MGMT 471 Exam 2

Four P's Marketing Mix

Product, Price, Place, Promotion

Factors changing today's marketing communications

-better informed
-more communications empowered
-do not rely on marketer-supplied information
-seek out information on their own
-connect with other consumers
-create their own marketing messages

What is the purpose of advertising

Promotion
-sell products/services
-Create awareness and familiarity
-enhance brand image
-build customer demand
-advertise new products/services

Buying decision process

1. Problem recognition
2. Information search
3. Evaluation of alternatives
4. Purchase decision
5. Post-purchase behavior

7 advertising techniques

- Basic Appeals
- Attention-getting headlines
- Slogans
- Testimonials
- Product Characters
- Comparison of products
- Repetition

Parts of Basic Appeals

-Biological: health and safety
-emotional
-rational: reasoning abilities, cost, safety, convenience
-social: social pressures, weight, acne, fashion

what is target audience defined by

-Geographic
-Demographic: (gender, age, education)
-Psychographic: (lifestyle, social class, personality, etc)

Examples of stakeholders

-Customers
-Business Partners
-Employees and unions
-Governments
-Other critical players in the environment

Strategic relationship management

strategic management of relationships with all relevant stakeholders in order to achieve long term shareholder value

why make good with Mom

-books the hotels, travel arrangements, handles most of the money
-usually the decision maker for the family

Benefits of Customer Relationship Management

-Retaining customers is more cost effective than recruiting new ones
-80/20 rules
-Customer Retention
-Increase in share of wallet through cross selling and up selling

what is the 80/20 rule

80% of your business comes from 20% of your customers

Traditional marketing focus

expand customer base, increase market share by mass marketing
product oriented

Customer Relationship model

establish a profitable, long term, one-to-one relationship with custonemrs; understanding their needs preferences, and expectations

Three levels of CRM

Strategic CRM
operational CRM
Analytical CRM

Strategic CRM

competitive differentiation, market segmentation, strategic positioning

Operational CRM

-Customer service
-customer relationships
-customer databse

Analytical CRM

- data analysis
- customer knowledge
- provide behavioral patterns

costs of CRM/DBM

-IT infrastructure
-process change
-training cost

UNWTO

United Nations World Tourism Organization

UNWTO's definition of tourism

"Tourism comprises the activities of persons traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business, and other purposes."

why are people travelling more

-longer life span
-flexible work hours
-greater ease of travel
-increase in disposable income and the standard of living
-the opening of borders
-more people with the urge to travel

5 ages of tourism

Pre Industrial Revolution, Railway, Automobile, Jet Aircraft, Cruise Ship

hub and spoke system

benefits:
-airlines can service more cities at a lower cost
-airlines can maximize passenger loads from small cities

No central hum (cost leadership strategy)

-one plane fits all
-Point to point flying (no central hub)
-simple in flight service
-no meals
-no assigned seats

CVB means

Convention and Visitors Bureaus

example of CVB

Visit anaheim
-enhance toruism
-make people stay longer
-assisnt associations and other with conventions preparations
-encourage tourists to partake of the historic, cultural, and recreational opportunities the city or area has to offer

benefits of tourism

- One of the most important sources of employment.
- Fastest-growing economic sector in terms of foreign exchange earnings.
- Leading producer of tax revenues.
- Stimulates investment in infrastructure - helps to improve the living conditions (especially in developing countries).
- Intercultural awareness, international understanding, etc.

economic impacts of tourism

direct, indirect, induced

direct effect of tourism

immediate effects of changes in tourism expenditures
ex. hotels, restaurants, etc

Indirect effects of tourism

production changes resulting from various rounds of re-spending
ex. suppliers, farmers

induced effects

changes in economic activity resulting from household spending of income earned directly or indirectly as a result of tourism spending.
ex. employees supported directly or indirectly by tourism spending- dining, entertainment, shopping, etc

leisure before

symbol of social status
-available time and absence of necessity of being occupied
-leisure leads to a life of contemplation and true happiness

Modern leisure

time not spent at work
-discretionary time
-not only for the privileged

Government sponsored recreation

national parks service in the US
-founded 1961
-conserves park resources, preserves the environment for public and future generations

4 main revenue sources for national parks

-recreation fees
-filming and photography
-events
-individual donations

commerical recreation

indoor/outdoor recreational activities provided on a fee for service bases
ex. theme parks, attractions, clubs

clubs

-social recreational professional gatherings
-similar to hotel managmenet but guests have more attachement

