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Chapter Three

Chapter Three. The Marketing Mix and the Product/Service Mix. Evolution of Marketing. 4 Ps Traditional marketing 7 Ps Adds the service component of marketing 13 Cs Incorporates the focus on customer loyalty. 4 Ps of Marketing. Product Price Place (distribution) Promotion.

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Chapter Three

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  1. Chapter Three The Marketing Mix and the Product/Service Mix

  2. Evolution of Marketing • 4 Ps Traditional marketing • 7 Ps Adds the service component of marketing • 13 Cs Incorporates the focus on customer loyalty

  3. 4 Ps of Marketing • Product • Price • Place (distribution) • Promotion

  4. 7 Ps of Marketing • Product • Price • Place • Promotion • Process • Physical attributes • People

  5. Thirteen Cs of Marketing • Customization • Communications • Customer measurement • Customer care • Chain of relationships • Capacity control • Competition • Customer • Categories of offerings • Capabilities of firm • Cost, profitability, and value • Control of process • Collaboration within firm

  6. 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

  7. 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

  8. 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

  9. Making the Product Decision • Step 1: Identify the target market • Step 2: Define your business goals • Step 3: Assess capabilities

  10. 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?

  11. 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?

  12. The Product Life Cycle Maturity Decline Sales Growth Introduction Time

  13. 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….

  14. 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

  15. 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

  16. 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”

  17. 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

  18. How to Determine Where You Arein 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

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