THC 7

Organization

Companies align their organization's structure, policies, and culture to the changing requirements of business strategy.

Processes

Companies build cross-functional teams that manage core business processes to be superior competitors.

Resources

Companies decide to outsource less critical resources. They identify their core competencies and use them as the basis for their strategic planning.

Question marks

Company business that operate in high-growth markets but have relatively low market shares.

Concentric diversification strategy.

Company seeks new products that have technological and/or marketing synergies with existing product line, even though the product may appeal to a new class of customers.

FOUR MAJOR ORGANIZATIONAL LEVELS

Corporate Level Division Level Business Level Product Level

Microenvironment factors

Customers, competitors, distribution channels, suppliers.

Stakeholder

The principle that a business must at least strive to satisfy the minimum expectations of each stakeholder group.

Competencies Scope

The range of technological and other core competencies that the company will master and leverage.

Overall cost leadership.

The real key is for a firm to achieve the lowest cost among those competitors adopting a similar differentiation or focus strategy

Quality

The totality of features and characteristics of a product that bear on its ability to meet customer needs.

Market-segment scope

The types of market or customers that the company will serve.

"GREENING" OF THE HOSPITALITY INDUSTRY

The use of outside natural landscaping and inside use of light and plants

Needs

These include basic physical needs for food, clothing, worth, and safety; social needs for belonging, affection, food and relaxation; esteem needs for prestige, recognition, and fame; and individual needs for knowledge and self-expression

MANAGING CAPACITY AND DEMAND

is a key function of hospitality marketing

Market

is a set of actual and potential buyers who might transact with a seller

Transactions

is marketing`s unit of measurement. A transaction consists of a trade of value between two parties.

Exchange

is the act of obtaining a desired object from someone by offering something in return

Vertical scope

The number of channel levels from raw materials to final products

MISTAKES

-Leaving cash-cow businesses with too little or too much in retained funds -Making major investments in dogs, but failing each time -Maintaining too many question marks

Corporate level

-is responsible for designing a corporate strategic plan to guide the entire enterprise. -they makes decisions

THREE IDEAS DEFINE STRATEGIC PLANNING

1. decided which business entities deserve to be built, maintained, phased down, or terminated. 2. Assessing accurately the future profit potential 3. Game plan

Forward integration

A hotel company acquires a tour a wholesaler or travel agents.

Backward Integration

A hotel company acquires one of its suppliers.

Horizontal integration

A hotel company acquires one or more competitors, provided that the government does not bar the move.

Opportunities

A marketing opportunity is an area of need in which company can perform profitably.

ALTERNATIVE OBJECTIVES

BUILD HOLD HARVEST DIVEST

INTEGRATIVE GROWTH OPPORTUNITIES

Backward Integration Forward Integration Horizontal Integration Concentric diversification strategy

CHARACTERISTICS OF SERVICE

Intangibility Inseparabiity Variability Perishability

Stars

The market leader in a high-growth market. This does not necessarily mean that the star produces a positive cash flow for the company.

Macroenvironment forces.

Demographic-economic, technological, political-legal, competition, and social-cultural.

STRATEGIC PLANNING GAP

IS THE GAP BETWEEN FUTURE DESIRED SALES AND PROJECTED SALES

BUILD

Increase the SBU`s market share; appropriate for question marks

HARVEST

Increase the short term cash flow; for weak cash cows; can also be used by question marks and dogs

MISSION STATEMENT'S CHARACTERISTIC AND FOCUSED GOALS

Industry scope Products and application scope Competencies scope Market-segment scope Vertical scope Geographical Scope

Consistent

Long-run market-share growth and high current profits, for example.

Quantitative

Managers use the term goals to describe objectives that are specific with respect to magnitude and time.

Hospitality Marketing

Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.

Marketing is part of everyone`s job.

Marketing`s task is to design a product-service combination that provides real value to targeted customers, motivates purchase, and fulfills genuine consumer needs.

Demands

People have almost unlimited wants, but limited resources. they chose products that produce the most satisfaction for their money. When baked by buying power, wants become demand.

HOLD

Preserve market share; for cash cows

FIVE MARKETING MANAGEMENT PHILOSOPHIES

Production concept Product concept Selling concept Marketing concept Societal Marketing concept

TANGIBILIZING THE SERVICE PRODUCTS

Promotional material, employees` appearance, and the service firm`s physical environment all help tangibilize service.

DIVEST

Sell or liquidate the business

Variability

Service quality depends on who provides service and when and where they are provided. Services are produced and consumed simultaneously.

