introduction hospitality marketing
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INTRODUCTION HOSPITALITY
MARKETING
TOPIC - I
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In 1950s, hotels in US began to change, driven
by changes in the society around them:
1. Population growth
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2. Longer life span
Not only did the population grow, it became
older and these new families started
relocating.
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3. Improved incomes
Family incomes improved.
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4. Increased leisure time
Additional legal holidays were given to workers.
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5. Expanded highway system
Soon became an important factor in the no: of Americans
traveling, both for business and leisure. It also helped the
local travel simple.
Vehicle registration grew phenomenally and Americans
took to the roads in great nos.
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6. Development of suburbs
As a result, new residential neighborhoods were
established in the suburbs which were followed by
retail shopping centers, office buildings, and
recreational and entertainment facilities, all of which
attracted increased traffic and the need for
accommodations and meeting space.
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7. Increased air travel
Air travel also became a commonplace part of
the American business and leisure scene.
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8. Convention center expansion
The 1950s and 1960s ushered in a booming US
economy. As businesses grew, business people
needed facilities for convention and meetings.
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8. Convention center expansion
As businesses expanded into the suburbs or outgrew
the limited facilities of the smaller convention
centers, there was a boom in the construction of
convention hotels, both in the cities and in regionaland resort destinations.
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What does these factors have to do with
hospitality Sales & Marketing?
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The answer is simple : everything !
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Changing times had a great impact on the hospitality
industry, and the industry had to evolve
tremendously to meet the new challenges posed by
a changing society.
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To meet the demands of road travelers in the 1950s,
the industry responded with development of a no: of
chain properties: Holiday Inns, Ramada Inns, Howard
Johnsons, and Travelodge were among the lodging
pioneers along interstate highways.
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Each of these chains introduced its own standardized
designs, amenities, services, and referral networks;
each became easily recognizable (both in terms of
service and market image) in the eyes of the
traveling public.
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The growth of these and other chains coupled with
developing technology ushered in the first toll-free
reservation systems in the 1960s, a decade that also
introduced the first budget hotels.
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These back to basics budget properties did not come
into great prominence until the 1970s, when
runaway inflation, fuel shortages, and budget
cutbacks on the part of many companies resulted in
an unprecedented belt-tightening among travelers.
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1980s have also changed the face of the hotel industry,
a no: of large convention hotels such as the Las Vegas
Hilton, the New York Marriott Marquis, the Hyatt
Regency Maui.
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Even small hotels are catering to the business traveler
with executive floors, business services, and fitness
amenities that were virtually non-existent ten years
ago.
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Todays Hospitality Trends
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Current and emerging economic, social, and political
trends can greatly affect future demand for
hospitality services, and must be identified before a
property can position itself competitively in the
market place.
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TRENDS
It includes;
1. Computers
2. Distribution method
3. Media planning
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TRENDS
4. Competition
5. Guest preferences
6. Product segmentation
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1. Computers
Use of computers has revolutionized central
reservations systems and has provided direct link to
travel agents and airline reservations systems for
instantaneous verification of room arrangements.
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1. Computers
It plays an important role in areas as diverse as
generating marketing data bases (both for current
and future guests), following up on sales efforts, and
sending personalized sales letters.
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1. Computers
It is also an indispensable tool for managing research
information, generating monthly reports, and
planning sales & marketing efforts.
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2. Distribution method
New distribution technology will not be limited to
third-party suppliers. Direct-to-the-consumer
technology is now being developed that will permit a
potential guest to buy flight and room packages in
the comfort of his or her home through internet.
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3. Media planning
Media planning plays an important role hospitality
sales & marketing. Earlier we had only few media
options. Today its wide open print and broadcast
media, internet !!
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3. Media planning
With wide range of media choices, audiences have
become smaller, it has become necessary to
narrowcast advertising. Marketers must develop
advertising and promotions that appeal to specific
markets.
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4. Competition
The changing competition is another important
consideration in todays marketplace. More hotels
are seeking affiliations in order to compete with large
chains, who have the budgets and the clout to
command a large share of the hospitality business.
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5. Guest preferences
Todays guests are more sophisticated, more informed,
and know exactly what they are looking for. These
experienced traveler wants value, but services and
amenities are important too.
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5. Guest preferences
Because of changing guest preferences and the
addition of new market segments (SLT Single Lady
Travelers), properties have had to re-evaluate their
target markets and reposition themselves to be more
competitive.
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5. Guest preferences
This has led to perhaps the most important
trend in todays marketplace: product
segmentation or product categories.
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PRODUCT SEGMENTATION
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It is designing, building, and/or marketing
hospitality properties for a specific market
segment.
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Hospitality Product Segment
1. Luxury
2. Mid-priced
3. Budget
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Now there are segments within these segments,
and hotels are creating brand images and
names to distinguish their properties from
competing properties.
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Today, product segmentation has taken three
basic forms:
1. Tier or niche marketing
2. Hotels within hotels
3. All-suite hotels
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1. Tier or niche marketing
Tier marketing was established as properties
became aware that there was an increasing
no: of market segments with varying
preferences and budgets.
