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1. Define marketing and explain the six marketing fundamentals used in this book.

Marketing is a continuous, sequential process through which management in the hospitality and
tourism industry plans, researches, implements, controls, and evaluates activities designed to
satisfy both customers’ needs and wants and their own organization’s objectives. To be most
effective, marketing requires the efforts of everyone in an organization and can be made more or
less effective by the actions of complementary organizations.

The six marketing fundamentals used in this book are as follows:

a.   Satisfaction of customers’ needs and wants.
b.   Continuous nature of marketing.
c.   Sequential steps in marketing.
d.   Key role of marketing research.
e.   Interdependence of hospitality and travel organizations.
f.   Organization-wide and multidepartment effort.

2. Explain the price of marketing concept.

The PRICE of marketing represents the five tasks of marketing that all organizations must do to
be effective.

P     - Planning
R    - Research
I    - Implementation
C    - Control
E    - Evaluation

3. Compare and contrast the roles of marketing during four evolutionary eras and
   describe the digital marketing era.

a. Production-Orientation Era. The first evolutionary stage in the development of marketing
   among manufacturing and packaged-goods companies. This was the period when the
   concept of mass production began.
b. Sales-Orientation Era. This period ran from the beginning of the 1930s through the 1940s.
   The emphasis switched from production to outselling the competition.
c. Marketing-Orientation Era. This period started in the early 1950s, when manufacturing and
   packaged-goods companies began to realize that selling alone did not guarantee satisfied
   customers and more sales.
d. Societal-Marketing-Orientation Era. This is the fourth evolutionary era of marketing
   beginning in the 1970s, organizations started to recognize their social responsibility in
   addition to their profit and customer-satisfaction objectives.
The digital marketing era describes a period beginning in the early 1990s characterized by the
increasing use of digital technologies such as the Internet, databases, and CDs in marketing.

4. Describe the thirteen symptoms of a production and sales orientation.

a.   Planning is short term.
b.   Long-term decisions are only made when serious problems are encountered.
c.   There is a definite reluctance to change.
d.   Business growth is seen as being assured, and current business volumes are viewed as
e.   Organization believes the better-mousetrap fallacy.
f.   Little is known about the wants, needs, and desires of its customers, and little importance is
     placed on target market research.
g.   Promotions stress service or product features rather than the customer needs they will satisfy.
h.   Customers are given only what they ask for and what is normally provided - no more, no
i.   Decisions are made from a production or sales perspective, not with customers’ needs in
j.   The organization or department is seen as an island unto itself. Only when an emergency
     arises is cooperation recognized between departments.
k.   Departments or divisions within organizations have overlapping activities and
     responsibilities related to marketing, causing hidden conflicts between departments regarding
     these responsibilities.
l.   Department or division managers tend to be very defensive and protective of their domains.
m.   Organization follows the share-the-wealth syndrome.

5. Explain the marketing myopia concept.

A term coined in 1960 by Theodore Levitt to describe many of the thirteen symptoms of
production and sales orientations. Myopia means “shortsightedness or lack of discernment in
thinking or planning.” In other words, the inability or unwillingness to think, see, and plan
beyond the short term.

6. Describe the nine characteristics of a marketing orientation and its benefits.

a.   Customer needs are a first priority and understanding these needs is a constant concern.
b.   Marketing research is an ongoing activity assigned a very high priority.
c.   Customers’ perceptions of the organization are known.
d.   Frequent reviews are made of strengths and weaknesses relative to competitors.
e.   The value of long-term planning is fully appreciated. Building lasting relationships with
     individual customers, distribution channels and other industry partners – called relationship
     marketing – is much more important than making a one-time sale or deal.
f.   The scope of business or activities is broadly set and change is seen as inevitable.
g.   Interdepartmental cooperation is valued and encouraged.
h.   Cooperation with complementary organizations is recognized as worthwhile.
i.   Measurement and evaluation of marketing activities are done frequently.
The benefits of adopting a marketing orientation are as follows:

   a.   Changes in customer needs and characteristics are known.
   b.   Cooperation among an organization's departments increases.
   c.   Cooperation with complementary organizations increases.
   d.   Customers are more satisfied.
   e.   Departments, managers, and staff share a common goal.
   f.   Effective marketing programs are repeated or enhanced, ineffective ones are dropped.
   g.   Marketing expenditures and human resources are used most effectively.
   h.   More marketing opportunities are realized.
   i.   Services, products, and promotions match customer's image of the organization.
   j.   Strengths are accentuated and weaknesses addressed.
   k.   Viability of new services and products are identified.

7. Explain the seven core principles of marketing.

a. The Marketing Concept. Managers act on the belief that satisfying customers’ needs and
   wants is first priority.
b. Marketing Orientation. The manager or organization has accepted and acts according to the
   marketing concept.
c. Satisfying Customers’ Needs and Wants. Converting customers’ needs and wants into sales.
d. Market Segmentation. Marketing only to target markets.
e. Value and the Exchange Process. Receiving a good value (the ability to satisfy ones’ wants
   and needs) in exchange for a service and or experience. Value is not always associated with
   the price.
f. Product Life Cycle. Includes four predictable stages that all hospitality and travel services
   pass through (introduction, growth, maturity, decline).
g. Marketing Mix. Includes the traditional 4 Ps of marketing:


   and the additional 4 Ps of hospitality and travel marketing:


8. Describe the environment for marketing in the hospitality and travel industry.

The hospitality and travel environment consists of two sets of factors - marketing strategy factors
and marketing environment factors:
a. The marketing strategy factors represent the organization's marketing mix, which this book
   calls the 8 Ps of marketing.

b. The marketing environment factors are events completely beyond the direct control of the
   marketing manager. Sometimes called the external environment, the six marketing
   environment factors are as follows:

    Competition
    Legislation and regulation
    Economic environment
    Technology
    Societal and cultural environment
    Organizational objectives and resources

9. Explain the four reasons for the increasing importance of marketing in the industry.

a.   Greater competition
b.   Increased market fragmentation
c.   More experienced and sophisticated customers
d.   Acquisition of hospitality and travel companies by firms in other industries

1. Explain the meaning of services marketing.

A branch of marketing that applies specifically in the service industries in which there is
recognition of the uniqueness of all services.

2. Identify four reasons why marketing in the service industry has lagged behind
   marketing in other industries.

a.   Marketing terms and principles were defined for the manufacturing industry.
b.   Government regulation of certain parts of industry, e.g., airlines.
c.   The predominance of small businesses.
d.   The historical tendency for technically and operations-oriented people to create and manage
     hospitality and tourism organizations.

3. List and describe six generic differences between the marketing of services and the
   marketing of products.

The generic differences are unchangeable and affect the marketing of all services:

a.   Intangible nature of the services
b.   Production methods
c.   Perishability
d.   Distribution channels
e.   Cost determination
f.   Relationship of services to providers

4. List and describe six contextual differences between the marketing of services and the
   marketing of products.

The contextual differences are correctable, but have affected the marketing of services to date:

a.   Narrow definition of marketing
b.   Lack of appreciation for marketing skills
c.   Different organizational structures
d.   Lack of data on competitive performance
e.   Impact of government regulation and deregulation
f.   Constraints and opportunities for nonprofit marketers

5. List and explain eight specific differences affecting the marketing of hospitality and
   tourism services.

These are specific differences not found in other services that affect the marketing of hospitality
and travel services:
a.   Shorter exposure to services
b.   More emotional buying appeals
c.   Greater importance on managing evidence
d.   Greater emphasis on stature and imagery
e.   More variety and types of distribution channels
f.   More dependence on complementary organizations
g.   Easier copying of services
h.   More emphasis on off-peak promotion

6. Explain five unique approaches required in hospitality and tourism services.

Because hospitality and travel services are different from other services and products, these five
unique approaches to marketing must be followed:

a.   Use of more than 4 Ps
b.   Greater significance of word-of-mouth advertising
c.   More use of emotional appeals in promotions
d.   Greater difficulties with new-concept testing
e.   Increased importance of relationships with complementary organizations

7. Identify three unique relationships among hospitality and tourism organizations.

These three unique relationships among hospitality and travel organizations influence how
marketing is done in the industry:

a.   Industry sector interaction
    Suppliers
    Carriers
    Travel trade intermediaries
    Destination marketing organizations (DMOs)

b.   Destination mix element interaction
    Attractions and events
    Transportation
    Infrastructure
    Facilities
    Hospitality

c. Visitor-resident interaction
 Residents
 Visitors

1. Describe what a system is.

A system is a collection of interrelated parts working together to achieve common objectives.
The hospitality and travel industry consists of a group of interrelated organizations with a
common purpose and goals.