Perishability

Services cannot be stored.

FOUR NATURES OF HIGH-PERFORMANCE BUSINESS

Stakeholders Processes Resources Organization

PROGRAM FORMULATION

Supporting programs, such as running recruiting programs to attract the right employee

Hierarchical

The business unit should strive to arrange its objective hierarchically, from the most to the last important.

Differentiation

The firm cultivates strengths that will give it a competitive advantage in one or more benefits.

Focus

The firm gets to know the needs of these segments and pursues either cost leadership or a form of differentiation within the target segments.

FEEDBACK AND CONTROL

The firm needs to track results and monitor new developments in the environment.

MANAGING PERCEIVED RISK

The high risk that people perceive when purchasing hospitality products increases loyalty to companies that have provided them with a consistent product in the past.

Realistic

The levels should arise from an analysis of the business unit's opportunities and strengths, not from wishful thinking.

IMPLEMENTATION

To implement a strategy, the firm must have the required resources

Wants

Wants are how people communicate their needs

Cash cows

When a star's annual growth rate falls to less than 10%, it becomes cash cow. A cash cow produces a lot of cash for the company and enjoys economies of scale and higher profit margins.

Creating customer value and satisfaction

are at the heart of hospitality and travel industry marketing.

Uniforms and costumes

are common to the hospitality industry.

Inseparability

both the service provider and the customer must be present for the transaction to occur.

Intangibility

cannot be seen, tasted, felt, heard, or smelled before they are purchased.

Business level

carry that business unit into a profitable future.

Dogs

describe company businesses that have weak market shares in low-growth markets. They typically generate low profits or losses.

Product level

develops a marketing plan

MANAGING EMPLOYEES

employees are a critical part of the product and marketing mix.

Division level

establishes a division plan covering the allocation of funds

Relationship marketing

focuses on building a relationship with a company`s profitable customers.

Service culture

focuses on serving and satisfying the customer.

Marketing Concept

holds that achieving organizational goals depends on determining the needs and wants of target markets and delivering the desired satisfaction more effectively and efficiently than competitors.

Selling Concept

holds that consumers will not buy enough of the organizations products unless the organization undertakes a large selling and promotion effort.

Product concept

holds that customers prefer existing products and product forms, and the job of management is to develop good versions of these products.

Production Concept

holds that customers will favor products that are available and highly affordable, and therefore management should focus on production and distribution efficiency.

Societal Marketing concept

holds that the organization should determine the needs, wants, and interests of target markets and deliver the desired satisfaction more effectively and efficiently than competitors in a way that maintains or improves the consumers and society`s well-being.

Marketing management

is the analysis, planning, implementation, and control of programs designed to create, build, and maintain beneficial exchanges with target buyers for the purpose of achieveing organizational objectives.

Value

is the consumer`s estimate of the products overall capacity to satisfy his or her needs.

Trade dress

is the distinctive nature of a hospitality industry`s total visual image and overall appearance.

Threats

it is a challenge posed by unfavorable trends or developments that would lead, in the absence of defensive marketing action, to sales or profit deterioration.

Product

it is anything that can be offered to a market for attention, acquisition, use, or consumption and that might satisfy a need or want.

AIM OF STRATEGIC PLANNING

keeps the company healthy despite unexpected upsets

MANAGING CONSISTENCY

means that customers will receive the expected product without unwanted surprises.

Industry scope

range of industries

Products and application scope

range of products and applications

Physical surroundings

should be designed to reinforce the products position in the customers mind.

Satisfaction

with a product is determined by how well the product meets the customer`s expectation for that product.

EXTERNAL ENVIRONMENT ANALYSIS

• Macroenvironment forces • Microenvironment factors • Opportunities •Threats

Ansoff Product-Market Expansion Grid

• Market Penetration - more market share • Market development - new target market • Product development - create new product of potential interest to current market • Diversification - new product for new market

BOSTON CONSULTING GROUP MODEL/ GROWTH-SHARE MATRIX

• Question marks • Stars •Cash cows • Dogs

Customer is King

• Satisfying the customer is a priority, but we cannot satisfy everyone.

MAJOR APPROACH MARKET PENETRATION STRATEGY

•Encourage current customers to buy more • Attract competitors customers • Convince non-users to use the product

FOUR CHARACTERISTICS OF AN SBU'S OBJECTIVES:

•Hierarchical •Quantitative •Realistic •Consistent

MICHAEL PORTER'S THREE GENERIC TYPES OF STRATEGY:

•Overall cost leadership •Differentiation •Focus