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SHA502: Conducting Effective Hospitality Marketing Research School of Hotel Administration, Cornell University
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SHA502 Transcripts
Transcript: Course Introduction Hello, I'm Judy Sigua. Welcome to Conducting Effective Hospitality Marketing Research. This course is second in a four course series in the hospitality marketing certificate program. You will learn varying methods of data collection, market segmentation, strategic positioning, and steps in the buying process. Along with learning how to use the SWAT method of analysis, we will be using well marking situations and we'll be exploring practical solutions and approaches to marking situations and challenges. I hope you will have as much fun taking this course as the eCornell team and I had putting it together. Transcript: Marketing Research Process Case Study Hello, good to meet you! My name is Ellen Roth, I am the General Manager here at the Golden Bay Inn. Our problem is that we have noticed a downturn in business lately, and when I started looking into it, I discovered that we have very low customer-‐retention rates. In fact we only averaged 37 percent last year and 38 percent the previous year. We seem to be able to get people in the door, but they aren't coming back. I work hard with our small, 20-‐person staff, and I think that we are well-‐positioned in the San Francisco market to compete with other small, high-‐priced, elegant hotels such as ours, so I need to know why this is happening. With my daily responsibilities, I don't have the time to do the in-‐depth marketing analysis that is needed to find out the root causes of our troubles. I hope you can help us—you have come highly recommended! Transcript: What is Marketing Research?
The Six Steps of the Marketing Research Process
1. Define research objectives or problem 2. Formulate hypotheses 3. Plan the research design 4. Develop the sampling plan and collect data
SHA502: Conducting Effective Hospitality Marketing Research School of Hotel Administration, Cornell University
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5. Analyze the data 6. Prepare the final report
Step 1: Define Research Objectives or Problem
Typical objectives of a market research project in the hospitality industry may include:
• Defining who the customers are, what they want, what their attitudes toward promotional programs are.
• Conducting a longitudinal study (tracking study) to track per-‐customer profit, brand or product awareness, patronage, attitude toward product/brand image.
• Obtaining information about the company and its business environment through internal research (for example, sales analysis and marketing cost analysis) and interviewing company officials. This method of research is called situation analysis.
• An informal investigation involving interviews with informed persons outside the firm.
Step 2: Formulate Hypothesis
An hypothesis is an educated guess about the relationships between events or about what will happen in the future. In scientific method, hypotheses are developed and tested.
Step 3: Plan the Research Design
Create a plan that specifies what information will be obtained and how.
Step 4: Develop the Sampling Plan and Collect the Data
The total group that the researcher wants to study is called the population or universe. If all sources are contacted, the results are known as a census. If a representative group is contacted, that group is known as a sample–a subset drawn from a larger population. Samples can be classified as:
• Probability samples: those in which every member has an equal chance of being selected.
• Non-‐probability samples: arbitrary samples not subject to statistical tests. For example a convenience sample simply targets respondents who are easily accessible.
A key issue in sampling is determining how representative the sample is of the total population.
A properly selected sample will have the same characteristics as the universe from which it is selected.
Sampling error occurs when a sample is not representative of the target population.
SHA502: Conducting Effective Hospitality Marketing Research School of Hotel Administration, Cornell University
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Step 5: Analyze the Data and Interpret the Findings
• It is up to the researcher to analyze the data and identify relationships, trends, and patterns.
• This is frequently done through the use of statistical packages. There are several easy-‐to-‐use computer programs that analyze data, such as SPSS or SAS.
Step 6: Write and Present the Report
• Findings of marketing studies should be presented in such a way as to increase the likelihood of their usefulness to the decision maker.
• Reports should be clear and concise and directed toward management.
Transcript: Methods of Data Collection
Primary Data
Primary data is information specifically collected for a current problem.
Primary data:
• Must be collected if the specific research question cannot be answered by available secondary data
• Answer specific questions • Are current • Are gathered using methodology specified by the researcher • Can be gathered in such a way as to maintain accuracy and secrecy
Sources of primary data: firm's suppliers, sales people, middlemen, or customers.
The major disadvantage of primary data is the expense involved in collecting the data.
Primary research may be broadly divided into two types: qualitative and quantitative research.
Qualitative
• Qualitative research captures feelings and behavior motivations. It seeks in-‐depth, open-‐ended responses.
• The use of qualitative, or psychosociological, research is spreading throughout U.S. industries.
SHA502: Conducting Effective Hospitality Marketing Research School of Hotel Administration, Cornell University
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• One explanation for this is that qualitative research is relatively fast and may be less expensive, in some cases, than quantitative research.
• Qualitative research is also a way for firms to understand the nuances and connotations of their products, particularly in advertising campaigns.
Quantitative
Quantitative research provides hard numbers; it seeks structured responses that can be summarized in numbers—like percentages, averages, or other statistics.
• Quantitative methods are still the most prevalent. • Despite the growth in popularity of qualitative research, especially focus groups, survey
research still remains the most commonly used method of understanding consumer behavior.
• Survey research data collection still has its advantages, particularly the ability to project the sample results onto the population as a whole.
Survey
Survey Research Advantages and Limitations
• Response rate is often low. • Responses may not be representative of the population. Those participants willing to
respond to the study may have stronger positive or negative attitudes about the issue under consideration than the general population. Thus, these participants may be eager to have their voice heard, but they may not reflect the prevailing attitude of the larger population.
• Structured questioning gives more objective results. • Surveys are flexible in that they may be conducted by mail, by phone, in person or
electronically through e-‐mail or the Internet. • Questionnaires may be open-‐ended questions, closed-‐ended questions, or scaled-‐
response questions. • Questions must be clear, concise, and not double-‐barreled. That is, surveys should ask
only one question at a time; otherwise, the researcher cannot be sure to which question the study participant is responding.
• Measurement error occurs when the information desired by the researcher differs from the information provided by the measurement process. For example, the questions on the survey may evoke responses that do not elicit the information the researcher needs to answer the research questions.
Pros and Cons of Types of Surveys
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• Mail surveys are common, convenient, and cost effective, but their response rate may be low.
• Fax surveys may yield faster results than mail surveys, as well as a higher response rate. • Mail panels provide a good response rate for those who agree to participate. • Telephone surveys are fast and effective, but respondents cannot see items under
discussion, and questions asked must be very short. • Personal interview surveys can be in-‐depth, but are expensive and time-‐consuming. • Computer interviews allow for faster gathering and analysis of data. Respondents may
be more truthful in responding to a computer, especially on sensitive topics, but the computer cannot explain misunderstood questions.
o Response rates for e-‐mail and Internet surveys are generally very low (<10 percent), but electronic surveys are the most cost-‐effective.