2. Explain the hospitality and travel marketing system.

The hospitality and travel marketing system is a five-step process involving finding the answers
to five sequential questions:

3. List the four fundamentals of the hospitality and travel marketing system.

a.   Strategic marketing planning
b.   Marketing orientation
c.   Differences between product and services marketing
d.   Understanding customer behavior

4.   List the three benefits of using the hospitality and travel marketing system.

a. Puts a priority on planning
b. Results in a logical flow of efforts
c. Produces a better balance of marketing activities

5. List and arrange, in order, the five key questions in the hospitality and travel
   marketing system that must be answered.

1.   Where are we now?
2.   Where would we like to be?
3.   How do we get there?
4.   How do we make sure we get there?
5.   How do we know if we got there?

6. Define long-term and short-term marketing planning.

Long-term marketing planning, also known as strategic planning, involves planning the
marketing effort for a period of three or more years into the future.

Short-term marketing planning, also known as tactical planning, involves planning the marketing
effort for a period of two or fewer years into the future.

7. Distinguish between a strategic market plan and a marketing plan.
A strategic market plan is a written, long-term marketing plan covering three or more years into
the future.

A marketing plan is a written, short-term (tactical) marketing plan, for a period of two or fewer
years into the future.

1. List and describe six personal factors that influence customer behavior.

Personal factors are the psychological characteristics of the individual person; they include the

a. Needs, wants, and motivation. A need exists when there is a gap between what customers
   have and what they would like to have. Wants are the customers’ desire for specific
   satisfiers of their needs. Motives are customers’ personal desires or drives to satisfy their

b. Perception is how the customer sizes up a product or service by the use of the five senses:
   sight, hearing, taste, touch, and smell.

c. Learning comes from the customer's experience through a combination of factors including
   needs, motives, objectives, cues, responses, and reinforcement.

d. Personality consists of two common factors that influence a customer’s personality, traits
   and types.

e. Lifestyles are the ways that customers live and are a function of attitudes, interests, and
   opinions (AIOs).

f. Self-concept is the customer's mental picture of himself or herself, consisting of four different
   elements: the way they really are (real self), the way they would like to be (ideal self), the
   way they think other people see them (reference-group self), and the way they see themselves

2. List and describe four factors that influence customers’ perceptions of hospitality and
   travel services.

a. Customers use perceptual screens or filters, also known as selective exposure, to screen out
   the majority of the stimuli to which they are exposed. Only small portions of information
   from messages are retained.

b. Customers twist information based on their perceptual biases to match their own pictures of
   the world.

c. Customers, through selective retention, hold on longer to information that supports their
   predispositions, beliefs, and attitudes.

d. Customers through the process of psychological closure, round out an image of information
   that is not fully explained or understandable.
3. List and explain the role of stimulus factors in perception.

Stimulus factors are related to the service itself and the way in which it is promoted. They can
also be expressed through supporting facilities by using words and pictures (advertisements and
promotions). The stimulus factors are size, color, intensity, movement, position, contrast,
isolations, texture, shape, and surroundings.

4. List and describe five interpersonal factors that influence customer behavior.

The interpersonal factors are the influence of other people on a customer's buying decisions.
They are also referred to as social information sources and include the following:

a. Cultures are a blend of the beliefs, values, attitudes, habits, traditions, customs, and forms of
   behavior that are shared by a group of people. Subcultures are cultures within a culture.

b. Reference groups consist of two broad types: primary and secondary. Each customer belongs
   to several reference groups with which they identify. They each adhere to certain codes of

c. Social classes are determined by occupation, sources of income and accumulated wealth,
   highest level of education achieved, place of residence, and family history.

d. Opinion leaders are people who are respected by customers and who act as channels of

e. The family unit is among the strongest interpersonal influences on customer behavior.

5. List and describe the five steps in customer buying processes.

a. Need awareness. The customer becomes aware of a need.
b. Information search. The customer actively searches for information on the product or
c. Evaluation of alternatives. The customer develops a short list of alternatives and assesses
   these alternatives.
d. Purchase. The customer buys the preferred product or service.
e. Postpurchase evaluation. The customer psychologically evaluates the purchased product or

6. Explain the three categories of decision processes that customers follow.

a. Customers make routine buying decisions frequently and with little effort.
b. Customers make more effort with limited buying decisions, going through all five buying
   process stages when making a purchase.
c. Customers making extensive buying decisions are purchasing products or services that are
   expensive and complex. There is a high perceived risk and, therefore, a great deal of thought
   and evaluation is needed before a final decision can be made.

1. Define the terms situation analysis, market analysis, and feasibility analysis.

a. A situation analysis is a study of the marketing strengths, weaknesses, opportunities, and
   threats of an existing business or other type of organization, also known as SWOT analysis.

b. A market analysis is a study of the potential demand for a new hospitality or travel business.

c. A feasibility analysis is a study of the potential demand and economic feasibility of a
   business or other type of organization, which includes a market analysis plus a few additional

2. Explain the relationship and differences between situation, market, and feasibility


They are related over time as one type of analysis builds upon the other. The first situation
analysis should be built upon a market or feasibility analysis. The second situation analysis is
founded on the findings from the first situation analysis.

A market analysis should be the basis for a strategic (long-term) market plan. The situation
analysis updates the initial market analysis. A strategic market plan is prepared with the new
information received from the preparation of a marketing (short-term) plan. The situation
analysis answers the question, “Where are we now?”


A market analysis has the same six steps as a situation analysis:

a.   Marketing environment analysis
b.   Market potential analysis
c.   Primary competitor analysis
d.   Location and community analysis
e.   Services analysis
f.   Marketing position and plan analysis

Market and feasibility analyses are usually prepared by outside experts who have no financial
interest in the new business, and therefore offer objective recommendations.
Feasibility analysis entails four additional steps:

a. Pricing analysis
b. Income and expense analysis
c. Development cost analysis
d. Analysis of return on investment and economic feasibility

3. Explain the five benefits of doing a situation analysis.

a. Focuses attention on strengths and weaknesses. Continually focuses attention on an
   organization’s strengths and weaknesses. Keeps the organization abreast of any changes or
   areas that may need additional work or revamping. This is similar to a getting a yearly
   physical check-up.

b. Assists with long-term planning. By reviewing recent trends in the marketing environment,
   the situation analysis makes sure that the long-term process remains current and on track.
   Once completed, it contributes to the strategic marketing plan.

c. Helps in the development of marketing plans. Marketing plans are built on the base of a
   completed situation analysis.

d. Puts a priority on marketing research. Marketing research is crucial and is used to
   investigate the strengths and weaknesses of competitors, and new marketing opportunities. It
   also tracks customer satisfaction levels and measures past marketing plans

e. Has spin-off benefits. There are by-products of the situation analysis. It provides an
   inventory, a status report on conditions, and a list of improvements needed.