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Quality Inns was the first chain to adopt a multi
tiered marketing strategy ,and introduced ComfortInns (budget properties) Quality Royale (upscale
properties) to compliment its mid-priced Quality Inns
product.
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The other chains quickly followed this, some by
developing different brand names to attract new
market segments, others by buying existing chains
(as in the case of Holiday Inns, which purchased
Granada Royale Hometels )
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What were the reasons for this sudden
diversification of hospitality properties?
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The recognition on the part of some chains that
additional markets needed to be targeted in order
to meet the goals of aggressive growth plans.
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The need to identify the variations in
facilities, price and service between
properties within a chain.
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The chains attempt to instill brand loyalty
in their guests, a strategy that has long been
used in the sale of consumer goods.
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The trend toward upscale and economy properties
The fact that many mid-priced properties were
finding it difficult to compete because of their age
and condition.
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With so many hotel chains the diversifying to
reach as many market segments as possible, it
is important that a chain make the
distinctions among its properties clear.
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The Radisson hotel chain, for example, uses
different names to distinguish its properties:
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Radisson Plazas are deluxe facilities
featuring a minimum of 250 guestrooms and
40-50 square feet of meeting and function
space per guestroom.
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Radisson Hotels feature a minimum of 200
guestrooms and 50-70 square feet of meeting
and function space per guestroom
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Radisson Inns cater to the roadside traveler,
and have a minimum 150 guestrooms and 30-
40 square feet of meeting and function space
per guestroom .
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Radisson Resorts are designed to serve
incentive groups and high-class meetings with
a minimum of 200 guestrooms and 45-50
square feet of meeting and function space per
guestroom.
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These properties are promoted differently, but
are promoted to generate a brand loyalty
in this case, a brand loyalty to Radisson
properties.
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Brand loyalty has been used in other industries, such as
automobile industry, for years, and involves
capturing the consumer and moving him or her
up to the next product tier as wants and desires
change.
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In the case of automobile industry, for example, a
young man might purchase a Ford Escort for his first
new car, then later graduate to a Ford Taurus as his
family grows.
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As his career and salary rise, he will, if he remains loyal
to the Ford brand, choose another Ford product
a Lincoln or Thunderbird over other luxury cars.
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Hotels Within Hotels
Product segmentation is not limited to chains
acquiring or building different types of
properties.
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The hotel within a hotel concept has proved
popular, especially with upscale guests who
appreciate having a club or floor reserved
exclusively for their use.
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Sheraton and Hilton hotels offer Tower sections, Hyatt
promotes a Regency Club, and Marriott offers a
Concierge (care-taker) level. Other properties also
promote business clubs, floors, and/or services.
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All-Suite Hotels
This has become an integral part of the hospitality
industry, and appeals to value-conscious travelers
who do not want to pay for extra amenities they
would not use at a traditional hotel (a lounge,
swimming pool, health club, and so on), as well as
travelers who enjoy the extra comfort a suite can
provide during extended business or pleasure stays.
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THE NEED FOR PROPERTY/HOTEL
MARKETING
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For years the hospitality industry focused on
selling guestrooms and other services and
facilities. In todays sophisticated marketplace,
however marketing has become the
buzzword;
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What is the difference between marketing and
sales ?
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Marketing is basically the study and management of
the exchange process.
It involves those things that the property will do to
select a target market and to stimulate or alter the
demand for the propertys services.
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While marketing includes sales, it also involves a no: of
other factors: research, action strategies, advertising,
publicity, and sales promotion, as well as a means to
monitor the effectiveness of the marketing program.
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Sales consists of direct efforts to sell the property by
personal contact, telephone, and mailings. It is
important to note that the sales process has been
changed considerably by new marketing concepts
that focus on what consumers want rather than on
what the property has to sell.
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Example : the establishment ofno-smoking rooms in
response to requests from health-conscious guests.
Because of marketing research, more properties are
developing features for sales people to sell, rather
than just trying to sell existing features.
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Marketing Focuses Vs Sales Focuses
M Market analysis, planning and control.
S Field work & desk work to sell to consumers.
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Marketing Focuses Vs Sales Focuses
MLong term trends, how to translate problems and
new opportunities into new products, markets, and
strategies for long term growth.
SShort term considerations, such as todays
products, markets, consumers, and strategies.
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Marketing Focuses Vs Sales Focuses
MProfit planning, such as determining the
appropriate mix of business from individual market
segments.
S Volumes and quotas, current sales, bonuses, and
commissions.
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Marketing, then, focuses on the researching of
trends and the development of successful
sales techniques and efforts.
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Successful sales of the property depend on effective
strategies, which can only be developed by focusing
on market variables the environment
(uncontrollable or external variables), and
controllable variables inherent in the property (the
marketing mix)
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THANK YOU
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difference between hotel and resort,
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hotel as a product,
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elements of marketing,
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market segmentation,
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benefits and needs of segmentation,
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types of segmentation,
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basic operations and functions of a hotel and a
resort,
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Market segmentation in the hospitality industry
and how it differs from product segmentation