Observation
Observational Method
The observational method involves actually viewing the overt actions of the subjects. There are three way of accomplishing this:
• People watching people. • People watching physical phenomena. • Machines watching people.
Mystery shoppers, one-‐way mirror observations, traffic counters, VideoCart (tracks shopper traffic patterns), and passive people-‐meters are all ways of using the observation method.
A drawback of the observation method is that motivations, attitudes, and feelings are not measured, thereby limiting the richness of the results.
Experimental
Experimental Method
This research approach is one where researchers compare the responses of groups that are similar except on the characteristic being tested.
• Marketers can often only control one independent variable and must assume that all other relevant variables remain the same.
• An experiment in the field is called test-‐marketing. • Test markets are more realistic, but are also more expensive, time-‐consuming, and
impossible to keep secret from the media and competitors.
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Secondary
Secondary Data
Secondary data are data previously collected for any purpose other than the one at hand. Secondary data may be internal or external data. A lot of secondary data is available. Sources include:
• Libraries • Government, at all levels • Internet • Private business firms, such as Nielsen • Trade, professional and business associations • Advertising media • University research organizations • Company databases and records
A number of syndicated data sources are also available. These include, but are not limited to, PRIZM; CREST; Technomic, Inc.; Gazelle Systems, Inc.; and STR data.
• PRIZM Database segments USERS by zip code and block tracts, grouping neighborhoods on the basis of social rank, mobility, ethnicity, family life cycle, and housing.
• Consumer Reports and Eating-‐Out Share Trends (CREST) studies and reports on trends in purchases of food prepared away from home.
• Technomic, Inc. studies market share for restaurant chains, and reports on trends in food service.
• STR Global collects and reports market share and operational performance of hotels.
The advantages of secondary data are that it is less expensive and faster to obtain than primary data. For example, on-‐line computerized databases simplify the task of retrieving secondary data so the needed data may be available immediately and at a nominal cost. For these reasons, researchers should first attempt to use secondary data to answer research questions. Only when the secondary data prove to be insufficient in providing a thorough answer or if the secondary data are suspect should researchers begin the more costly primary data collection.
Disadvantages of secondary data include obsolete data, irrelevant data, and questionable quality and accuracy. In studying internal data, remember that collected data in summary form may hide important evaluative information.
Focus Groups & Other Methods
Focus Group Interview
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An interview of 6 to l0 people in an informal group setting. Focus groups are a major means of obtaining qualitative data.
Other qualitative methods often used in the hospitality industry include:
• Lobby lizard • One-‐question questionnaire • Comment cards • Managers' luncheon • Advisory groups • Customer consultants
Data Analysis & Preparation
There are a multitude of methods by which data may be analyzed so as to inform the marketing decisions of the organization. In this section, just a few methods commonly used in marketing are highlighted.
Conjoint Analysis
• Conjoint analysis measures guests' preferences, predicts guests' responses to new hospitality concepts or new attributes of current concepts. Conjoint analysis allows the hospitality firms to decompose guests' preferences for goods and services into the "partworth" utilities associated with each option of each attribute of the concept. Hospitality firms can reconfigure these partworths to identify: (1) guests' preferences for any combination of attribute options, (2) the most advantageous hospitality concept, and (3) market segments that place the highest value on a particular concept.
• Conjoint analysis is often used to examine trade-‐offs: If the organization must choose between two attributes, which will bring the guest the most satisfaction or be perceived as offering the greatest value. Or, from a customer perspective, what is the customer willing to give up to get something else. Conjoint analysis can also be used to determine what customers will be willing to pay and what drives their purchase decision.
• To develop a conjoint analysis, you must first list and name the attributes under consideration. An attribute is any feature that can be built into a concept and can be used to describe the concept. For the hospitality industry, these attributes might include price, segment, décor, amenities, or cuisine, as well as many others. Once the attributes are defined, then the levels must be selected. Each attribute must have at least two levels from which customers can choose. For example, if the attribute is amenities, the levels may be pool, spa, gym, gift shop, and restaurants. The list of attributes and levels can be quite broad, as in this example, or far more refined by detail.
SHA502: Conducting Effective Hospitality Marketing Research School of Hotel Administration, Cornell University
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• Once the attributes and levels are determined, the customers' responses for their preferences can be obtained. There are generally two methods for obtaining guest preferences:
o Using the self-‐explicated method, respondents allocate a total of 100 points among the different attributes, with more points representing the most important attributes, and then rank the different levels for each attribute in order of preference. For example, a respondent might distribute 30 points out of 100 to the attribute "amenities," indicating amenities are important and then assign ranks of 1 to pool, 2 to restaurant, etc.
• In the ratingsmethod, respondents assign a score (for example, 0 to 100) to a product concept (or group of attributes), so that more points are indicative of stronger preferences. The ratings method is viewed as a more involved and complex task, but also a more reliable method to extract respondents' preferences. The analysis used for responses can infer which attributes and levels drive customer purchase decisions.
o Guest preferences (or preference partworths) can be used to identify market segments, which have similar likes and dislikes and place similar values on attributes.
• Conjoint simulation programs can be used in combination with other data to analyze one company's products against those offered by competitors, determine the relationship between preferences and market share, or reveal the bundle of attributes that will yield the highest profit for the organization.
Laddering
Laddering is a one-‐on-‐one in-‐depth survey technique that answers the question "why is that important?" and searches for deeper motivations, and ultimately uncovers the core personal values that drive purchase behavior. This method allows consumers to translate product attributes into meaningful personal associations by laddering linkages across attributes, consequences and values. Laddering is best used in industries, like hospitality, where the purchase of products and services are seen as means that enable customers to fulfill important values or needs.
Laddering data is analyzed using content-‐analysis procedures and the creation of a tree diagram, known as a hierarchical value map. The value of laddering is that it allows the hospitality firm to market its products and services based on the consequences and values that the customers have identified as motivators behind their purchase decisions.
Customer Choice Model
The customer choice model or Logit model helps analyze and explain the choices individual customers make in a market. Using this data analysis method, the hospitality firm can
SHA502: Conducting Effective Hospitality Marketing Research School of Hotel Administration, Cornell University
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understand the degree to which factors such as the price or location influence a customer's choice. More broadly, the individual guest purchase probability of a specific brand equates to the brand's market share at the market level. Customer choice analysis allows companies to develop marketing campaigns targeted toward specific market segments or individual customers.
Following the customer choice model, two methods of collecting data may be used:
• The single alternative is used when customers face only one alternative, which requires basically a yes or no decision.