4. List in order and describe the six major steps in a situation analysis.

a. Marketing environment analysis. Focuses on controllable and marketing environment
   factors. Controllables are factors over which complete control is possible. Marketing
   environment factors are beyond the total control of an individual organization.

b. Location and community analysis. Consists of a two-part process. Part one comes from the
   profile, which inventories community resources; part two is an assessment of community
   trends and their impact.

c. Primary competitor analysis. These are usually businesses in the local community with a
   large share of the target market identified in the market potential analysis.

d. Market potential analysis. A research study of the market potential or target markets, upon
   which the business is built. It considers both the organization’s past and potential customers.

e. Services analysis. A two-part process involving an inventory of facilities and services and a
   physical inspection of their condition.

f. Marketing position and plan analysis. The culmination of all the other analyses. Two key
   questions are considered: “What position do we occupy in the minds of past and potential
   customers”? and “How effective is our marketing?”
5. List in order and describe the six major steps in a market analysis.

a. Marketing environment analysis. The same format is used as in the situation analysis.

b. Market potential analysis. A forecast of primary competitors’ capacities and total market
   demand must be made. One method that is widely used is the pro rata or fair-share method.

c. Primary competitor analysis. The same format is used as in the situation analysis.

d. Location and community analysis. Location and site selection is an extremely important part
   of market analysis. Site accessibility and visibility are two major factors related to

e. Services analysis. The services that best satisfy customer needs are determined. Combining
   research findings and a knowledge of what actually works in the business accomplishes this
   most effectively.

f. Marketing position and plan analysis. “What position do we occupy in the minds of past and
   potential customers”? and “How effective is our marketing?”

6. List and describe the four additional steps in a feasibility analysis.

a. Pricing analysis. Determines the strengths and weaknesses of primary competitors
   (competitive organizations who market similar services to some or all of the subject
   organization’s target markets).

b. Income and expense analysis. Estimates the revenues, operating expenses, and profits for the
   new business. A pro-forma (projected) income statement is prepared that generally covers 5
   to 20 years.

c. Development cost analysis. A projection of the capital investment expected in a new
   hospitality or travel business. This forecast is also called a capital budget.

d. Analysis of return on investment and economic feasibility. The final step involves the
   calculation of the return on investment and, based on this, the economic feasibility of the new

1. Define marketing research.

Marketing research is the function of marketing that links the consumer, customer, and public to
the marketer through information. This information is used to (1) identify and define marketing
opportunities and problems; (2) generate, refine, and evaluate marketing actions; (3) monitor
marketing performance; and (4) improve understanding of marketing as a process (American
Marketing Association).

2. Describe the reasons for doing marketing research (the five Cs) and explain why
   marketing research is sometimes not done.

There are five major reasons for doing marketing research, which also can be remembered as the
5Cs of marketing research:

a. Customers. Helps an organization develop a detailed knowledge of its customers.
b. Competition. Identifies competitors and their strengths and weaknesses.
c. Confidence. Reduces the risk and increases the confidence when making marketing
d. Credibility. Increases the organization's credibility by demonstrating the effectiveness of
   marketing programs.
e. Change. Helps an organization keep updated with changes among travelers and with the
   hospitality and travel industry.

There are five reasons for not doing marketing research:

a. Timing. There is not enough time available to do the required research.
b. Cost. The costs of the research may outweigh the potential benefits.
c. Reliability. There is no reliable research method available.
d.     Competitive intelligence. The company may not want its closest competitors to know
       about what is doing or thinking of doing.
e.     Management decision. Management may decide to use intuition and judgment, rather
       than research data. Note that this is not a valid reason on its own for not doing marketing

3. Explain how research is used in each step of the hospitality and travel marketing

a. Where are we now? (Research for planning and analysis) Research is used in analyzing the
   marketing environment, location and community, primary competitors, past and potential
   customers, services, market position, and past marketing plans.
b. Where would we like to be? (Research for strategy selection) Research helps an organization
   to select target markets, marketing mixes, and positioning approaches.
c. How do we get there? (Research to guide marketing mix - 8Ps - decisions) Research assists
   with the development of marketing plans by assessing the potential effectiveness of specific
   promotional campaigns and other marketing mix activities.
d. How do we make sure we get there? (Research for monitoring the marketing plan) Research
   is used to check progress at specific times during the implementation of the marketing plan.
e. How do we know if we got there? (Evaluation research) Research assists in measuring the
   results of the marketing plan in terms of the extent to which marketing objectives were

4. List and describe the five key requirements for good research information.

a. Utility. Gather only information the organization can use (or must-know data).
b. Timeliness. Preplan to determine when the results are needed for decision-making and the
   time needed to complete the research to get these results.
c. Cost-effectiveness. Make sure the research is cost effective by relating the research cost to the
   expected value of investigating the opportunity or solving the problem.
d. Accuracy. Make sure the methods and calculations used to arrive at the data in both primary
   and secondary research are technically correct.
e. Reliability. Establish the same or similar results would be obtained if the same or similar
   research were done again.

5. List in order and explain the six steps in the marketing research process.

a. Formulate the research problem.
 Define research problem.
 Identify research objectives and related questions.

b. Design the research and select the data collection method.
 Collect and analyze secondary information.
 Select research design and primary data collection method.

c. Decide on the sample and collect the data.

d. Analyze and interpret the data.

e. Prepare the research report.
 Draw conclusions and make recommendations.

f. Communicate the research results.

6. Describe the internal and external sources of secondary research data.

There are two main sources of secondary research data - internal and external. Internal data
include registrations/reservations, sales mix/customer mix, databases, enquiries, and turnaways.
External data can be gathered from government agencies and other destination marketing
organizations, magazines, journals and newspapers, radio and television stations, trade and travel
associations, research companies and other private consulting organizations, and universities.

7. Explain the differences between primary and secondary research and list their
   respective advantages and disadvantages.

Primary research is data collected for the first time, by a method other than secondary research,
to answer specific questions. Secondary research is previously gathered information from
internal or external sources.

Advantages of primary research:

a. Applicable and usable
b. Accurate and reliable
c. Up-to-date

Disadvantages of primary research:

a. Expensive
b. Not available immediately
c. Not as readily accessible

Advantages of secondary research:

a. Inexpensive
b. Easily accessible
c. Immediately available

Disadvantages of secondary research:

a. Frequently outdated
b. Potentially unreliable
c. May not be applicable

8. List and describe the primary research methods and differentiate between quantitative
   and qualitative research.

Quantitative research provides numeric data that is more conclusive in nature. There are four
categories of primary research that can be used to produce quantitative research data:

a. Experimental research. In the hospitality and travel industry this usually involves tests of
   various kinds to determine the likely reactions of customers to new services or products (e.g.,
   through test marketing).

b. Observational research, mechanical. The use of mechanical or electronic devices, often to
   count the number of customers or customer vehicles.
c. Survey research. The use of structured questionnaires to gather information from customers
   or others on specific topics.

d. Simulation research. The use of computers to simulate marketing situations and to derive
   results through the application of mathematical or other models.

Qualitative research provides non-numerical data that is more exploratory in nature. There are
four categories of primary research that can be used to provide qualitative research data:

e. Focus groups. A method in which the researcher directs questions to a small group of people,
   usually eight to twelve.

f. Individual depth interviews. One-to-one and usually face-to-face interviews between the
   interviewer and a respondent.

g. Observational research, human. A method of collecting data by watching and noting the
   behaviors of customers or other people.

h. Case studies. Getting information from one or more situations that are similar to the
   organization's problem situation.

9. Explain the advantages and disadvantages of personal interviews and mail, telephone,
   in-house, self-administered, and online surveys.