Main revenue sources for clubs

annual memberships
dining
clothing
events

tokyo disneyland vs disneyland paris

Tokyo
-8.5 mil inhabitants
-6 miles away from dt tokyo
-less rain

Paris
-2.3 mil inhabitants
-20 miles from paris
-more rain days

euro disney's bad start

-europeans dont like americans
-no alcohol policy
-euro feels like business

Service failure occurs when

performance falls below a customer's expectations in such a way that leads to customer dissatsifaction

Service recovery refers to

the actions taken by a firm in response to service failure

How many people encounter a problem but don't complain

50%

how many people encounter a problem and complain to management or company headquarters

1-5%

how many people encounter a problem and complain to a frontline employee

45%

Recovery paradox

"A good recovery can turn angry, frustrated customers into loyal ones. It can, in fact, create more goodwill than if things had gone smoothly in the first place"

Challenges with service recovery paradox

-only a small percent of customers complain
-service recovery must be excellent
-Service recovery can be expensive

The service recovery paradox is more likely to occur when

-The failure is not considered by the customer to be severe
-the customer has not experienced prior failures with the firm
-the customer perceives that the company had little control over the cause of the failure

Service guarantee

guarantee that a product offered by a firm will perform as promised and if not, then some form of reparation will be undertaken by the firm

why aren't services not often offered a guarantee

-perishability
-service is intangible

characteristics of an effective service guarantee

-unconditional
-meaningful
-easy to understand and communicate

reasons why companies might not want to offer a service guarantee

-existing service quality is poor
-doesnt fit the image (food trucks)
-too uncontrollable
-fears of abuse of guarantee
-costs outweigh benefits
-customers perceive little risk in the service

what is servicescape

concept that emphasizes the impact of the physical environment in which a service process takes place

exterior elements of servicescape

Landscape, exterior design, signage, parking, surrounding environment

Interior elements of servicescape

interior design, design and decor, equipment, signage, layout, air quality, temperature and ambiance

three ways that servicescape effects buyer

Message creating
attention creating
effect creating

Message creating medium

servicescape
-symbolic cues to communicate the distinctive nature and quality of the service experience

Attention-creating medium:

Make servicescape stand out from competition and attract customers from target segments.

• Effect-creating medium:

Use colors, textures, sounds, scents and spatial design to enhance desired service experience.

How Casinos Make Money

Many levels of government have authorized multiple forms of gambling
• Each state is free to regulate or prohibit the practice within its borders
• Now only two states (Hawaii & Utah) do not permit some form of gambling
-Charging for services provided (less common)
-Arranging for players to play against the casino (more common):

Drop (handle)

Money the casino collects from all gambling activities (total amount of cash + markers) during a given time frame

Paid out:

• Money given to a player for a winning bet

Hold (win or house win):

- Difference between money wagered and the amount of winning bets
- "money the casino holds onto when gambling activity ceases"

Hold Formula

Drop - Paid Outs

Issuing credit

High rollers do not typically bring money/cash with them
• They establish accounts with the casino
• Casinos set a credit limit based on the player's ability to repay
• An account for the player is created
• The player must sign a marker to withdraw from his/her account

Marker:

a signed document that is essentially a loan from the casino to the customer.

Offering comps in casinos

The complimentary goods & services that casinos provide to their players

Why offer comps?

• Motivate the players to gamble longer
• Motivate the players to return as loyal customers
• Highly valued by players
• Players even include them in their personal calculations when determining their overall experience/value

Using the HOLD PERCENTAGE (financial report) as a control:

• The actual hold % should match the theoretical hold %
.• If it does not match, an investigation is conducted to determine the cause

Possible cause of hold % not matching theoretical hold?

• Slots: Perhaps the equipment is malfunctioning.
• Roulette: Perhaps roulette wheels need maintenance
.• Table games: Perhaps employees are stealing.
• CHEATING is always a possibility and usually the first to be investigate:
• 1960s example: scratching her scalp -> Lodging a gaming chip?

4 key elements of slot management:

1. Machine types
2. Hit frequency
3. Floor configuration
4. Servicescape (design, color, sound, music etc.)

MICE Stands For:

Meetings, Incentives, Conventions, Exhibitions

Meetings:

• Events that gather people together in the purpose of discussion, sharing information, or solving problems.