• The multiple alternatives method requires that customers select one answer from a variety of options, such as brand X, brand Y, or brand Z.
When combined with demographic data on customers and competitor purchase information, the customer choice model can also identify relationships between certain demographics and the purchase decision, the effect of competitors' marketing campaigns on purchase of the firm's products or services, and the impact of the firm's marketing promotions on its own sales performance.
Transcript: The Six Stages of the Buying Process
From need recognition to post-‐purchase behavior, here you will find the six stages that a consumer experiences during a buying process.
1. Need recognition or problem awareness
The moment when a consumer realizes the need for a product.
Recognition of an unsatisfied need, or need (problem) recognition, creates tension or discomfort for the consumer. This need may arise internally, such as feeling hungry or thirsty, or it may arise because of external stimulation through such things as:
• An ad for a product, or • The sight of the product itself
Needs may also be stimulated through dissatisfaction with a product the consumer is currently using.
Unsatisfied needs may cause conflict for the consumer.
SHA502: Conducting Effective Hospitality Marketing Research School of Hotel Administration, Cornell University
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• The consumer has to decide how to allocate his/her resources of time and money between competing needs.
If this conflict is not resolved, the buying process stops.
2. Choice of an involvement level
How important is satisfying this need to the consumer? High, medium, or low?
The consumer decides how much effort to exert to satisfy the need. The more effort exerted, the higher the involvement.
There are three levels of involvement:
1. High Involvement: the type of problem solving involved when a need is completely new or very important to a consumer and much effort is taken to decide how to satisfy the need.
2. Limited Involvement: when a consumer is willing to put a moderate amount of effort into deciding the best way to satisfy a need.
3. Low Involvement: when little time and effort is put into making the purchase because the purchases do not have high personal importance or relevance for the customer. These include frequently purchased, low-‐cost goods and services.
Involvement tends to be greater under any of the following conditions:
• The consumer has no previous experience with the product or the consumer lacks information about the purchase.
• The product is viewed as important or there is a high level of interest. • The risk of making a bad decision is perceived as high. • Circumstances may change a low-‐involvement situation to a high-‐involvement one. • Social visibility of the product is high.
It is important to remember that involvement is consumer related and not product related. This means that a low-‐involvement product for one person may be a high-‐involvement product for another person.
Hospitality firms must respond at this stage of the consumer purchase process by recognizing the importance of latent needs such as Check-‐in/Check-‐out and children's programs in hotels.
3. Identification of alternatives or information search
What choices does a consumer have, how willing are they to look for more choices, what is the consideration set that comes out of their initial thinking?
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Identification of alternatives includes both product and brand alternatives. This may be as simple as a memory scan (internal information search) or an extensive search (external information search).
1. The consumer must first identify which product categories might satisfy the experienced need. For example, a need for lodging may be satisfied by tents, youth hostels, hotels and campers.
2. Then the consumer must choose which brands from the selected category to consider. Using the previous example, the consumer chooses hotels and now must consider Radisson, Four Seasons, Holiday Inn, Ritz-‐Carlton, etc.
The search for alternatives will be influenced by:
• How much information the consumer already has from past experiences and other sources. There are two sources of information:
o The commercial environment, which includes all marketing, organizations, and individuals who attempt to communicate with consumers. This includes:
§ Advertising: the most common type of information used in the commercial environment
§ Direct sales effort by salespeople and package information o The social environment, which includes family, friends, and acquaintances who
provide information directly or indirectly about products. § Commonly communicated through word-‐of-‐mouth. § Can include observation of others using products and exposure to
products in the homes of others. § Can include the content written by product users and left on independent
websites. • The consumer's confidence in the information already held. • What the time and money costs would be to collect more information offset against the
benefits of collecting additional knowledge.
The search for information yields an evoked set (also called a consideration set)–a limited group of product categories or brands which buyers believe will satisfy their needs. If a particular product category or brand does not appear in the consumers' evoked sets, the product or brand has no chance of being selected for purchase.
4. Evaluation of alternatives
How does the consumer compare the items within their consideration set?
Evaluation of alternatives involves establishing criteria with which to evaluate each alternative before making a decision.
SHA502: Conducting Effective Hospitality Marketing Research School of Hotel Administration, Cornell University
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• Consumers often set minimum or maximum levels of an attribute (cutoff points) that determine whether a product will be considered as a viable choice.
• Adding new brands to an evoked set affects the consumer evaluation of the existing brands in that set.
• A wide variety of factors influence how a consumer evaluates the choices and how quickly he or she makes a decision.
• User generated content on independent websites, such as Trip Advisor, have been found to have a powerful influence on consumer evaluations.
• An evaluation of alternatives may or may not result in a purchase.
5. Purchase decision
Influenced by mood, convenience, affordability, and a host of other items, consumers make their choices.
The purchase decisions are a series of related decisions consumers must make if they decide to make a purchase. These decisions may take a long time and include such things as:
• Specific features of the product • Where and when to make the actual purchase • Method of payment
Purchase decisions may also be influenced by the consumers' states and moods. For example:
• If you are hungry, you may stop at a fast food restaurant you would not otherwise visit. • When you are shopping during the holidays, you may be in a festive mood and spend
more on presents than you had originally intended.
6. Post-‐purchase behavior
Either falling into the categories of customer satisfaction or post-‐purchase dissonance, this is the piece of the experience where the possibility of a repeat sale is also evaluated.
Post-‐purchase behavior can influence repeat sales and what the buyers tell others about the product. Marketers can improve their marketing mix through learning what the consumers know and how they feel after the purchase. Such feelings generally fall into one of two categories: customer satisfaction and post-‐purchase dissonance.
• Customer satisfaction is based upon a comparison between the consumers' expectations before using a product and their actual experience with the product.
o A consumer is satisfied when the product experience equals or exceeds expectations.
o A consumer is dissatisfied when the experience falls short of expectations. This feeling also leads to post-‐purchase dissonance.
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o Marketers can influence consumers' expectations through advertising claims and sales presentations.
Transcript: Factors Influencing The Buying Process
In this presentation, learn about several factors that influence the buying process.
Social/Interpersonal
The external social forces around us affect our individual buying decisions.
These forces include:
• Cultural influences • Reference groups • The family and household • Class influences • Social networks
For more information, see the resource page title "More About Factors Influencing the Buying Process."
Psychological
Individual psychological factors that influence consumer buying decisions include:
• Motivation • Perception • Learning • Values, beliefs, and attitudes • Personality • Self-‐concept • Lifestyle
For more information, see the resource page title "More About Factors Influencing the Buying Process."