Advantages of the five survey types:

Personal interviews:
a. High response rate
b. High degree of flexibility

Mail surveys:
a. Relatively inexpensive if the response rate is high
b. No interviewer bias
c. Consistency in the questions and responses
d. Can survey a large number of respondents
e. Can reach every respondent by mail
f. Respondents can remain anonymous
g. Respondents can choose the most convenient time to answer questions

Telephone surveys:
a. More flexible than mail surveys
b. Information can be gathered quickly and inexpensively
c. High response rates with good contact lists and trained telephone interviewers

In-house, self-administered surveys:
a. Are completed by customers within the premises of a hospitality and travel organization
b. Convenient

Online surveys:
a. Relative speed and flexibility
b. Large and growing audience

Disadvantages of the five survey methods:

Personal interviews:
a. Are relatively expensive
b. Can have interviewer bias in questioning
c. Respondents may be reluctant to answer personal questions
d. Respondents may not answer in a relaxed way
e. The time of the interview may inconvenience the respondent

Mail surveys:
a. Impersonal nature
b. Relatively low response rate

Telephone surveys:
a. Obtrusive nature, invasion of privacy
b. Expensive when long-distance calls are made

In-house, self-administered surveys:
a. Generate low response rate

Online surveys:
a. Technical skills and time required developing questionnaires

10. Explain the focus group approach and how it can be used in making effective
    marketing decisions.

The focus group approach is a method in which the researcher directs questions to a small group
of people, usually between eight and twelve. To focus means the group’s attention is drawn to a
specific subject or set of questions and they are invited to engage in open discussion. The real
strength of focus groups is that they can provide an in-depth understanding of customers’
opinions, attitudes, perceptions, and behavior. Versatility aside, focus groups provide only
qualitative information.

Focus groups can be helpful in making effective marketing decisions if they are used in a
supportive role to quantitative primary research methods. For example, focus groups might be
beneficial before or after conducting a survey.

1. Define market segmentation.

Market segmentation is the division of the overall market for a service into groups of customers
with common characteristics.

2. Explain the importance of segmentation to effective marketing.

Market segmentation is important because it allows the organization to focus effort and
marketing dollars in the most effective way, while asking these questions to obtain specific target

a.   Who? Which market segments should we pursue?
b.   What? What are they looking for in our types of services?
c.   How? How do we develop our marketing programs to best fit their needs and wants?
d.   Where? Where do we promote our services?
e.   When? When do we promote them?

3. Explain the benefits and limitations of market segmentation.

The benefits of market segmentation include the following:

a.   More effective use of marketing dollars.
b.   Clearer understanding of the needs and wants of selected customer groups.
c.   More effective positioning.
d.   Greater precision in selecting promotional vehicles and techniques.

The limitations of market segmentation include the following:

a.   More expensive than using a non-segmented approach.
b.   Difficult to select the best base for segmenting a market.
c.   Difficult to know how finely or broadly to segment.
d.   Tendency to appeal to segments that are not viable.

4. List the eight criteria for effective segmentation.

a.   Measurable
b.   Substantial
c.   Accessible
d.   Defensible
e.   Durable
f.   Competitive
g.   Homogeneous
h.   Compatible
5. List the bases for segmenting hospitality and travel markets.

a.   Geography
b.   Demographics
c.   Purpose of trip
d.   Psychographics
e.   Behavior
f.   Product-related
g.   Channels of distribution

6. Describe the major demand and supply influencing today’s hospitality and travel

The demand-led trends include the following:

a.   Changing age structure
b.   Changing household structures
c.   Changing household roles and responsibilities
d.   Increasing importance of minorities
e.   Changing social/cultural patterns and lifestyles
f.   Increased demand for specific travel alternatives

The supply-side trends include the following:

a.   Increased emphasis on frequent travelers
b.   Greater attention to nutritional and fitness needs
c.   More marketing to executive and luxury travelers
d.   Greater emphasis on weekend packages and other mini-vacations
e.   More attention to women business travelers
f.   Greater emphasis on longer-stay travelers
g.   More pricing and rate alternatives
h.   Greater convenience in services provided
i.   Greater variety of ethnic food offerings
j.    Increased supply of specific travel offerings

7. Describe the recent trends in the segmentation practices of the hospitality and travel

a. Increased customer base tracking with aid of computer systems
b. Increased usage of marketing research, including techniques that pave the way for
   psychographic/lifestyle, benefit, and brand-loyalty segmentation
c. Creating non-smoking environments in restaurants and hotels, and on airlines and cruise

1. Identify the six components in developing a marketing strategy and plan.

a.   Market segmentation analysis
b.   Marketing strategy formulation
c.   Positioning approach
d.   Marketing objectives
e.   Marketing mix (8 Ps)
f.   Marketing plan

2. Define the terms marketing strategy, positioning, and marketing objective.

Marketing strategy. The combination of target markets and marketing mixes.

Positioning. The development of a service and marketing mix to occupy a specific place in the
minds of customers within target markets, also known as having distinctive service features.

Marketing objective. A measurable goal that a hospitality and travel organization attempts to
achieve for a target market within a specific time period, typically one to two years.

3. Explain the concept of segmented marketing strategies and describe the alternative
   strategies by market focus.

Segmented strategies, also known as differentiated marketing strategies, are approaches that
recognize differences among target markets by using individualized marketing mixes.

There are four alternative strategies available by market focus. Three of these are segmented
marketing strategies: (1) single target market, (2) concentrated, and (3) full coverage. The fourth
is an undifferentiated marketing strategy in which segment differences are recognized but
ignored in marketing.

4. Describe the alternative strategies for the product life cycle (PLC) stages.

The effectiveness of different marketing approaches varies with product life-cycle stage.
Marketing strategies need to be adapted to meet the new challenges of each stage.

Stage 1: Introduction

a.   Rapid-skimming strategy. High price with high promotion
b.   Slow-skimming strategy. High price with low promotion
c.   Rapid-penetration strategy. Low price with high promotion
d.   Slow-penetration strategy. Low price with low promotion

Stage 2: Growth
a.      Improve service quality and add new service features and elements
b.      Pursue new target markets
c.      Use new channels of distribution
d.      Lower prices to attract more price-sensitive customers
e.      Shift advertising emphasis from building awareness to creating desire and action

Stage 3: Maturity

a. Market-modification strategy. Pursue competitors' customers, add new target markets, or try
   to convert non-users to users.
b. Product-modification strategy. Rejuvenate services or products to appear new.
c. Marketing-mix modification strategy. Change the marketing mix.

Stage 4: Decline

a. Reduce costs and milk the company.
b. Sell out.

5. Describe the alternative strategies by industry position.

Market leaders

a. Expand the size of the total market
b. Protect market share
c. Expand market share


a.   Frontal challenge on market leader
b.   Flank
c.   Encirclement
d.   Bypass
e.   Guerrilla

Market followers

a. Stay away from direct or indirect attacks on market leaders
b. Try to copy all or some of what the market leader does

Market nichers

a. Avoid direct confrontations with larger organizations
b. Find a niche market and specialize in that market

6. Explain the concepts of relationship marketing and strategic alliances.
Relationship marketing is a marketing concept that emphasizes the importance of building long-
term relationships with individual customers and with other organizations in the distribution

Strategic alliances are a form of relationship marketing; they are special long-term relationships
formed between two or more hospitality and travel organizations, or between a hospitality and
travel organization and one or more other types of organizations.

