density, location,
age, gender, race, occupation, and other statistics. The demographic environment is
of major interest to marketers because it involves people, and people make up
markets. The most important demographic trend is the changing age structure of
the population.
C. Economic Environment
The economic environment includes factors affecting consumer purchasing power &
spending patterns. Marketers must pay close attention to major trends and
consumer spending patterns both across and within their world markets.
D. Natural Environment
The natural environment involves natural resources needed as inputs by marketers
or that are affected by marketing activities. Marketers should be aware of several
trends in the natural environment. The first involves growing shortages of raw
materials. A second environmental trend is increased pollution, as industry almost
always damages the natural environment. Hospitality companies must be good
corporate citizens and embrace corporate responsibility.
Sustainability
The natural environment consists of many amenities that attract tourists, such as
forests, clean beaches, pristine streams, wildlife, and clean air. Anyone involved in
tourism has an obligation to protect the environment and develop sustainable
tourism.

14
E. Technological Environment
The most dramatic force shaping our destiny is technology, which has given us
wireless Internet, the ability to send documents around the globe electronically &
inexpensive worldwide transportation. It has also released horrors as nuclear
missiles and products with mixed blessings, such as TV & the car.
Internet
Technology has also made communication easier. The Internet needs to be
monitored to see what others are saying about your business. Word-of-mouth is no
longer restricted to people we know but can be spread to large numbers of people
over the Internet. The Internet has had a profound effect on the hospitality and travel
industries. The Internet has created a new distribution channel for hospitality and
travel products. Today, over 60% of all travel bookings & over 40 % of all hotel
reservations are generated on the Internet. Hospitality companies are starting to
take advantage of this new medium by putting videos on YouTube. Marketers must
understand and anticipate changes in the technological environment and use
technologies that serve human needs.
F. Political Environment
Legislation and Regulation Affecting Business
Marketing decisions are strongly affected by developments in the political
environment. Laws, government agencies, and pressure groups that influence & limit
the activities of various organizations and individuals in society. Governmental
agencies have become involved in the investigation and regulation of everything
from fire codes to food-handling practices. Politicians also see travelers as good
sources of revenue because nonresidents spend money but cannot vote against
them. Hotel taxes and restaurant taxes have become popular sources of revenue for
local governments. In many cases hotel taxes are meant to support tourism.

1.3.Hospitality Marketing Mix

In essence, marketing mix is a combination of elements that require a

company’s attention when bringing a product or service to the market.The way in
which current and potential customers’ demands are satisfied depends on the
marketing mix of the organisation’s products and services. Traditionally 4 elements of
the mix – Product, Price, Promotion and Place. In the modern travel and tourism
industry it’s usual to look at 10 elements.
1. Product
The tourism product differs from other products due to the wide range it covers,
including such areas as accommodations, transportation, food, recreation and
attractions. Often the product includes intangibles such as history, culture and natural
15
beauty. Many times, the hospitality or tourism product is viewed as more of a “service”
in the customer’s eyes. The closer we can determine how to satisfy the customer’s
needs, the more successful the destination will be.
It includes:
Accommodation: bed, bedroom, cabin or suite, in a hotel, inn, chalet, apartment.
Food and beverage: a drink, sandwich, fast food, family meal, gourmet dinner,
Business services: a meeting, conference, communication bureau, in a hotel or
conference center
Leisure: a short break, domestic holiday or international holiday, in a hotel, resort,
self-catering accommodation, camping and caravan site, or a cruise.
2. Price
This refers to the amount customers pay for the product or service provided. A quality
tourism experience at a fair price is what the customer is looking for in most cases.
The pricing decisions a hospitality organization makes include:
 Setting the tariff, or rack rates
 Agreeing the level of discounts for key accounts
 Pricing all-inclusive packages (conferences, functions and leisure breaks)
 Developing special priced promotions to increase sales during low season periods.
3. Place
A unique set of distribution channels and travel trade intermediaries has developed in
tourism. The distribution mix is the combination of these offline and online channels
that a destination or tourism business selects to use. Because the choice of location
is the first and crucial marketing decision for hospitality companies, this text includes
location as one of the main elements of the marketing mix. Location decisions focus
on where the hospitality business should build, buy, franchise or rent the site(s) from
which it operates. The place where the customer buys the tourism product can vary
greatly. Travel agents, tour operators and tour wholesalers are a few examples of the
distribution points for tourism products. Look for new distribution points in which you
can sell your services. For example: web sites like Country-Adventures. com.
4. Packaging
Packages combine the services and products of several tourism organizations.
Because the tourism product often includes a variety of attractions, facilities and
services, packaging must also take on several different forms. A presentation of
products and/or services that would normally be purchased separately, but are
combined in a single purchase for the convenience of the consumer in ease, pricing,
etc...
5. Programming