SHA502: Conducting Effective Hospitality Marketing Research School of Hotel Administration, Cornell University
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Situational
Consumption Situation
Consumer needs and brand preferences are likely to vary depending on the consumption situation. For example, a consumer might prefer a decaffeinated coffee before going to sleep, but regular coffee in the morning.
Purchase Situation
Consumer needs and preferences are also likely to vary depending on the purchase situation. For example, a consumer might prefer a particular type of wine to give someone as a gift, but another type for home consumption.
Time Dimension
Purchase decisions are also influenced by when a consumer is most likely to purchase a particular product. For example, a consumer might find a beer enjoyable after an afternoon of golfing, but likely would not consider consuming a beer prior to meeting for a 7:00 a.m. tee time.
Physical and Social Surroundings
Consumer's purchase preferences also are likely to change depending on his or her physical and social surroundings. For example, a consumer may spend rather freely on t-‐shirts and refreshments at a sold-‐out rock concert, but refuse to linger in a bar where he or she is the only patron.
Transcript: More about Social/Interpersonal and Psychological Factors Influencing Buying Behavior
Cultural influences
Cultural influences include the values, beliefs, preferences, and tastes created by a given society and handed down from generation to generation.
• The culture may influence how needs are satisfied. For example, in some cultures, the consumption of certain insects is a normal means of satisfying hunger, but this would not be an acceptable method of satiation in other cultures.
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• Subcultures are groups that exhibit characteristic behavior patterns sufficient to distinguish them from other groups within the same culture. A subculture is important if specific purchasing patterns can be traced to it.
Reference groups
Consumers may use products to establish identity with a group or to gain membership into it. Consumers are more likely to be influenced by word-‐of-‐mouth information from reference group members than by advertising or salespeople.
The family and household
The family is the most important social institution for many consumers, strongly influencing the values, attitudes, self-‐concept, and socialization process of its members. Knowing which family member is likely to make the purchase decision will influence a firm's marketing mix.
Marketers are also interested in considering the buying behavior of the household as a unit:
• Who influences the buying decision? • Who makes the buying decision? • Who makes the actual purchase? • Who uses the product?
Class influences
Buying behavior is often strongly influenced by social and/or economic classes. Marketers use a classification scheme to help them categorize class influences. One such scheme in the United States identifies the following five classes, within each of which are opinion leaders who serve as information resources:
1. Upper class o 2% of total population o Socially prominent old families and the newly rich o Live in large homes in exclusive neighborhoods o Buy expensive products, patronize fancy shops
2. Upper-‐middle class o 11% of the total population o Successful business and professional people o Well-‐educated, have a strong desire for success, and push their children to do
well o Buy products that signify status, belong to private clubs, and support the arts
and various social causes 3. Lower-‐middle class
o 36% of the population
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o Strive for respectability, are future oriented, and are willing to take risks o Have well-‐cared-‐for homes, save money to send their children to college, and
buy products that are popular 4. Upper-‐lower class
o 38% of the population o Clerical and blue-‐collar working class o Tied closely to family for support, have a local orientation, clearly defined male-‐
female roles, and are concerned about security o Live in smaller homes, drive larger cars, watch bigger television sets, and buy
American products 5. Lower-‐lower class
o 13% of the population o Unskilled workers, the chronically unemployed, unassimilated immigrants, and
people on welfare o Poorly educated, live in substandard housing, have low income
Social networks
Social networks are made of individuals which are linked by friendship, relationships, or common interests. Today, these networks may be Internet-‐based and include individuals that the consumer has never met in person.
Psychological factors
Psychological factors that influence consumer buying decisions include:
• Motivation: the result of a need sufficiently stimulated so that an individual is moved to seek satisfaction.
• Perception: a process of coloring and processing information from the environment through our five senses. Perception plays a major role in the stage of the buying-‐decision process that involves identifying alternatives. The nature of perception requires marketers to keep their messages simple, repeat them often, and conduct research to see if the messages have been received and interpreted as intended.
• Learning: changes in behavior resulting from previous experiences. Learning plays a part in every stage of the buying process. Marketers use several strategies designed to fit the way people learn, including:
o Repetition, in which marketing messages are spread over time o Family branding—an example of stimulus generalization in which different
products are offered under the same brand name (Courtyard by Marriott, Residence Inn by Marriott, Marriott Marquis, etc.)
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Values, beliefs, and attitudes
• Values are enduring beliefs that a specific mode of conduct is personally or socially preferable to another mode of conduct. Customers with similar value systems tend to react alike to prices and other marketing-‐related inducements.
• Beliefs are organized patterns of knowledge that an individual holds as true about his or her world. Consumers tend to develop a set of beliefs about a product's attributes and then, through these beliefs, form a brand image—a set of beliefs about a particular brand.
• Attitudes are learned predispositions to respond to an object or class of objects in a consistently favorable or unfavorable way. Attitudes do not always predict purchase behavior, but they play a major role in the evaluation of alternatives.
• Personality is a way of organizing and grouping the consistencies of an individual's reactions to situations.
• Self-‐concept is how a consumer perceives himself or herself in terms of attitudes, perceptions, beliefs, and self-‐evaluations. For example, a consumer who perceives himself as extremely religious may make purchase decisions based on this perceived religiousness.
• Lifestyle is a person's mode of living as identified by activities, interests, and opinions. Psychographics is the analysis technique used to examine consumer lifestyles and to categorize consumers.
• Psychographics have proved valuable in segmenting and targeting consumers.
Transcript: Types of Hospitality Consumers
This presentation reviews categories of business and leisure travelers, an important factor in creating a best-‐fit marketing strategy.
Types of Hospitality Consumers
There are two main types of hospitality consumers: business travelers and leisure travelers. Hospitality companies need to understand these separate groups to analyze whether a high percentage of their customers fit into one or the other of the profiles. Understanding these groups help companies meet these groups' needs more effectively, or reach out to new ones. The most important lesson is "Know thy customer."
A Profile of Business Travelers
Without the constant and steady income from the business travel market, hotels, airlines, and car rental companies would have difficulty effectively utilizing their inventory. For many
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segments of the hospitality industry, this is their bread and butter, and serving their needs effectively is vital.
In general the business traveler:
• Wants "an office away from the office" • Is looking for enhanced productivity from both the trip and the time spent on the trip • Thinks technology like telecommuting, web conferencing, online meetings, and
videoconferencing will reduce business travel in the future • Prefers full-‐service hotels, airlines, and car rental companies with moderate prices • Tries to negotiate best rates.
