Marketing for Hospitality and Tourism 6th Edition

635 Pages·2016·18.33 MB·English

by  Philip R. Kotler

M
Marketing for Hospitality and Tourism
a
r
Kotler Bowen Make
k
e
Sixth Edition
t
i
n
g

f
o
r

H
o
s
p
i
t
a
l
i
t
y

a
n
d

T
o
u
r
i
s
m

K
o
t
l
e
r

e
t

a
l
.

ISBN 978-1-29202-003-7 6
e
9 781292 020037
Marketing for Hospitality and Tourism
Kotler Bowen Make
Sixth Edition
ISBN 10: 1-292-02003-2
ISBN 13: 978-1-292-02003-7
Pearson Education Limited
Edinburgh Gate
Harlow
Essex CM20 2JE
England and Associated Companies throughout the world
Visit us on the World Wide Web at: www.pearsoned.co.uk
© Pearson Education Limited 2014
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted
in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without either the
prior written permission of the publisher or a licence permitting restricted copying in the United Kingdom
issued by the Copyright Licensing Agency Ltd, Saffron House, 6–10 Kirby Street, London EC1N 8TS.
All trademarks used herein are the property of their respective owners. The use of any trademark
in this text does not vest in the author or publisher any trademark ownership rights in such
trademarks, nor does the use of such trademarks imply any affi liation with or endorsement of this
book by such owners.
ISBN 10: 1-292-02003-2
ISBN 13: 978-1-292-02003-7
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
Printed in the United States of America
1112223332691481473693337751991513
P E A R S O N C U S T O M L I B R AR Y
Table of Contents
1. Introduction: Marketing for Hospitality and Tourism
Philip R. Kotler 1
2. Service Characteristics of Hospitality and Tourism Marketing
Philip R. Kotler 35
3. The Marketing Environment
Philip R. Kotler 61
4. The Role of Marketing in Strategic Planning
Philip R. Kotler 93
5. Marketing Information Systems and Marketing Research
Philip R. Kotler 123
6. Consumer Markets and Consumer Buying Behavior
Philip R. Kotler 163
7. Organizational Buyer Behavior of Group Market
Philip R. Kotler 193
8. Market Segmentation, Targeting, and Positioning
Philip R. Kotler 217
9. Designing and Managing Products
Philip R. Kotler 247
10. Internal Marketing
Philip R. Kotler 285
11. Pricing Products: Pricing Considerations, Approaches, and Strategy
Philip R. Kotler 311
12. Distribution Channels
Philip R. Kotler 349
13. Promoting Products: Communication and Promotion Policy and Advertising
Philip R. Kotler 379
I
444556662592600133597153
14. Promoting Products: Public Relations and Sales Promotion
Philip R. Kotler 423
15. Professional Sales
Philip R. Kotler 453
16. Direct and Online Marketing: Building Customer Relationships
Philip R. Kotler 495
17. Destination Marketing
Philip R. Kotler 529
18. Next Year's Marketing Plan
Philip R. Kotler 567
Appendix: The Five-Gap Model of Service Quality
Philip R. Kotler 601
Appendix: Forecasting Market Demand
Philip R. Kotler 605
Index 613
II
Introduction: Marketing
for Hospitality and Tourism
From Chapter 1 of Marketing for Hospitality and Tourism, Sixth Edition. Philip Kotler, John T. Bowen,
James C. Makens. Copyright © 2014 by Pearson Education, Inc. All rights reserved.
1
Falls Church, VA, USA—August 19, 2011: Chipotle Mexican
Grill sign. Chipotle Mexican Grill, Inc. (NYSE: CMG), is a chain
of restaurants in the United States, United Kingdom, and Canada
specializing in burritos and tacos. The name derives from chipotle,
the Mexican Spanish name for a smoked, dried jalapeño chili pepper.
The company currently has more than 1,000 locations. Courtesy of
Marcnorman/Dreamstime.
2
Marketing is so basic that it cannot be considered a separate function. It is the whole business seen from
the point of view of its final result, that is, from the customer’s point of view. . . . Business success is not
determined by the producer but by the customer.
—Peter Drucker
Introduction:
Marketing for
Hospitality and
Tourism
Objectives
Chipotle Mexican Grill
After reading this chapter, you
Chipotle opened in 1993 with the goal of serving fresh, gourmet-quality food at should be able to:
reasonable prices. Over 1,200 restaurants and several million burritos later, the
goal remains the same. 1. Understand the relationships
Chipotle is the dream and creation of Steve Ells. A graduate of the Culinary between the world’s hospitality
Institute of America, Steve learned the philosophy and skills of classical French and travel industry.
cooking. After graduation, Steve had no intention of opening a business but in- 2. Define marketing and outline
stead moved to San Francisco where he worked for the renowned Star Restau- the steps in the marketing
rant under the direction of Jeremiah Tower. process.
The many tacquerias of San Francisco opened Steve’s eyes to opportunity.
3. Explain the relationships