7. Identify the reasons that have made positioning essential in today’s business climate.

a. Perceptual processes
b. Intensified competition
c. Volume of commercial messages

8. List and describe the steps required for effective positioning (the five Ds).

a.   Documenting
b.   Deciding
c.   Differentiating
d.   Designing
e.   Delivering

9. Describe the six different approaches to positioning.

a.   Positioning on specific product features
b.   Positioning on benefits, problem solution, or needs
c.   Positioning for specific usage occasions
d.   Positioning for user category
e.   Positioning against another product
f.   Positioning by product class dissociation

10. Explain the five benefits of having marketing objectives and list the four requirements
    for good marketing objectives.

a. Giving marketing managers a way to measure progress toward their goals and make timely
   adjustments to their programs
b. Providing a yardstick for management to measure the success of marketing programs
c. Representing a benchmark for judging the potential return on alternative marketing-mix
d. Providing a frame of reference for all those directly involved in marketing
e. Giving broad directions for the scope and types of marketing activities required in a specific

The four requirements for good marketing objectives is that they be
a.   Target-market specific
b.   Results-oriented
c.   Quantitative
d.   Time specific

1. Define the term marketing plan.

A marketing plan is a written plan used to guide an organization's marketing activities for a
period of two years or less.

2. Explain the difference between tactical and strategic marketing planning.

Tactical planning is more short term and covers a period of up to two years. Strategic planning
is more long term and covers a period of three or more years into the future.

3. List eight requirements for an effective marketing plan.

a.   Fact-based
b.   Organized and coordinated
c.   Programmed
d.   Budgeted
e.   Flexible
f.   Controllable
g.   Internally consistent and interrelated
h.   Clear and simple

4. Explain the five benefits of having a marketing plan.

The five benefits of having a marketing plan are:

a.   Activities matched with target markets
b.   Consistency of objectives and target-market priorities
c.   Common terms of reference
d.   Assistance in measuring marketing success
e.   Continuity in long-term planning

5. Describe the three main parts of a marketing plan.

a. Executive summary
b. Marketing plan rationale
c. Implementation plan

6. List four approaches to developing marketing budgets and recommend one of these

a.   Historical or arbitrary budgeting
b.   Rule-of-thumb budgeting
c.   Competitive budgeting
d.   Objective-and-task budgeting
The recommended approach is the objective-and-task, which is a zero-based or bottom-up way to
develop a marketing budget.

7. Describe the three major steps involved in preparing a marketing plan.

In chronological order:

a. Prepare the marketing plan rationale
b. Develop a detailed implementation plan
c. Write the executive summary

8. List and describe the 8 Ps of hospitality and travel marketing.

a.   Product.
b.   Partnership.
c.   People.
d.   Packaging
e.   Programming
f.   Place.
g.   Promotion.
h.   Pricing.

9. Identify the four major groups of organizations in the hospitality and travel industry.

a.   Suppliers
b.   Carriers
c.   Travel trade intermediaries
d.   Destination marketing organizations

10. Describe the roles played by each of these four groups of hospitality and travel

a. Suppliers provide the services that travel trade intermediaries wholesale (or package) or
   retail, and that customers also buy directly. These services are located within or between
   travel destinations. The suppliers include attractions, car rentals, casinos, cruise lines,
   lodging, restaurant, and foodservice facilities.

b. Carriers provide transportation from the customer's origin to their destination. They include
   airlines and train, bus, and ferry companies.

c. Travel trade intermediaries package (wholesale) and retail the services of suppliers, carriers,
   and destinations to travelers. They include retail travel agents, tour wholesalers and
   operators, corporate travel departments, incentive travel planners, and convention/meeting

d. Destination marketing organizations (DMOs) are responsible for promoting specific
   destinations to group and individual travelers. They represent countries, regions,
   states/provinces/territories, areas, counties, and cities.

11. Identify the trends among each of the four groups of organizations

a. Suppliers:

 Chain domination
 Increasing brand segmentation
 Mergers and joint-marketing programs
 All-suite hotels
 Frequent-guest programs
 Special services and amenities

Restaurant and foodservice
 Major restaurant industry trends
 Restaurant franchising
 Co-branding
 New foodservice locations
   Increasing brand segmentation
   Changing ownership of major chains

Cruise lines
 Rapid growth in cruising and cruise ship capacity
 Creativity in expansion of target marketing
 Dependence on travel agents
 Changing cruiser demographics
 Entry of hotel/resort companies into the cruise business
 Consolidation
 Internet service

Car rental
 Sales concentrated in industry leaders
 Dependence on airlines and travel agents
 Participation in frequent-traveler programs
 New services

Attractions and events
 Theme park business growth
 Mixed-use projects

 Growth in number of casino operations
 Casinos take to the water
 Casino resort diversification

b. Carriers:

 Mergers and industry concentration
 More regional and commuter airlines
 Frequent-flier programs
 Strategic alliances
 Ticketless travel and e-ticketing
 Changes in travel agency commission policies

 Addition of larger and more modern vessels
 Greater involvement in cruising

 Greater use of high-speed trains
 More privatization of passenger railway systems
c. Travel trade intermediaries:

    Retail travel agents
    Tour wholesalers and operators.
    Corporate travel departments.
    Incentive travel planners.
    Convention/meeting planners.

d. Destination marketing organizations:

Federal and state tourism marketing agencies
Convention and visitors bureaus
 Increased funding of many agencies
 Growing reliance on Internet marketing

12. Identify five overall trends and industry realities.

a.   More horizontal integration
b.   More vertical integration
c.   Introduction of a wide variety of new services, facilities, and travel alternatives
d.   Great future opportunities for new services, facilities, and travel alternatives
e.   Increasingly competitive industry

13. Define the product/service mix.

The product/service mix is the organization's assortment of services and products that are
provided to customers.

14. Identify and describe the six components of an organization's product/service mix.

a. Staff behavior, appearance, and uniforms. This includes the behavior of staff, especially in
   the presence of customers. The appearance of staff, including their uniforms and grooming,
   is also part of this component.
b. Building exteriors. The appearance of the exteriors of all the buildings that an organization
   owns, including the landscaping and parking areas if appropriate.
c. Equipment. The appearance and state of maintenance of all the equipment that an
   organization or its customers use.
d. Furniture and fixtures. All the furniture and fixtures within or outside an organization's
e. Signage. Billboards, directional signs, exterior building signs, and all other signs owned
   and/or leased by an organization.
f. Communications with customers and other publics. All of the advertisements, promotions,
   and supporting materials used by an organization to communicate with its customers. This
   includes the organization's Web site.

15. Explain the types of product development decisions that an organization must make.
a. Organization-wide decisions:
 Width and length of product/service mix. Width is the number of different services provided
   by an organization. Length is the number of similar services provided by an organization.
 Improving or modernizing the product/service mix. Upgrading of facilities and/or equipment
   to keep them up to date.
 Branding. Adding similar products or services but under a different brand name

b. Individual facility/service decisions:
 Decisions to modify the quality, range, or design of facilities and/or equipment at an
   individual property or unit level.

16. Define the term partnership and list the potential benefits of marketing partnerships to
    hospitality and travel organizations.

Partnerships are cooperative promotions and other cooperative marketing efforts by hospitality
and travel organizations.

The benefits of marketing partnerships include the following:

a.   Access to new markets
b.   Expansion of product/service mix
c.   Increased ability to serve customer needs
d.   Increased marketing budgets
e.   Sharing of facilities and facility costs
f.   Enhanced image of positioning
g.   Access to partners' customer databases
h.   Access to partners' expertise

17. Identify the types of potential partners available to hospitality and travel organizations.

a.   Customers
b.   Organizations in the same business
c.   Organizations in related businesses
d.   Organizations in non-related businesses
e.   Digital alliances

1. Identify the two main groups of people involved in hospitality and travel marketing and
   explain how they interact.

a. The guests (customers).
b. The hosts (those who work within hospitality and travel organizations).

2. Explain the key role played by people in the marketing mix.

The interactions of people (hosts and guests) can alone make or break the guests' experiences.