Business Traveler Preferences
Business travelers have also shown several factors that influence their buying habits:
• They tend to prefer hotels and airlines that suggest a high degree of prestige. • They are more likely to avoid bargain-‐basement lodging and low cost carriers when they
can. • They like well-‐known brand names.
And their previous experience with the hospitality product is also important, including the elements of
• Location • Reputation • Recommendations of friends/associates • Price.
Befitting their status, senior executives will generally expect to stay in luxury or upscale hotels with high levels of service, as well as utilize first-‐class airline service and other high-‐end hospitality services, while traveling. On the other hand, salespeople may stay in mid-‐scale or even budget hotels and utilize low-‐cost carriers.
Leisure Travelers
Whereas business travelers often make up the bulk of a hotel's midweek business, leisure and tourist travelers fill the rooms on weekends. Leisure travelers come in four types but there may be some overlap among these groups:
• Package travelers • Mature travelers • International travelers • Free independent travelers
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Package Market
Package consumers purchase a combination of rooms and amenities for an inclusive price.
The advantages of packages include:
• Low price • The bundling of services that are not normally purchased, such as guided itineraries • The fact that everything is pre-‐planned and pre-‐arranged
Mature Travelers
Usually over 55 years of age, mature travelers are a force simply because of the sheer numbers of them on the road. They tend to travel extensively, sometimes favoring travel parties or tours. Unlike other classifications, the mature traveler is not a homogeneous group. And finally, they are a group of consumers looking for value in their purchases.
International Travelers
400 million people travel outside their home country every year, and international travelers account for 25% of the annual tourist spending in the U.S. As a group they tend to use intermediaries in their planning, such as consortiums, referral networks, and tour operators.
Free Independent Travelers
Free independent travelers are best characterized as younger travelers or those with more travel experience, who do their own planning and make up their own itineraries.
It is important to understand that these categories can overlap, and that different cross sections of people and groups require different marketing strategies to serve them effectively.
Transcript: Ask the Industry Expert: Implementing Market Segmentation Strategies
Why is market segmentation important?
Ultimately, market segmentation allows you to differentiate your markets, because one can't be all things to all people. It allows you to focus your sales and marketing efforts on those customers, or those customer segments, that are uniquely most likely to buy your product or your service. Also, from a financial perspective, it allows you to optimize your return on investment, because we are all very focused on return on investment. You want to spend the
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most appropriate marketing dollars against the most appropriate customer. Ultimately, the best segmentation matches the right product, with the right customer, at the right price point. And then finally, it allows you to capitalize on diverse market needs. You certainly don't want to put all your eggs in one basket, and most times, one segment for either a lodging or a hospitality business is not sufficient to optimize revenues and profits, therefore, you have to segment your market.
How should you choose the criteria that are important for successful market segmentation?
By focusing on the individual needs of a customer, you will focus on the criteria that are most important to that particular customer segment. You have to understand the value proposition of your product and service based on the needs of the customer. That value proposition, in many ways, is based on the demographics of individual market segments. Is it a specific industry type that you are interested in, a specific psychographic of an individual, or particular demographics based on geography, median income, or other specific criteria? You also want to focus on low-‐cost items that have the highest impact to optimize your return on investment. So, ultimately, the criteria is going to help you capitalize on those customer segments that have the greatest need for your product and service, and also yield the greatest value from the strengths that you offer a particular market.
How do you decide which segment should be selected?
Sometimes, the segments that you are going to focus on have actually been pre-‐selected for you based on the purpose-‐built nature of your particular product. For example, with the Ritz-‐Carlton Hotel Company, we're currently building two luxury hotels in the market of New York, each specifically designed to serve a different segment. The Ritz-‐Carlton on Central Park South will be focusing on high-‐end European and boutique-‐style travelers, whereas the Ritz-‐Carlton in Battery Park in downtown Manhattan will be focused on the Financial District business traveler and small meetings and conventions.
Ultimately, when deciding which segment you should be selecting, you should be focusing on where your history of success has brought you the greatest return on investment, where you have made previous investments with customers who are both familiar and have a need for your product and service, and then ultimately, determine which segment is going to bring you the greatest return on investment, and from that particular investment, which sub-‐segments will also bring you additional revenues and profits. For example, if you were planning on focusing on the group or meetings segment, then you should understand which sub-‐segment, which in the meetings world, will bring you the greatest yield. Is it the association groups, is it the corporate groups, or is it the individual, local, small, social meetings that happen in the individual neighborhoods?
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How should you use segment-‐of-‐one marketing?
Segment-‐of-‐one marketing is very, very powerful due to the unique buying habits and needs of individual guests. In fact, there is no need for segmentation if all people have all the exact same needs. So, the segment-‐of-‐one marketing allows you to tailor your message, ultimately, to the specific requirements of an individual or group of individuals. It also allows you to tailor the relevancy and frequency of your messaging based on those unique customer needs. It in turn allows you to mass customize, whether it is on-‐going communications, whether it is the product and service you are delivering to groups of customers, or ultimately, it is the way in which you communicate that message.
Transcript: Factors Involved in and Environmental Analysis
Just like scientists in a laboratory, market researchers use an environment analysis to evaluate key environmental trends and to identify a potential competitive advantage in connection with a business venture. In our laboratory metaphor, the business venture serves as the catalyst for the analytical process, the result of which is the competitive advantage.
Sociocultural environment
The relationship between marketing and society and its culture. This relationship includes the values and lifestyles of a population, while at the same time affecting how and why people live and behave as they do. Examples of sociocultural trends include:
• Americans are interested in eating low-‐fat foods yet indulging in sweets. • Many Americans are more health-‐conscious, seeking an improved diet, opportunities to
exercise. • Nonsmokers have become more aggressive in demanding smoke-‐free environments. • Devices that save time and tools to aid in relaxation and sleep have increased in
popularity because of a poverty of time. • Americans increasingly dine out and desire ethnic foods.
Demographic environment
The examination of the human population. Marketers often use the RAGE matrix (Race/ethnicity, Age, Gender, and Education) as basis for demographic analysis. Other factors include:
• Income • Population size • Geographical dispersion
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• Occupation • Religion • Sexual orientation
Demographics are often key variables for determining market segments and their related strategies.
Economic Environment
The conditions that will affect the amount of money that the people in a market have as well as their willingness to spend it. The primary economic factors are:
The Business Cycle
• Consists of four stages: prosperity, recession, depression, and recovery • During prosperity, businesses tend to expand and marketers benefit by introducing
luxury, high-‐priced products that target consumers with rising discretionary income. • During recessions, businesses tend to retrench and marketers focus on developing
"value" products that provide standard utility at lower prices. In a recession, dining out, entertainment, and travel are the first things consumers cut from their budgets.
