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III 14 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Promoting Products: Public Relations and Sales Promotion Foreword: There are many misconceptions about public relations. One of the most widespread is that it’s easy. -Peter Celliers- III 14 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 OBJECTIVES After reading this chapter, you should be able to: • Understand the different public relations activities: press relations, product publicity,corporate communications,lobbying, and counseling. • Understand the public relations process: research, establishing marketing objectives, defining the target audience, choosing the PR message and vehicles, and evaluating PR results. • Explain how companies use public relations to communicate and influence important publics. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens III 14 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 OBJECTIVES After reading this chapter, you should be able to: • Explain how sales promotion campaigns are developed and implemented. • Implement a crisis management program in a hospitality business. III 14 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Public Relations and Sales Promotion The Space Race • The launch of Sputnik I in 1957 started a series of successes for the Soviet Union’s space program. III – which became propaganda vehicles promoting the achievements and advantages of communism • President Kennedy used the “space gap” between the US and the Soviet Union to claim that Republicans had let the Soviet Union pass the United States. – after Kennedy’s 1960 election, the US program had shortlived success with Shepard & Grissom’s suborbital flights • Soviet Gherman Titov’s July 1961, 17-orbit mission made suborbital flights look like child’s play. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 14 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Public Relations and Sales Promotion The Space Race • Eager to build US pride, NASA announced that John Glenn would be America’s first person to orbit Earth. III – he was well known to most Americans as a pilot in WWII & Korea, and a 1957 cross-continent flying speed record • As a result, Glenn was invited to appear on two TV shows, and was the most publicized US astronaut. • It was America’s first attempt at an orbital flight with America’s most publicized astronaut, and NASA’s publicity machine set the stage for the event. • Over 100 million people were expected to watch the televised launch of Friendship 7, a result of the hype. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 14 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Public Relations and Sales Promotion The Space Race & Marriott • Bud Grice, a Marriott sales manager, thought about all the people expected to watch the launch. III – what a great way to expose Americans to Marriott • Grice knew that Marriott could not afford television ads, but the idea intrigued him. – if only Marriott could communicate with an audience of that size! • On February 20, 1962, 135 million Americans watched Glenn take off on his five-hour flight. – Grice was one of them, still thinking about opportunities created by so many people watching a single event Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 14 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Public Relations and Sales Promotion The Space Race & Marriott • Once the flight was off, cameras switched to Glenn’s residence in the D.C. suburb of Arlington, Virginia. III – not too far from Marriott’s corporate headquarters • There were scores of reporters there, the area was a beehive of activity, and Grice saw his opportunity. – he put buckets of fried chicken with large Marriott labels in a station wagon and had them delivered to Mrs. Glenn • The Marriott vehicle pulled up in front of the home, and the Marriott containers were soon seen by an estimated 100 million Americans still watching television. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 14 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Public Relations and Sales Promotion The Space Race & Marriott • After the flight, Glenn stated he was looking to time with his family & would like to stay at a Marriott hotel because they were so good to his wife. • Marriott had another PR opportunity, inviting Glenn to stay in a complimentary Marriott suite. III – and received additional publicity when the press followed Glenn into the Marriott 14 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Public Relations and Sales Promotion The Space Race & Marriott • This story illustrates several uses of public relations. – First, we are shown how governments use events to promote their ideologies – Second, we see how public relations can be planned to take advantage of opportunities III • Grice created an event, serving lunch to Mrs. Glenn, to expose millions of viewers to the Marriott name. • By being aware of Glenn’s desire to stay in a Marriott hotel, Marriott gained additional publicity from the event. 14 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Public Relations Defined • Definitions for public relations differ widely, but the definition by Hilton International may best fit the hospitality industry. III – “The process by which we create a positive image and customer preference through third-party endorsement.” • Public relations (PR) is an important tool that until recently was treated as a marketing stepchild. – PR is moving into an explosive growth stage • Companies are realizing that mass marketing is no longer the answer to some of their communication needs. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 14 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Public Relations Promise • Advertising costs continue to rise, audience reach continues to decline, and clutter reduces ad impact. • Sales promotion costs have increased as channel intermediaries demand lower prices and better commissions & deals. • Personal selling can cost over $500 a call. • In this environment, public relations holds promise as a cost-effective promotional tool. – creative use of news events, publications, social events, and other PR techniques offer a way to distinguish companies and their products from their competitors Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab III 14 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Public Relations Introduction • The PR department is typically located at corporate headquarters, with staff is so busy dealing with various publics that PR support for marketing objectives tends to be neglected. III – many chains have corrected this by hiring local PR managers • In the past it was common for the marketing function and PR function to be handled by two different departments within the firm. – today these two functions are increasingly integrated 14 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Major Activities of PR Departments Activities • PR departments perform five activities, not all of which feed into direct product support. – Press Relations - placing newsworthy information in the media to attract attention to a person, product, or service – Product Publicity - efforts to publicize specific products – Corporate Communication - internal & external communications and promoting understanding of the organization – Lobbying - dealing with legislators and government officials to promote or defeat legislation & regulation – Counseling - advising management about public issues and company positions and image Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab III 14 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 III See this feature on page 397 of your textbook. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 14 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Publicity Description • Publicity is the task of securing editorial and news space, as opposed to paid space, in print & broadcast media to promote a product or a service. III – a direct function of public relations • One use is to assist in the launch of new products. • Publicity is also used with special events. • Companies can use publicity to build a positive image with specific target markets or stakeholders. • Publicity is also used to defend products that have encountered public problems. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 14 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 The Public Relations Process Introduction • Publicity builds corporate image in a way congruent with the organization’s communication strategy. III – effective PR is the result of a process integrated with the firm’s marketing strategy • A misconception about PR and publicity is that quantity is more important than quality. – some firms measure success by the number of articles placed in media • As in other marketing efforts, public relations should be meaningful to the target market. 14 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 The Public Relations Process Steps • The PR process consists of familiar steps: – – – – – – III research establishing the market objectives defining the target audience choosing the PR messages and vehicles implementing the PR plan evaluating the results 14 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 III See this feature on page 400 of your textbook. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 14 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 PR Opportunities for the Hospitality Industry Individual Properties • Public relations are the most important promotional tool available to entrepreneurs & individual properties. • Employees should be trained to look for PR opportunities. III 14 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 PR Opportunities for the Hospitality Industry The Owner/Operator • The owner/operator and the enterprise itself often become one and the same in the minds of customers. III – this strategy holds dangers, such as the death of the owners, but benefits usually exceed risks • Individuals successful at promoting themselves often use theatrical costumery. – such as Ken Hamblin, an African American columnist & talk show host, who is never seen without a hat • Dozens of personal characteristics have been used successfully to build memorable personalities. 14 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 PR Opportunities for the Hospitality Industry Location • Some restaurants and B&B’s are almost impossible to find, normally the kiss of death in hospitality. III – hundreds of owners/operators of these enterprises have used isolation & obscurity as a PR tactic • A San Francisco restaurant directly under a freeway that collapsed during an earthquake was featured on national TV as the little restaurant that refused to succumb to an earthquake. 14 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 PR Opportunities for the Hospitality Industry A Product or Service • Wall Drug Store is a major tourist stop and tourist attraction for the state of South Dakota. III – in a town of less than a thousand residents, it attracts 15,000 or more visitors daily during tourist season • Before the days of air-conditioned cars, Mr. and Mrs. Ted Hustead, the owners, saw thirsty-looking tourists passing by on their way to the Black Hills. – Ted hand-painted a few signs reading “Free Ice Water— Wall Drug” and placed them along the highway • Before Ted returned from planting these signs, tourists had already found their way to Wall Drug. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 14 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 PR Opportunities for the Hospitality Industry A Product or Service • Unique service also serves as a PR focal point. – usually meaning exceptionally fine service, but sometimes the reverse is true III • A Dallas bar and grill popular with the lunchtime business crowd was notorious for its surly staff. – those familiar with the place loved to take unsuspecting newcomers to see how badly their companion could be insulted 14 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Crisis Management Description • An important area of public relations is crisis management, because not all publicity is good. • Hotels are open twenty-four hours, airlines have thousands of flights a day & fast-food companies serve millions of customers each day. • There are times when things go wrong III – sometimes it is management’s fault – sometimes it is beyond management’s control • A crisis management program will reduce negative effects of these events, as show in Table 14–2 on page 409. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 14 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Crisis Management Categories & Steps • Robert Irvine divides crises into two categories: a sudden crisis and a smoldering crisis. III – a sudden crisis comes without any warning, such as earthquakes & floods, violence, food poisonings & fires – smoldering crises can include sexual harassment by supervisors or safety, health and fire code violations • Crisis management is a series of ongoing, interrelated assessments or audits of kinds of crises and forces that can pose a major problem to a company. • The first step in crisis management is taking all precautions to prevent occurrence of negative events. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 14 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Crisis Management Categories & Steps • Companies need to determine those crises that can occur, and develop plans in case they do occur. III – hotels should have fire plans, and employees should know what to do in case of a fire • Smoldering crises give warning before they occur, and can often be eliminated with good management. – good sanitation practices reduce risk of food poisoning – strict policies will create a climate where sexual harassment is not tolerated • A well-managed property is the best form of crisis management. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 14 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Crisis Management The Internet • A damaging message about your organization (true or not) can spread via Internet to millions of people. • Since the stakes of crisis management have been raised, it is very important to reduce the risk of a crisis occurring. • Managers should monitor Internet chat groups to find out what is being said about their organization. III – a Miami hotel should monitor groups for Miami tourists 14 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Crisis Management Good Communications • When a crisis does occur, good communication with the press can reduce the impact of negative publicity. III – a fire in a guest room with no injuries could result in negative or positive publicity • If the hotel provides no information to the press, a negative headline might read “Regal Hotel Fire Forces Evacuation of 360 Guests.” • By contacting the press, the hotel has a chance to tell their story, and the positive headline from this story might read: “Well-Trained Employees Quickly Move Guests to Safety.” Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 14 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Crisis Management Good Communications • The company should appoint a spokesperson, and employees instructed to refer media to this person. • This person should gather the facts and speak only from facts, which ensures the company is giving a consistent story based on facts. • Timely statements keep the press updated and helps prevent them from trying to gain information from other employees. • The term “no comment” raises suspicion, whereas “I don’t know at this time” is a better response. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab III 14 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Crisis Management Good Communications • In a major crisis, it is a good idea to seek the help of a public relations firm. • The company should notify the press when a crisis does occur & keep them updated. III – the media will learn about the event, so it is best that they find out from the company • Every company should have a crisis management plan & instruct employees in as part of their initial training. • It is no longer a question of if a major crisis will strike an organization, but only when. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 14 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Sales Promotion Introduction • Sales promotion consists of short-term incentives to encourage purchase or sale of a product or service. • It includes a variety of promotional tools designed to stimulate earlier or stronger market response. III – consumer promotion (samples, coupons, rebates, premiums, contests, demonstrations) – trade promotion-buying allowances (free goods, cooperative advertising, and push money) – sales force promotion (bonuses and contests) • Often a well-planned sales promotion can result in publicity. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 14 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Sales Promotion Description • Used by most organizations, estimates of annual sales-promotion spending run as high as $100 billion. • Formerly, the ratio of advertising to sales promotion spending was about 60:40, today that is reversed. • Sales promotions are most effective when they are used with advertising or personal selling. • Consumer promotions must normally be advertised and can add excitement and pulling power to ads. • Trade and sales force promotions support the firm’s personal selling process. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab III 14 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Sales Promotion Steps • Sales Promotion consists of by-now-familiar steps: – – – – – III setting the objectives selecting the tools developing the best program pretesting and implementing the plan evaluating the results 14 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Local Store Marketing Introduction • Local store marketing, also called local area marketing or neighborhood marketing, is a low-cost, hands-on effort to promote and market a business. III – using all opportunities within the immediate trading area • Although all areas of the promotional mix are used, PR is the heart of any local area marketing program. • It is an area in which small companies can compete just as effectively as large companies. • Independently owned businesses have an advantage over large companies because the owners become permanent fixtures of the community. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 14 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Local Store Marketing Description • Research has shown that 75% of a restaurant’s customers come from within a ten-minute drive. III – with fast-food, the radius shrinks to 3-5 minutes • Primary schools look for places to take their students on field trips, and a restaurant or hotel can be an exciting venue. • Many suburban areas have weekly papers; providing a weekly or monthly article on travel, food, or wine is a good way to gain exposure. • Being a speaker at meetings of local social & service clubs is another way to gain exposure. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 14 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Local Store Marketing Ideas • During the holidays, a business can be a depository for charities collecting gifts for the disadvantaged. III – but don’t accept this task passively • If local firefighters ask you to collect toys, suggest the campaign be started with a kickoff drive, including fire engines, sirens, and firefighters. – call the local news station and get some TV coverage • The school band, girl scouts, and the local little league team are always looking for fundraisers. – many restaurants will give a portion of their proceeds to these groups if they refer business Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 14 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Local Store Marketing Involvement • Cause-related promotions are another local area marketing tactic, bring business to the hotel or restaurant and help the community. • A good campaign creates community goodwill and exposure for the restaurant. III – which means increased business & customer loyalty • Successful local marketers do not give products or money away freely; they evaluate every opportunity and make sure the effort will be worthwhile. – by being creative, managers can ensure their local marketing efforts will be noticed Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 14 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 KEY TERMS • Contests, sweepstakes, and games. Give consumers a chance to win something, such as cash or a trip. • Corporate communications. This activity covers internal and external communications and promotes understanding of an organization. • Counseling. Involves advising management about public issues and company positions and image. • Coupons. Certificates that offer buyers savings when they purchase specified products. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab III 14 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 KEY TERMS • Lobbying. Dealing with legislators and government officials to promote or defeat legislation and regulation. • Patronage rewards. Cash or other awards for regular use of a company’s products or services. • Point of purchase (POP) promotions. Includes displays and demonstrations that take place at the time of sale. • Premiums. Goods offered either free or at low cost as an incentive to buy a product. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab III 14 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 KEY TERMS • Press relations. Placing newsworthy information into the news media to attract attention. • Press release. Information released to the media about certain new products or services. • Product publicity. Various efforts to publicize specific products. • Public relations. The process by which a positive image and customer preference is created through third party endorsement. III 14 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 KEY TERMS • Sales promotion. Consists of short term incentives to encourage the purchase or sale of a product or service. • Samples. Offers of a trial amount of a product. III 14 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 EXPERIENTIAL EXERCISES Try This ! • Find a good example of publicity in a print medium • Copy the article and explain why you think the publicity is effective. III 14 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 INTERNET EXERCISES Try This ! Support for this exercise can be found on the Web site for Marketing for Hospitality and Tourism, www.prenhall.com/kotler III • Find two Web sites of hospitality/travel organizations that offer PR support. This could be corporate announcements, a “press room section,” or a gallery of photos that one can download for publicity purposes. • Report on the sites you found and the support they offered for persons wanting to write a story about the organization. 14 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 END III CHAPTER END Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens 14 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458