There are two distinct aspects to this role:

    The front-line people who provide the services of our industry play a key role. They can
     enhance or spoil a guest’s experience. Managing the guest-host relationship is a key function
     within the hospitality and travel industry.
    The interaction of guests with guests must also be managed, since these encounters can affect
     guests' experiences either positively or negatively.

3. Describe the Total Quality Management (TQM) concept, including its key principles.

TQM is a process designed to cut down on an organization’s defects, to determine its customer
requirements, and to satisfy those requirements.

The five key principles of TQM are as follows:

a.   Commitment to quality
b.   Focus on customer satisfaction
c.   Assessment of organizational culture
d.   Empowerment of employees and teams
e.   Measurement of quality efforts.

4. Identify the benefits of customer codes and guarantees.

a. They communicate to guests what to expect in the service delivery.
b. They give the organization's employees a clear idea of what is expected of them in serving
c. They may also articulate what the organization will do for the guest if the service delivery is
   not satisfactory.

5. Explain the importance of employee selection, orientation, training, and motivation
   programs in delivering service quality.

Staff selection, orientation, and training:
a. Strong interpersonal skills
b. Behavioral flexibility
c. Empathy

Also of great importance is that the service employees have superior customer-contact skills,
which are a blend of courtesy, communication, response to guest needs, good judgment, and

Motivating and retaining staff:

a. Maintaining regular communications with employees
b. Complimenting or rewarding employees frequently
c. Setting clear objectives and performance standards for employees
d. Making sure that there are advancement opportunities
e. Using management and supervisory staff who are honest, open, and willing to listen to
f. Giving service employees an accurate description of what the typical customer expects from
   the services that the organization provides

6. Describe the concept of empowering employees and explain how important this is to
   customer satisfaction.

Empowerment is giving employees the authority to identify and solve guest problems or
complaints on the spot, and to make improvements in work processes when necessary. By
empowering employees, management must have greater levels of trust in their subordinates and
must respect their judgment.

This has an important influence on customer satisfaction, since satisfaction will increase if
service problems are dealt with promptly and appropriately.

7. Explain the five dimensions of SERVQUAL model and how this technique is used to
   measure service quality.

a. Tangibles. The hospitality and travel organization's physical facilities, equipment, and
   appearance of staff.
b. Reliability. The hospitality and travel organization's ability to perform the service
   dependably and accurately.
c. Responsiveness. The willingness of staff to help customers and provide prompt service.
d. Assurance. The knowledge and courtesy of staff and their ability to convey trust and
e. Empathy. The degree of caring, individualized attention that the hospitality and travel
   organization's staff provides to its customers.
SERVQUAL measures the differences between the customers' expectations on the five
dimensions of service quality and their perceptions of the service quality that they actually

8. Explain why the relationship marketing concept is so important in the hospitality and
   travel industry and how it is done successfully.

Relationship marketing is a concept that emphasizes the importance of building long-term
relationships with individual customers and with other organizations in the distribution chain.

Successful relationship marketing results can be achieved by implementing the following

a.   Managing service encounters
b.   Providing customer incentives
c.   Providing special service options
d.   Developing pricing strategies to encourage long-term use
e.   Maintaining a customer database
f.   Communicating with customers through direct or specialized media

Relationship marketing is important in the hospitality and travel industry since it encourages
guests to be more loyal to organizations. This increases the guests' lifetime value (LTV) to the

9. Describe the customer mix and explain why organizations must manage it.

The customer mix is the combination of customers that use or are attracted to a specific
hospitality and travel organization.

Organizations must manage the customer mix for the following reasons:

a. The types of customers who use an organization influence its image among present and
   potential customers.
b. Certain types of customers may attract other similar customers.
c. The actions and behaviors of individual customers influence other customers' quality of
   service experiences, either positively or negatively.

1. Define the terms packaging and programming.

Packaging. The combining of related and complementary services into a single-price offering.

Programming. A technique closely related to packaging, involving the development of special
activities, events, or programs created to increase customer spending, or to give added appeal to
a package or other hospitality/travel services.

2. Explain the relationship between packaging and programming.

Packaging and programming are related. Packaging does not have to incorporate programming.
Programming often occurs within packages, but it can also be done on its own.

3. List the reasons for the increased popularity of packages and programs in the
   hospitality and travel industry.

Customer-Related Reasons
a. Greater convenience
b. Greater economy
c. Ability to budget for trips
d. Implicit assurance of consistent quality
e. Satisfaction of special interests
f. Added dimension to traveling and dining out

Participant-Related Reasons
a. Increased business in off-peak periods
b. Enhanced appeal to specific target markets
c. Attraction of new target markets
d. Easier business forecasting and improved efficiency
e. Use of complementary facilities, attractions, and events
f. Flexibility to capitalize on new market trends
g. Stimulation of repeat and more frequent usage
h. Increased per capita spending and lengths of stay
i. Public relations and publicity value of unique packages
j. Increased customer satisfaction

4. Explain the five key roles of packaging and programming in marketing hospitality and
   travel services.

a.   Smoothing patterns of business
b.   Improving profitability
c.   Assisting in use of segmented marketing strategies
d.   Complementing other product/service-mix elements
e.   Bringing together related hospitality and travel organizations
5. Explain the difference between packages developed by intermediaries and packages
   developed by others.

Packages developed by intermediaries are developed and marketed by travel trade intermediaries
including tour wholesalers and operators, incentive travel planners, some travel agents, and
convention/meeting planners.

Packages developed by others are developed and marketed by suppliers, carriers, destination
marketing organizations, various clubs, and special-interest groups.

6. List and explain four ways of classifying packages.

Package Elements
a. All-inclusive packages
b. Escorted tours
c. Fly-drive packages.
d. Fly-cruise packages
e. Fly-rail packages
f. Rail-drive packages
g. Accommodation and meal packages
h. Event packages
i. Packages with programming for special interests
j. Local attraction or entertainment packages

Target Market
a. Incentive packages or tours
b. Convention/meeting packages
c. Affinity group packages or tours
d. Family vacation packages
e. Packages for special-interest groups

Package Duration or Timing
a. Duration, e.g., weekend or short-break packages
b. Timing, e.g., holiday packages

Travel Arrangements or Destinations
a. Travel arrangements, e.g., FIT, GIT, charter tour
b. Destinations, e.g., Hawaii, Europe, Australia

7. Describe the steps that should be followed in developing effective packages.

a.   Include attractions or demand-generators
b.   Provide value to the customer
c.   Offer consistent quality and compatibility among elements
d.   Be well planned and coordinated
e. Provide a distinctive customer benefit
f. Cover all the details
g. Generate a profit

8. Describe the procedures used to price packages.

a.   Identify and quantify fixed costs
b.   Identify and quantify variable costs
c.   Calculate total package costs per person
d.   Add a markup for profit
e.   Calculate the single supplement
f.   Calculate the break-even point

1. Define the terms distribution mix and travel trade.

Distribution Mix. The combination of the direct and indirect distribution channels that a
hospitality and travel organization uses to make customers aware of its services, and to reserve
and deliver them.

Travel Trade. A term used in the hospitality and travel industry to describe all travel

2. Explain why the distribution mixes in the hospitality and travel industry are different
   from those in other industries.