• During depressions, businesses reduce staffing and cut all expenses. Many businesses may close, at least temporarily. The goal is to remain viable until the economy improves.
• During recovery, the challenge is to determine when prosperity will return and at what level.
Inflation
• A rise in price levels. If prices rise faster than personal income, consumer buying power declines.
• Inflation causes consumers to be less brand loyal, search for the lowest price, seek promotions, use coupons, and stock up on sale items.
Interest rates
• When interest rates are high, consumers and businesses tend to hold back on purchases—especially those that require long-‐term payments, such as buildings, homes, and cars.
• High interest rates discourage the development of new hospitality products, new additions or even costly renovations.
Unemployment
• A situation in which people who do not have jobs are actively looking for work.
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• When unemployment is especially low, service firms may have difficulty finding employees for their lower paying positions.
Income
• Personal income influences consumer buying power.
Technological Environment
The application to marketing of knowledge based on discoveries in science, inventions, and innovations, can be put into one of five classifications:
• Energy • Materials • Transportation • Communications and information • Genetic
Major technological breakthroughs—such as the Internet and nano-‐tecnology—can impact the economy in two ways:
• Start entirely new industries • Radically alter existing industries
For example, technology is revolutionizing the hospitality industry:
• Computerized restaurant ordering • Automated check-‐in/check-‐out • Web-‐based reservation systems • Faxes • Email • Guest rooms set up for computers/modems/Wi-‐Fi and touch-‐screens • Use of avatars to replace employees in redundant tasks
Technology has a tremendous impact on life-‐styles, consumption patterns, and the economy. For example, the ability of today's business person to simultaneously and instantaneously transmit and share voice, pictures, and graphics all over the world should reduce business travel as such technology becomes more common place.
Technology also has the potential to increase output and capital. Managers can forecast trends in the technological environment by constantly screening patent applications related to the industry.
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Political and Legal Environment
Environment, legal and regulatory trends affect marketing opportunities because they define the governmental constraints to which companies are subject. There are six general categories of their influence:
1. General monetary and fiscal policies affecting government spending, the money supply, and tax legislation
For example, tax laws may affect how much a business may deduct for business entertainment and meals, and this legislation, in turn, can negatively affect upscale restaurant businesses.
2. Social legislation and policies, such as civil rights laws, unemployment laws, and antipollution laws
For example, the American Disability Act had a big influence on how hotel rooms are being designed.
3. Government relationships with individual industries
These relationships can manifest themselves in the form of subsidies, tariffs, import quotas, and deregulation of industries. In turn, this type of legislation can affect the cost of goods and services needed for hospitality operations.
4. Specific legislation that affects marketing
Such laws fall into two main groups: those designed to regulate and maintain competition, and those intended to protect the consumer. The three regulatory agencies most directly involved in marketing include:
• The Consumer Product Safety Commission, which mandates safety standards for products. It can ban products, recall them, fine firms, and sentence company officers to prison.
• The Federal Trade Commission, which prohibits unfair methods of competition • The Food and Drug Administration, which enforces regulations concerning food and
drug products. In recent years, hospitality businesses have paid close attention to policies created by the U.S. Department of Labor, as well as legislation proposed by the House Committee on Energy and Commerce and the Senate Committee on Energy and Natural Resources, because of their impact on the industry as a whole.
5. Provision of information and purchaser of products
The government is the largest supplier of secondary marketing information, as well as being the largest single buyer of products. Through government documents and statistical abstracts,
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marketers can obtain much of the data they need to determine the appropriate market segmentation strategies. For example, census data can be a great source for predicting consumer trends. At the same time, the government is a major purchaser of hospitality products, especially room nights. For this reason, many hotel chains offer special government rates.
6. Political trends in foreign countries
In today's global economy, the political activities occurring in foreign countries have a significant effect on the US economy and US businesses, including the hospitality industry. For example:
• An increase in terrorism, regardless of where, has an effect on travelers, especially leisure travelers.
• War in the Middle East jeopardizes oil supplies and increases energy costs.
Competitive Environment
Comprises the number, types, and behavior of competitors the marketing manager must face. The competitive environment operates along a continuum ranging from pure competition to monopoly. A manager must identify the position along this continuum in which his business operates in order to develop appropriate competitive strategies.
Key points along the continuum are:
Pure Competition:
A market situation that develops when a market has:
• Relatively homogeneous products • Many buyers and sellers who have full knowledge of the market • Ease of entry for buyers and sellers
In this market, demand is flat for each individual producer, so all producers must set their price at the equilibrium price in order to sell any product. An individual producer has little or no impact on the market.
Oligopoly:
A small number of firms dominate the market. Develops when a market has:
• Essentially homogeneous products • Relatively few sellers • Fairly inelastic industry demand curves
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• Difficulty of entry for sellers
In an oligopolistic situation, competitors follow each other in their marketing strategies, including price.
Monopolistic competition:
A large number of suppliers offer similar products. Develops when:
• A market has many buyers and sellers • Each firm has a comparatively small percentage of the total market • The sellers offer different products at a range of prices based on quality, attributes, or
service • Sellers use marketing strategies such as branding, advertising, promotions, and personal
selling to convey product differences to buyers • Buyers recognize differences in products and are willing to pay different prices
The majority of the hospitality industry operates under conditions of monopolistic competition.
Monopoly:
A market situation in which one firm dominates and controls the total market.
Marketers should be aware of three major sources of competition:
• Brand competition: from marketers of directly similar products. • Substitute competition: from marketers of products that are not directly the same but
do satisfy the same needs • General competition: from marketers of all products competing for the customers'
limited buying power
Ecological Environment
Marketers must evaluate the impact of their product on quality of life. This evaluation must include: consideration of employment in their target community; the effects of air, water, and cultural pollution; and the potential depletion of natural resources. Organizations may implement programs designed to minimize or even enhance the ecological impact of their business. For example:
• Six Senses requires all its properties to follow stringent sustainable environmental guidelines, including water conservation, recycling, utilization of low energy lighting, and protection of local cultures.
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• The Heritance Kandalama Hotel in Sri Lanka is famous for its rigorous practice of the 7Rs (regulate, reduce, reuse, recycle, recover, renovate, rethink), which has resulted in no waste.
Transcript: Conducting an Environmental Analysis
When constructing an environmental analysis, marketers should consider the following elements.
Sociocultural
• How is the consumer's orientation towards time changing? • What are the standards for quality? Are they changing? • How important are health concerns becoming? Will this be changing? • What are the trends toward home-‐centeredness? • What are the personal finance trends that are occurring? • What are the trends in lifestyle diversity? Social
diversity? • What are travel trends? Who is traveling?
