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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.