He watched how the employees handled the lines of customers. Steve then started
between customer value and
crunching the numbers napkin.1 Realizing the profit potential of the restaurant, he
satisfaction.
decided to open a quick-service Mexican restaurant.
4. Understand why the marketing
He found an old ice cream parlor near the University of Denver. With the support
concept calls for a customer
of his father who invested $85,000 and a real estate broker, he was able to open the
first Chipotle, which opened in July 1993.2 orientation.
The principles upon which Chipotle operates are discussed below. 5. Understand the concept of the
lifetime value of a customer
and be able to relate it to cus-
Food with Integrity (FWI): The Cornerstone
tomer loyalty and retention.
of Chipotle’s Vision
Chipotle sources food that is sustainably raised, has great taste, great nutrition,
and great value. When possible they use animals raised without antibiotics, and
locally produced produce (ideally organice).3
Fresh Ingredients
True to the tradition of French cooking, Steve insists on fresh products—not
canned, frozen, or freeze-dried.
Organic, Naturally Raised Foods
With an emphasis on great-tasting food, quality, and simplicity, Steve entered the
natural food niche in restaurant operations. The aim was to review each ingredi-
ent used in Chipotle and explore the possibility of incorporating as many organic
or naturally raised foods as possible.
3
Introduction: Marketing for Hospitality and Tourism
In 2001, Chipotle teamed up with Niman Ranch to provide free-range pork for the
carnitas used in each restaurant. An additional 200 family farms have since agreed to
Chipotle’s standards for raising hogs.
Chipotle posters describe how today’s corporate agriculture has replaced the prac-
tices of family farmers with what Steve described as the “senseless exploitation” of farm
animals.
Steve said that dining is about the senses so that when Chipotle makes an emotional
appeal, it wins with customers. He believes that once customers know about the Niman
Ranch association, some will buy Chipotle because of taste, others because Niman does
not use antibiotics, and others to support the family farmers. It doesn’t matter to those at
Chipotle what the reason might be because all support the cause of providing food with
integrity (FWI).
Chipotle requires the chickens it buys be fed an all-vegetarian diet, are not given an-
tibiotics, and be raised in more humane cages than large producers use. Chipotle’s size
means that it also must buy food from large producers, as well as small ones. Tyson devel-
oped a farm just for Chipotle to supplement the smaller growers.4
Restaurant Environment
Many Mexican food restaurants look alike with photos of Pancho Villa or other decorations
that the public has come to expect as normal. A Chipotle restaurant is different!
The kitchen and food preparation areas are right in front of the customers and were
designed to appeal to the senses. Customers observe freshness, cleanliness, and variety at
the same time they smell spices and hear the sizzle of meat on the grill. All of this stimu-
lates the appetite and blends the ambience of food preparation with food consumption.
The most crowded part of any home during a party always seems to be the kitchen. Steve
put this knowledge to work when planning the restaurant.
Instead of settling for serapes on the wall, Steve asked sculptor friend Bruce Gueswel
to design artwork appropriate to the environment. This led to a unique line of original art-
work and furniture using a variety of materials, including welded steel, corrugated metal,
and wood to depict what has been described as modern renditions of ancient Mayan hi-
eroglyphics. Chipotle is the only quick-service restaurant that commissions original art for
each location. It’s an example of the attention to detail that defines Chipotle.
Chipotle restaurants have been given awards for design by the American Institute
of Architects. The style, known as “cantina moderne,” employs metals, plywood, con-
crete, and glass to provide a sophisticated postindustrial feel with exposed duct work
and pipes.
Each piece of music played within a Chipotle restaurant was self-selected by a team
from Chipotle management. Described as “Funky Cool Groovish,” each CD is designed for
self-destruction after a set period of time to ensure freshness in the music as well as the
food.
Pricing
Unlike most quick-service restaurant chains, Chipotle offers no coupons or specials. At
Chipotle all food all the time is either full price or free.
Prices are comparatively reasonable but do vary by the marketplace. A typical crowd
in the Denver restaurant included two police officers, young career professionals, and a