Demographic
• What demographic groups are on the rise domestically? Internationally? • What is the population growth rate domestically? In key foreign markets? • What key subcultures are emerging? • What are the religious trends domestically? In key foreign markets? • What are the occupational trends domestically? In key foreign markets? • What are the educational trends domestically? In key foreign markets? • What are the trends in income domestically? In key foreign markets? Is real growth in
income occurring?
Economic
• What fiscal and monetary measures are being developed domestically? Internationally? • What regulation and management of the economy is being used domestically?
Internationally? • In what stage of the business cycle (prosperity, recession, depression, recovery) is your
domestic country? In what stage are other key powers? • What is happening with world food production? • Is real world growth rising, stable, or declining? • What is the inflation rate domestically? Internationally?
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• What are the prevailing views about free trade? • What are the key economic indicators, such as employment, consumer price index,
housing starts, auto sales, weekly unemployment claims, GNP, savings rate, money supply, and retail sales?
Technological
• What new technologies are available in the areas of energy, materials, transportation, communications and transportation, and genetic (affecting food sources)? How important are these technologies to the hospitality industry now? Five years from now?
• What impact will these technological advances have on the hospitality industry? • What technological advances will create a competitive advantage?
Which technologies should be adopted now, which are still emerging? • Which technologies are becoming obsolete? • What technologies are already common among your competitors?
Political / Legal
• How stable is your domestic government? What are the chances of revolution? • What are the economic interests of the domestic government? • How dependent is your government on foreign capital? • What world conflict exists, or is likely to occur? How will it impact your business?
What are the political trends elsewhere? • What are the chances of political terrorism in your domestic country? What political
terrorism in other countries may affect your business? • What nations are gaining political power? • What revolutionary changes are occurring in other parts of the world? • What government regulations are on the horizon that may affect taxation, employment
benefits, minimum wage, labor laws, handicap accessibility, etc.? What are the political trends in these areas for the next five years?
Competitive
• Who is the competition? Now? Five years from now? • What are the strategies, objectives and goals of each major competitor? • How important is a specific market to each competitor and what is the level of its
commitment? • What are the relative strengths and limitations of each competitor? • What weaknesses make competitors vulnerable? • What changes are competitors likely to make in their future strategies? • What will be the effects of all competitors' strategies, on the industry, the market, and
our strategy?
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Source: Jain, Subhash C. (2000), Marketing Planning & Strategy, 6th Edition. Cincinnati, OH: South-‐Western College Publishing, p. 84-‐85.
Ecological
• What are the trends toward environmentalism domestically? In key markets? • How is ecological awareness determining purchasing behavior? • What ecological changes are affecting hospitality? • What ecological pressures on business exist from society? From the government? How
are these changing?
Environmental Analysis Resources
The Internet is an excellent source of information on trends. Further research can also be found in publications, including:
• UPDATE magazine for latest technology information • American Demographics for demographic and socio-‐cultural trends • U.S. Census data for demographic and economic information—can be broken down by
city or region • www.yahoo.com/travel for competitive information
When traveling in unfamiliar terrain, having the right map in hand makes reaching your destination much more likely. For a business, conducting a marketing environmental analysis of the current landscape is constructing the map of where it is. This map will then help it navigate toward business goals.
Transcript: Ask the Expert: Using the SWOT Model to Analyze Data
How does SWOT fit into the overall marketing process?
SWOT stands for strengths, weaknesses, opportunities, and threats. The strengths and weaknesses categories are based on internal issues, while opportunities and threats are based on external issues.
SWOT analysis is really a decision-‐making tool. Once you understand the external environment from your environmental analysis, you can combine any identified significant external opportunities or threats with an internal survey of your organization's significant strengths and weaknesses. Thus, SWOT provides a framework identifying and highlighting issues that are critical in determining decisions made about your organization.
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What do I do with it?
The goal of the SWOT analysis is to isolate the most crucial issues and to facilitate the development of your marketing strategy. Therefore, you will want to keep the items you list under each SWOT category as simple and as concise as possible, although a great deal of research may underlie each item. The SWOT analysis will allow you to get an overall view of the situation and to respond proactively.
In identifying your organization's strengths and weaknesses, try just quickly jotting down the characteristics of your firm. Then ask yourself: What distinctive competencies does your organization possess? Are there adequate financial resources? Does your organization possess cost advantages or competitive advantages? Is the management team effective? Is the organization innovative? Is there a clear strategic direction? Is there strong profitability? Good track record in implementing strategies? Is there a strong market image or strong marketing skills? Do you have strong operational skills or solid financial capitalization?
In identifying opportunities, use the environmental analysis to determine what isn't being done to meet customer needs. Ask yourself if there are additional customer groups you should be serving, or additional services you should be offering? Is the market growing rapidly? Are competitors weak? In terms of threats, use the environmental analysis to identify trends that might make your product or service obsolete. Also ask yourself: Are new competitors likely to enter the market? Are adverse regulatory policies on the horizon? Is the organization too dependent on one customer? Is the organization vulnerable to recession? Are current customers' tastes and needs changing? Are there adverse demographic changes occurring?
What are some examples of typical strengths and weaknesses in the hospitality industry?
Strengths are the competitive advantages and unique selling propositions that the company has the ability to bring to the market place. Possible strengths in the hospitality industry include:
• Low-‐cost, high-‐efficiency operating skill • Leadership in product and service innovation • Efficiency in customer service • Personal relationships with customers • Effectiveness in sales promotion • Convenient, desirable location
You may be able to identify many more strengths within your organization.
Weaknesses are factors that limit the ability of the firm to pursue new opportunities or achieve new competitive advantages. Examples of potential weaknesses in the hospitality industry include:
• Inadequate understanding of target market
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• Ambiguous service policies • Lack of quantitative goals • Poor product design • Lack of product/brand awareness • Laggard in technology integration
Of course, there are many others in addition to these.
How do I evaluate the results?
To evaluate the results of the SWOT analysis consider Sources of Marketing Opportunity. There are three sources of marketing opportunity: unmet customer needs, competitive weakness, and other environmental threats. These opportunities are revealed in a rigorous environmental analysis. Criteria for evaluating opportunities should include both quantitative and qualitative components (e.g., consumer needs and potential profitability).
Also recognize that threats can result in opportunities. The increasing proportion of working women was a threat to Avon because they were less likely to be at home to receive the Avon saleslady. Avon turned threat to opportunity by encouraging its salespeople to sell at the office, and Avon is now beginning to open retail stores.
