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Chapter Three
The Marketing Mix and the
Product/Service Mix
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
Evolution of Marketing
4
Ps
Traditional marketing
7
Ps
Adds the service component
of marketing
 13
Cs Incorporates the focus on
customer loyalty
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
4 Ps of Marketing




Product
Price
Place (distribution)
Promotion
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
7 Ps of Marketing







Product
Price
Place
Promotion
Process
Physical attributes
People
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
Thirteen Cs of Marketing
Customer
 Categories of
offerings
 Capabilities of firm
 Cost, profitability,
and value
 Control of process
 Collaboration
within firm

Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
Customization
 Communications
 Customer
measurement
 Customer care
 Chain of
relationships
 Capacity control
 Competition

© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
The Hospitality Marketing Mix
 Another
way of examining the
marketing mix
 Framework developed by Renaghan
– Product/service mix
– Presentation mix
– Communications mix
 Framework
developed by Borden
– Price
– Distribution
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
Designing the Hospitality Product
 Begins
with the wants of the
customer
 The bundle purchase concept: all
individual elements of the bundle are
important to the product as a whole
– The formal product
– The core product
– The augmented product
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
The Complexity of the
Product/Service Mix

Standard products
– Cost benefits
– Lose customers who want
customization

Standard products with
modifications
– Easy to adapt as market changes

Customized products
– Designed to the target market
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
Making the Product Decision
 Step
1: Identify the target market
 Step
2: Define your business goals
 Step
3: Assess capabilities
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
Key Points
 Analyzing
the hospitality
product/service
– What is it in terms of what it does for
the customer?
– How does it solve problems?
– What benefits does it offer?
– How does it satisfy demand?
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
Key Points (cont.)
 Analyzing
the hospitality
product/service
– Who uses it? Why? How?
– How does it compete?
– What are the occasions for its use?
– What are its attributes?
– What is the perception of it?
– How is it positioned?
– Which attributes are salient?
Determinant? Important?
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
The Product Life Cycle
Sales
Maturity
Decline
Growth
Introduction
Time
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
The Product Life Cycle (cont.)
 The
Introductory/Embryonic Stage
– Entry into the marketplace
– The thirteen Cs: Focus on customer,
category of offering, control of the
process, communication, and capabilities
of the firm
– High-cost and low-profit
– Produce to meet demand
– The customer must be persuaded….
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
The Product Life Cycle (cont.)
 The
Growth Stage
– Customers are “early adopters”
– Satisfy the customer
– Can be slow or rapid growth
– Refine product
– Price appropriately
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
The Product Life Cycle (cont.)
 The
Mature Stage
– Positioning established
– Market is steady and loyal
– The thirteen Cs: examine category of
offerings, communication
– Refurbish physical elements
– Sales growth slows
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
The Product Life Cycle (cont.)
 The
Decline Stage
– Faster than the growth stage
– Reduces costs
– The thirteen Cs: Communicate
– Failure due to loss of focus, slip in
quality or unawareness of need to
change
– The “death spiral”
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
How to Determine Where You Are
in the Product Life Cycle
 Study
past performance
– Sales growth, market share progression
– Alterations or enhancements made to
product
– Sales and profit history of similar
related, complementary, or comparable
products
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
How to Determine Where You Are
in the Product Life Cycle (cont.)
 Study
past performance
– Customer feedback
– Repeat and new business
– New competition and new concept
introductions
– Number of competitors and S&W
– Critical factors for success
– Customer
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.
Shoemaker, Lewis, and Yesawich: Marketing
Leadership in Hospitality and Tourism, 4th edition
© 2007 Pearson Education, Upper Saddle
River, NJ 07458. All Rights Reserved.