woman with a baby. Most were dressed in casual attire. Thousands of promotional “bucks”
for one free burrito are given away during the year. These are numbered and bear the en-
graving of a Maya prince with the words “In Burritos We Trust” above the picture and “Vaya
Con Tacos” below. Free burrito promotions have proven to be very popular and productive
in new markets. From there, word of mouth supported by free publicity in newspapers and
magazines serves as the principal means of promotion.
Loyalty
Repeat visits by customers have proven to be very high within Chipotle restaurants. So
too has staff loyalty. Chipotle’s restaurant and kitchen designs intentionally place crew
4
Introduction: Marketing for Hospitality and Tourism
members up front. Managers encourage restaurant employees to have genuine interac-
tions with customers no matter their job, whether preparing food or serving customers
during our busiest period. They focus on attracting and retaining people who can deliver
a great experience for each customer. This requires employees give customers individual
attention and make every effort to respond to customer suggestions and concerns in a hos-
pitable way. Chipotle feels its focus on creating a positive and interactive experience helps
build loyalty and enthusiasm for its brand among restaurant managers, crew members,
and customers alike.5
Social Networking
Social networks such as youtube.com and myspace.com are a relatively new, yet powerful
form of media that many companies are trying to incorporate into their marketing plans. Chi-
potle has mastered the use of social networks. Several years ago it launched a Facebook page
that now has over 1½ million friends. Chipotle offered a $30,000 prize to the universities or
college teams that could produce the best Chipotle advertisement. Chipotle received forty-five
entries from eighteen colleges and universities. The winners received air time in regional tel-
evision and movie theaters. But many of the advertisements ended up on youtube.com and
myspace.com. Some have received over a million hits. The ads were created by the generation
that uses this media and were both an effective and an efficient way for Chipotle to penetrate
this media.
This is one of the reasons why Chipotle spends less than 1 percent on advertising,
whereas other restaurant chains average 4 percent. Steve Ells states, “Advertising is not
believable.” Chipotle prefers to create satisfied customers who will go out and tell their
friends great things about Chipotle.
Over 1½ million people have given Chipotle’s Facebook page a thumbs-up, indicating
they like it. One of the characteristics of social media is that the content is authentic. Not
everything posted on Chipotle’s wall is positive. However, a representative of Chipotle re-
sponds to both the positive and negative comments, usually within the hour. Chipotle uses
social media to engage its customers.
Steve Ells realized that a successful restaurant had to have a great atmosphere, a good
product, effective marketing communications, and talented people in addition to good
food. Chipotle created an integrated marketing program that delivers superior value, build-
ing customer relationships and delight. Chipotle’s customers responded by patronage and
advocacy for Chipotle. This is the essence of marketing.6
■■■ Your Passport to Success
As a manager in a global economy, marketing will greatly assist your personal ca-
reer and the success of the enterprise you manage. In today’s hospitality/travel
industry, the customer is global and is king or queen. This title is bestowed not
because of hereditary rights but because customers have the ability to enhance or
damage your career through the purchase choices they make and the positive or
negative comments they make to others.
The travel industry is the world’s largest industry and the most international
in nature. International travel has receipts of over $1 trillion and over 1 billion
travelers.7 China’s 1.3 billion people take over 2.1 billion domestic trips each year,
spending US $237 billion. The rapid growth of domestic tourism in China, com-
bined with over 135 million inbound tourists, has led to a rapid growth of hotels,
resorts, airport facilities, and other facilities to support tourism.8 Thirty years ago
there was nothing in Dubai but a creek, a sheik’s palace, and a reputation as a
smuggling capital of the Arabian Gulf. Today Dubai boasts some of the world’s best
hotels. One of the tourism projects is DUBAILAND, a US $70 billion tourism com-
plex covering almost 70,000 acres that will include theme parks, resorts, shopping,
sports facilities, and cultural venues. Some of the project is complete and attract-
ing visitors; when the entire project is complete, it will attract 15 million visitors a
5