Our industry’s distribution system is largely invisible because the products/services that are
being sold to the public are intangible. The intermediaries within our industry supply the public
with their knowledge and expertise in order to make their travel experience more enjoyable and

3. List the major travel trade intermediaries.

a.   Retail travel agents
b.   Tour wholesalers and operators
c.   Corporate travel managers and agencies
d.   Incentive travel planners
e.   Convention/meeting planners

4. Explain the roles played by each of the major travel trade intermediaries.

a. Retail travel agents. A person or organization who sells and reserves the services of
   suppliers, carriers, other travel trade intermediaries, and destination marketing organizations
   to individual and group customers, and receives commissions for these efforts.

b. Tour wholesalers and operators. A company or individual who plans, prepares, markets, and
   administers travel packages, usually combining the services of several suppliers and carriers.
   This service is normally not sold directly to the public, but through retail travel agents.

c. Corporate travel managers and agencies. Individuals employed by corporations,
   associations, government agencies, and other types of organizations to coordinate the
   organization’s travel arrangements. Some are known as outplants, who specialize either
   partly or wholly in handling corporate or government accounts.

d. Incentive travel planners. Specialized tour wholesalers who deal directly with their corporate
   clients. They assemble tailor-made packages that include transportation, accommodations,
   meals, special functions, theme parties, and tours.
e. Convention/meeting planners. Individuals who plan and coordinate their organizations’
   external meeting events. They work for associations, corporations, large non-profit
   organizations, government agencies, and educational institutions.

5. Identify the major online travel services and the customer benefits of using them.

          a. They include AOL Travel Channel, Expedia, Priceline, Travelocity, and Yahoo!
          b. The customer benefits of using online travel services include the following:

      Ability to self-book travel online
      Assistance in planning travel trips
      Availability of online pricing comparisons for hospitality and travel services
      Convenience of accessing travel information at home or work
      Immediate confirmation of travel bookings
      Instant access to travel information
      Potential of securing lower prices on hospitality and travel services

6. List the steps involved in marketing to the travel trade.

a. Research and select trade segments.
b. Decide on positioning approach and marketing objectives.
c. Establish a promotional mix for travel intermediaries.

1. Define the term promotional mix.

The promotional mix is the combination of advertising, personal selling, sales promotion,
merchandising, and public relations and publicity approaches used for a specific period of time.

2. List the five elements of the promotional mix.

a.   Advertising
b.   Personal selling
c.   Sales promotion
d.   Merchandising
e.   Public relations and publicity

3. List and explain the nine elements of the communications process.

a. Source. The person or organization that transmits the information to customers.

b. Encoding. Arranging a message into words, pictures, colors, sounds, movements, or even
   body language.

c. Message. What the source wants to communicate and hopes that the receivers understand.

d. Medium. The communications channel that the source selects to pass the message to

e. Decoding. How the receiver interprets a message received from the source.

f. Noise. Factors that distract the receiver's attention from the message being communicated by
   the source.

g. Receiver. The person who notices or hears the source's message.

h. Response. The action that the receiver takes after noticing or hearing the source's message.

i. Feedback. The response message that the receiver transmits back to the source.

4. Explain the difference between explicit and implicit communications.

Explicit communications are definite messages that are given to customers through the use of
language, either oral (e.g., television, radio, telephone, or personal sales) or written (e.g.,
Internet, ad copy, sales proposals).

Implicit communications are cues or messages through body language and other nonverbal
means (e.g., prices, rates, or fares).
5. List the three principal goals of promotion.

a. Inform
b. Persuade
c. Remind

6. Explain the relationship of the promotional mix and the marketing mix.

The promotional mix is one of eight elements of the marketing mix. It represents one of the 8 Ps
- promotion.

7. Define the terms advertising, personal selling, sales promotion, merchandising, public
   relations, and publicity.

a. Advertising. Paid, non-personal communication through various media by business firms,
   nonprofit organizations, and individuals who are in some way identified in the advertising
   message and who hope to inform and/or persuade members of a particular audience.

b. Personal selling. Oral conversations, either by telephone or face-to-face, between
   salespersons and prospective customers.

c. Sales promotion. Approaches other than advertising, personal selling, and public relations
   and publicity where customers are given a short-term inducement to purchase.

d. Merchandising. Materials used in-house to stimulate sales.

e. Public relations. All the activities that an organization engages in to maintain or improve its
   relationships with other organizations or individuals.

f. Publicity. A public relations technique that involves non-paid communication of information
   about an organization's services.

8. List the advantages and disadvantages of each of the five promotional mix elements.



a.   Low cost per contact
b.   Ability to reach customers where salespersons cannot
c.   Great scope for creative versatility and dramatization
d.   Ability to create images that salespersons cannot
e.   Non-threatening nature of non-personal presentation
f.   Potential to repeat message several times
g.   Prestige and impressiveness of mass-media advertising
Personal selling

a.   Ability to close sales
b.   Ability to hold the customer's attention
c.   Immediate feedback and two-way communications
d.   Presentations tailored to individual needs
e.   Ability to target customers precisely
f.   Ability to cultivate relationships
g.   Ability to get immediate action

Sales promotion

a.   Ability to provide quick feedback
b.   Ability to add excitement to a service or product
c.   Additional ways to communicate with customers
d.   Flexible timing
e.   Efficiency


a.   Ability to provide quick feedback
b.   Ability to add excitement to a service or product
c.   Additional ways to communicate with customers
d.   Flexible timing
e.   Stimulation of impulse purchases and higher per capita spending

Public relations and publicity

a.   Low cost
b.   Effective because they are not seen as commercial messages
c.   Credibility and implied endorsements
d.   Prestige and impressiveness of mass-media coverage
e.   Added excitement and dramatization
f.   Maintenance of a public presence



a.   Inability to close sales
b.   Advertising clutter
c.   Customer's ability to ignore advertising messages
d.   Difficulty getting immediate response or action
e.   Inability to get quick feedback and to adjust message
f.   Difficulty measuring advertising effectiveness
g. Relatively high waste factor

Personal selling

a. High cost per contact
b. Inability to reach some customers as effectively

Sales promotion

a.   Short-term benefits
b.   Ineffective in building long-term loyalty for company or brand
c.   Inability to be used on its own in the long term without other promotional mix elements
d.   Often misused


a. Does not necessarily give the customer a financial incentive
b. Ineffective in building long-term loyalty for company or brand
c. Contributes to visual clutter

Public relations and publicity

a. Difficult to arrange consistently
b. Lack of control

9. Identify four factors that affect the promotional mix.

a.   Target markets
b.   Marketing objectives
c.   Competition and promotional practices
d.   Promotional budget available

1. Describe the ten steps involved in planning the advertising effort.

a.   Set advertising objectives
b.   Decide on in-house advertising or an agency
c.   Establish a tentative advertising budget
d.   Consider cooperative advertising
e.   Decide on advertising message strategy
f.   Select advertising media
g.   Decide on timing of advertisements
h.   Pretest advertisements
i.   Prepare final advertising plan and budget
j.   Measure and evaluate marketing success

2. List the three main categories into which advertising objectives can be divided.

a. Informative advertising
b. Persuasive advertising
c. Reminder advertising

3. Explain the difference between consumer and trade advertising.

Consumer advertising is aimed at the customers who will actually use the services being
promoted. Trade advertising targets the travel intermediaries who influence customers' buying
decisions, including retail travel agents, tour wholesalers/operators, corporate travel
managers/agencies, incentive travel planners, and convention/meeting planners.

4. Explain the three components of advertising message strategy and list the alternative
   creative formats.

The three components of message strategy are the following:

a. Message idea. The main theme, appeal, or benefit to be communicated in an advertisement.
b. Copy platform. A statement that fully describes the message idea.
c. Message format. A broad creative approach used to communicate the message idea to the
   target audiences.