However, just as a threat can be turned into an opportunity, the reverse is also true. Threats can come in three forms: (1) the firm misreads customer needs, (2) competitors introduce a similar or new product, and (3) the firm fails to foresee environmental changes that render a product entry obsolete.
Finally, remember that there are no right or wrong answers in a SWOT analysis: like the environmental analysis, it is a subjective process and open to different interpretations. However, it is very important to put some thought into the SWOT analysis because it will serve as the tool to guide the direction and focus of future strategies. Thus, you must use the knowledge and expertise you have acquired through your research to deftly define your strategic focus. Remember, also, that a SWOT analysis is just a snapshot at one point in time. Situations and trends will change with the passage of time. You should routinely perform a SWOT analysis and the organization should be flexible enough to continuously adapt to opportunities and threats identified and to capitalize on the strengths of the organization while seeking to improve the weaknesses.
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Transcript: Select a Target Market
A residential property centrally located in the fictional college town of Centerville is being converted into a boutique hotel. As part of his initial market research, the owner conducted an environmental analysis, which produced the following data:
Sociocultural Data
The broader Centerville area offers seven golf courses, including a Robert Trent Jones course located on the State University campus.
• Centerville is located on a large lake, so fishing and sailing are popular sports in the fall, spring, and summer, while snowmobiling and cross-‐country skiing are popular during the winter months.
• The Centerville area has a number of tourist attractions, including scenic hiking trails, wineries, and fall foliage.
• State University provides a number of events associated with the performing arts, including plays and music and dance recitals. Community theatre is also popular and Centerville supports three community theaters.
• State University also offers an art museum, and Centerville has a hands-‐on science museum.
• Centerville has 103 restaurants, ranging from cafés to fine-‐dining establishments. These dining establishments offer every type of food imaginable.
• Each year, Centerville hosts an Apple Harvest Festival; a Chili Cook Off; the Centerville Festival, to promote art appreciation; and the Grassroots Festival, a four-‐day music event.
Demographic Data
• The town of Centerville has a population of 29,872 permanent residents. • Whites make up 81% of the Centerville population, Asians comprise 10%, African-‐
Americans comprise 6.5 %, and Hispanics make up 3.6%. Overall, 11.5% of the Centerville population is foreign born. Women make up 48.3% of the Centerville population; 51.4% of the population is between the ages of 18 and 24 years of age.
• Most of Centerville’s population (86.7%) graduated high school and approximately 50% of the population seeks higher education. Currently, 42% of Centerville residents have four-‐year degrees.
• The student population of Centerville drops dramatically during the summer and winter breaks.
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• Visitors, such as prospective students, parents, alumni, recruiters, and academics, routinely visit the State University campus in Centerville. Parents arrive at the beginning and end of the academic year to assist their children with moving. Parents also arrive during Parents’ Weekend and Graduation Weekend. Alumni are present during Homecoming weekend. Recruiters arrive in October, November, February, and March. During these times, all hotels in the area are completely booked. Further, during Graduation Weekend, all hotels within a 50-‐mile radius of the campus are full.
Economic Data
• The average Centerville household income is greater than $44,000; however, the median Centerville income is $37,874, slightly lower than the median income of the United States as a whole.
• Thirty-‐nine percent of Centerville’s population is employed in service industries. • The unemployment rate in Centerville is low at 2.3%. • Centerville is considering instituting a living-‐wage law that would require that all full-‐
time workers earn a minimum of $8.96 an hour, or $10.58 for jobs without health benefits, and receive 15 paid days off a year.
• Interest rates are currently the lowest they have been in decades.
Technological Data
• Centerville has its own Web site, and a Web cam located in the downtown area gives visitors to the Web site a constant view of life in Centerville.
Political/legal Data
• Construction plans for any type of food service or retail establishment must be approved by Center County and by the Environmental Health Division of the Center County Health Department. Plans submitted must be comprehensive, and should include the proposed layout of the establishment, proposed methods of pest/rodent control, plumbing and sewage specs, and the manufacturers and model numbers of any equipment that will be used.
Competitive Data
• Gates Hotel is a 150-‐room, full-‐service, three-‐star hotel owned by the university and located in the center of the State University campus. It has an occupancy rate of 85% and an average daily room rate of $160. The hotel is a popular spot for recruiters, visiting academics, and parents because of its superior campus location, but it also attracts some corporate meetings. It has a number of smaller meeting spaces, capable of holding 15 to 75 people, and a high-‐tech amphitheatre-‐style meeting room with executive seating designed to hold up to 150 people. The hotel offers guests Internet
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access and voice mail. It has one large ballroom that can hold 400 guests seated at tables. The hotel also boasts an upscale restaurant that overlooks the campus, but the food is average and the prices are high. The restaurant does the bulk of its business at lunch time.
• Only two other hotels are near the campus. One, the Hillside Lodge, is a 41-‐room economy inn located a mile west of campus, offering rooms with televisions and air conditioning. A free continental breakfast is available. Rates run from $30-‐$60 per night. A 94-‐room Best Western motel is located four miles east of campus. Its rooms have refrigerators and televisions; executive rooms have microwaves, data ports, and fireplaces. Rates run from $60-‐$100 per night.
• Other accommodations in Centerville include a 177-‐room Holiday Inn located in the downtown area five miles from the university campus; a 121-‐room Ramada Inn and a 106-‐room Clarion Hotel located ten miles from campus near several shopping centers and a small mall; and a 100-‐room Courtyard Hotel located near the airport and approximately 20 miles from campus. In addition to these major properties, 25 inns and bed & breakfasts are in the area. Rates at these latter properties range from very cheap ($30 per night) to expensive ($350+). The largest of these properties has 35 rooms, while the smallest has only one, but most of the bed & breakfasts offer two to four rooms for rent. The closest of these accommodations is five miles from campus; the farthest is 30 miles away.
Ecological Data
• Centerville is ecology conscious and recycling is mandatory.
Transcript: Steps to Determine a Strategic Position
Analyze
Analyze product attributes important to customers.
Attributes should be:
• Salient: top of the mind • Determinant: actually determine the choice of a product or service • Important: become important to customers after they've made the choice
Examine
Examine distribution of these attributes among different market segments.
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To which target market do you want to direct your efforts?
What is the target market’s perception of your product regarding each of the attributes?
Determine
Determine the optimal position for the product with regard to each attribute.
In positioning your product, take advantage of your strengths, while trying to avoid direct competitors.
Choose
Choose an overall position.
Try to position your product so you are competing with the fewest strong competitors, yet establishing the position that focuses on the attributes that are most important to your target market.