16
It involves special activities like events, or other types of programs to increase
customer spending or to give added appeal to a package or other tourism service. It
generates new business, encourages repeat business, increases customer spending,
increases customer satisfaction, promotes off peak periods, etc…Effective
programming can provide an effective return on investment.

6. Promotion
Originally called ‘promotion’ and now popularly described as ‘Marcom’, marketing
communication covers all the tools that hospitality firms can use to communicate
with customers, employees and other stakeholders. This is the function of most
marketing and sales departments.
The key elements of marketing communications in hospitality are:
 Personal selling (the sales team)  Website design
 Print and publicity material (e.g.  Sales promotion
brochures)  Public relations
 Advertising  Merchandising
 Direct mail (or direct marketing  Sponsorship
effort)
7. Physical evidence or Physical environment
The physical environment (or physical evidence) consists of the tangible features of
the hospitality offer – the external appearance of the premises (the landscaping,
lighting and signage) and the internal layout (appropriate decor, furniture and
furnishings).
Intangible factors are intimately linked to physical evidence – the ambience or
atmosphere – and clearly the success of a hospitality product is dependent upon the
appeal of the physical environment to the customers.

8. Process
Because of the simultaneous production and consumption prevalent in hospitality
services, the processes through which customers buy and consume hospitality
products are crucial to marketers. Important processes include booking, checking in

17
and checking out, queuing systems and service operations. Marketers need to
ensure that the organization’s service delivery processes are efficient, customer
friendly and competitive.
9. People (Human Resources)
People’ includes both customers and employees. Hospitality is a service where the
interaction between customers and employees is also a critical element of the
customer experience. Marketing therefore needs to have an input into human
resources aspects of the operation, and this is called internal marketing.

10. Partnership
By forging partnerships with companies that share the same business objective, you
can better meet the overall demands of the tourism customer while sharing the total
marketing costs. Cooperative marketing programs involving two or more tourism
destinations or individual organizations.
Strategic Alliances- Two or more organizations that can benefit from each other’s
strengths. Example: A winery might form alliances with restaurants, many
attractions form alliances with hotels.
“Competition”- Cooperative efforts between competitive local or regional
organizations that enable them to compete effectively at the national and
international levels.

1.4. Implementing The Marketing Approach

After undertaking the situational analysis and identifying potential opportunities,

threats, strengths, and weaknesses, operational strategies are used by marketing
managers to implement actions that will move an organization from its current
position to where it wants to be. Such strategies allow the organization to match its
products and services to the relevant target markets, to the goals of sustainable
tourism, and to allocate resources to generate consumer demand for such products.
Translating sustainable tourism development goals and objectives into marketing
terms is a major undertaking that will affect the entire organization. This involves
determining any modifications that should be made to the organization’s existing
marketing activities and processes in order to ensure that day-to-day activities are
performed in a manner consistent with sustainable tourism objectives.
The key operational marketing strategies used during the implementation stage
include:
→ Target market strategy → Competitive strategy
→ Product strategy → Market strategy
18
 → Positioning strategy.
The principles of sustainable tourism can be incorporated into each of these
strategies in order to influence consumer behavior to being more sustainable.

19