Incentives:

• Rewarding and motivating sales representatives, dealers ,distributors, production worker, and many more. Companies may incentivize their staff by rewarding them with traveling trips when sales targets reached. The rewards may include hotel stays, tour packages, and planned activities

Conventions:

• Similar to meetings where people gather for opportunities, exchange ideas, views of points, and information. People interested in conventions can pay a fee and access all the sessions, discussion, food and beverage, and sites visits.

Exhibitions:

• Activities organized to showcase new products, service, and information to those whom it may be of interest. The attendees or the buyers need an invitation/ticket to be allowed and visit in order to avoid carrying capacity of the place or venue

what is the highest revenue contributor to the travel industry

MICE industry

how much more does a MICE tourist spend compared to other tourists

twice the average amt

MICE BEFORE COVID-19:

• The events industry contributed more to GDP than air transportation, movie production, music recording, or performing arts.
• According to the U.S. Bureau of Labor Statistics, the event planner profession is expected to grow 10% from now — a faster rate than the average growth rate for all occupations.

How Events Have Changed

-hybrid
-virtual

Event Planning Process

1. Research
• Gathering Information, conducting analyses
2. Design
• Allows freedom in creativity
• Brainstorming innovative ideas
3. Planning
• Budget, negotiation, contracts, site selection, timeline, etc.
4. Coordination
• Directing and controlling the performance
5. Evaluation

DMC

Destination Management Company

DMC What are they?

• a locally based, for-profit tourism business whose function is to provide groups (and individuals) with services to meet their travel, meeting, and entertainment interests/needs at a specific time and place.
• a professional services company possessing extensive local knowledge ,expertise and resources, specializing in the design and implementation of events, activities, tours, transportation and program logistics.

DMC vs. travel agents?

• Site specificity
• Wide array of services: DMC can offer as little as group transportation - andas much as complete responsibility for all activities of a 100,000 personconvention in a specific city (e.g., tours, transportation, convention staffing,extra services such as entertainment and décor).

What do event attendees want?

• More networking - longer breaks, space/design for collaboration
• Active instruction style
• It is more about the "experience."

Challenges for MICE:

• Attendees are being more selective.
• Attendees are no longer looking for passive learning sessions.
• With the amount of content available online, the incentives for a participant to travel and attend a conference have changed

Unique Careers within the MICE industry

Sommelier
Pastry Chef
Artist
Coffee Curator

What is culture

the collective programming of the mind distringuising the members of one group or category of people from others

Hofstede's Cultural Dimensions

-high vs low power distance
-individualism vs collectivism
-masculinity vs. femininity
-High vs Low uncertainty avoidance

limitations of hofstede's cultural dimensions

-Missing countries
-ignores differences within clusters

Individualism vs Collectivism

Individualism (USA, Canada, European countries)
-individuals are expected to take care of only themselves and their immediate families
-autonomy, individual achievement, and privacy

Collectivism (Asia)
-group, family, organization, loyalty, devotion
-tightly knit framework in society where individuals can expect their relatives or members of a particular in group to look after them in exchange for unquestioning loyalty

Masculinity vs Femininity

Masculinity (japan, mexico, italy, usa)
-Success, assertive acquisition of money/power achievement, goal oriented
-preference in society for achievement, heroism, assertiveness and material rewards for success

Femininity -Finland, Denmark, Sweden, Norway)
• Equality of genders, caring for disadvantaged, harmony
• Femininity stands for a preference for cooperation, modesty, caring for the weak and quality of life

High vs. Low Power Distance

High Power Distance: (Philippines, HK, India, Japan)
• Accept position, follow authority, concentrated authority, hierarchical
• People accept a hierarchical order in which everybody has a place and which needs no further justification.

Low Power Distance: (USA, Canada, Sweden, Denmark)
• Avoid concentration of authority, decentralized, fewer layers of management
• People strive to equalize the distribution of power and demand justification for inequalities of power.

High vs. Low Uncertainty Avoidance

High Uncertainty Avoidance: (Japan, Greece, France)
• Threatened by ambiguity, need stable & predictable workplace, reliance on rules
• Countries exhibiting strong UA maintain rigid codes of belief and behavior and are intolerant of unorthodox behavior and ideas.

Low Uncertainty Avoidance: (USA, Canada, Singapore, HK)
• Embrace unpredictable, less adherence to rules, procedures, orhierarchies, risk taking desirable
• Weak UA societies maintain a more relaxed attitude in which practicecounts more than principles.

examples of cultural differences

-Gestures
-Appearance
-communication styles

Globalization

-strong demand from all over the world
-saturated domestic market
-partnership
-internet access: world has shrunk
-strong demand for global talent