The alternative creative formats used in advertising are the following:

a.   Testimonial
b.   Slice of life
c.   Analogy, association, and symbolism
d.   Trick photography or exaggerated situations
e.   Word plays and made-up phrases
f.   HonestTwist
g. Fear
h. Comparisons

5. Explain the seven factors considered when selecting advertising media.

a.   Target markets and their reading, viewing, and listening habits
b.   Positioning approach, promotional goals, and advertising objectives
c.   Media evaluation criteria
d.   Relative strengths and weaknesses of each media alternative
e.   Creative requirements
f.   Competitive media placements
g.   Approximate total advertising budget

6. List the advertising media alternatives.

a.   Newspapers
b.   Magazines
c.   Radio
d.   Television
e.   Outdoor
f.   Direct mail
g.   Interactive media

7. Describe the advantages and disadvantages of various advertising media alternatives.

Newspapers - Advantages:

a.   High reach
b.   High geographic concentration
c.   Good frequency
d.   Tangibility
e.   Short lead times
f.   Relatively low cost
g.   Ability to communicate detailed information
h.   Ability to place in most appropriate location
i.   Ability to schedule to exploit day-of-week factors

Newspapers - Disadvantages:

a.   High waste factor and inability to target
b.   Limitations on creative format
c.   Relatively poor reproduction quality
d.   Clutter
e.   Short life span
f.   High cost of national coverage
Magazines - Advantages:

a.   Tangibility
b.   High audience selectivity
c.   Good reproduction quality
d.   Long life span and good pass-along rate
e.   Prestige and credibility
f.   Ability to communicate detailed information

Magazines - Disadvantages:

a.   Limitations on creative format
b.   Clutter
c.   Low reach
d.   Low frequency
e.   Long lead times
f.   Relatively expensive
g.   Difficulties in geographic targeting
h.   Inability to schedule to exploit day-of-week factors

Radio - Advantages:

a.   Relatively low cost
b.   Audience selectivity
c.   High frequency
d.   Short lead times
e.   Ability to schedule to exploit day-of-week and time-of-day factors

Radio - Disadvantages:

a.   No visual communications
b.   Inability to transmit complex messages or detailed information
c.   Short life span
d.   Clutter
e.   Shared attention

Television - Advantages:

a.   Potentially high reach
b.   High persuasive impact
c.   Uniform national coverage
d.   Ability to schedule to exploit day-of-week and time-of-day factors
e.   Some geographic and demographic selectivity

Television - Disadvantages:
a.   High total cost
b.   Short life span
c.   Inability to transmit detailed information
d.   Clutter
e.   Relatively high waste factor

Outdoor - Advantages

a.   High reach and good frequency
b.   Geographic selectivity
c.   Relatively uncluttered
d.   Long life span
e.   Large size

Outdoor - Disadvantages

a.   High waste factor and inability to target
b.   Relatively long lead times
c.   Inability to transmit complex messages or detailed information
d.   Not prestigious
e.   Limitations on creative format
f.   Inability to schedule to exploit day-of-week or time-of-day factors

Direct Mail - Advantages

a.   Audience selectivity
b.   Highly flexible
c.   Relatively uncluttered
d.   High level of personalization
e.   Ability to measure response
f.   Tangibility
g.   Low minimum cost
h.   Short lead times

Direct Mail - Disadvantages:

a. Junk mail syndrome and high discard rate
b. Relatively high total cost
c. Limitations on creative format

Interactive Media - Advantages

a.   Cost effectiveness
b.   Easy to modify
c.   Interactive content
d.   International reach
e. Expanding market
f. Constant availability
g. Ease of traffic measurement

Interactive Media - Disadvantages

a.   Privacy concerns
b.   Partial market coverage
c.   Navigation problems
d.   Loss of control

8. Explain how the hospitality and travel industry uses different advertising media.

The hospitality and travel industry does not make uniform use of the various media alternatives.
Some parts of the industry place an above-average emphasis on specific media alternatives. Two
excellent examples of this unbalanced use of media are
fast food's emphasis on television advertising and the airlines' emphasis on newspaper

9. Describe the services of advertising agencies and the advantages of using them.

The five principal services provided by advertising agencies follow:

a.   Advertising planning
b.   Creative services
c.   Media services
d.   Research services
e.   Sales promotion and merchandising services

The advantages of using advertising agencies are as follows:

a.   Employ the best creative minds in advertising
b.   Have accumulated experience from working with a diversity of clients
c.   May actually save the sponsor money
d.   Likely to be more familiar with the media and media vehicles

1. Define the terms sales promotion and merchandising.

Sales Promotion. Approaches other than advertising, personal selling, and public relations and
publicity where the customer is given a short-term inducement to make an immediate purchase.

Merchandising. Materials used in-house to stimulate sales, such as menus, posters, wine lists,
and signs. Also known as point-of-purchase advertising.

2. Explain the six roles of sales promotion and merchandising.

a.   Getting customers to try a new service or menu item
b.   Increasing off-peak sales
c.   Increasing sales in periods that coincide with major events, vacations, or special occasions
d.   Encouraging travel intermediaries to make a special effort to sell services
e.   Helping sales representatives get business from prospects
f.   Facilitating intermediary sales

3. Describe the steps involved in developing a sales promotion and merchandising plan.

a.   Set sales promotion and merchandising objectives
b.   Choose between in-house and agency development
c.   Establish tentative sales promotion and merchandising budget
d.   Consider cooperative sales promotions
e.   Select sales promotion and merchandising techniques
f.   Select media for distributing sales promotions
g.   Decide on timing of sales promotions and merchandising
h.   Pretest sales promotions and merchandising
i.   Prepare final sales promotion and merchandising plan and budget
j.   Measure and evaluate sales promotion and merchandising success

4. Explain the difference between special communication methods and special-offer

Special communication methods. This group gives the promoter additional options of
communicating with potential customers and travel trade intermediaries.

Special-offer promotions. Short-term inducements given to customers, travel trade
intermediaries, and sales representatives. Generally, some type of action must take place from
the potential customer.

5. List the various sales promotion techniques available.

Special communication methods
a.   Specialty advertising
b.   Sampling
c.   Trade and travel show exhibits.
d.   Point-of-purchase displays and other merchandising materials
e.   Point-of-purchase demonstrations
f.   Educational seminars and training programs
g.   Visual aids for sales representatives

Special-offer promotions

a.   Coupons
b.   Price-offs.
c.   Premiums
d.   Contests, sweepstakes, and games
e.   Travel trade inducements
f.   Recognition programs
g.   Continuity programs
h.   Gift certificates

6. Explain the roles and advantages of each sales promotion technique.

Special communication methods

a. Specialty advertising. Free items given to potential customers or travel trade intermediaries.
   Advantage: Flexibility of use.

b. Sampling. Giving away free samples of items to encourage sales, or arranging in some way
   for people to try all or part of a service. Advantage: Gives the recipient a first-hand look at
   the product and encourages future sales if the recipient is pleased with the services offered.

c. Trade and travel show exhibits. Bringing together all parts of the industry (suppliers,
   carriers, intermediaries, and destination marketing organizations) at one location to show off
   their services. Advantage: Offer the exhibitor a highly specialized target audience and an
   efficient alternative to making sales calls to thousand of prospects.

d. Point-of-purchase displays and other merchandising materials. Used at the point of purchase.
   Advantage: Keeps image of service/product in the minds of its customers longer.

e. Point-of-purchase demonstrations. Provides the customer with up-to-date and current sales
   promotions while visiting an establishment. Advantage: Entices and encourages patrons to
   purchase a service on the spot.

f. Educational seminars and training programs. The primary objective is to pass on more
   detailed information and to help travel agents sell services to clients. Advantage: Offer the
   sponsor a highly targeted and influential audience.
Special-offer promotions

a. Coupons. Vouchers or certificates that entitle customers or intermediaries to a reduced price
   on the couponed service or services. Advantage: Coupons deliver greater value in the form of
   a price reduction to the consumer, thus creating more potential customers in the future.

b. Price-offs. A price reduction that does not involve using a coupon. Advantage: These are
   popular because they can be introduced almost immediately.

c. Premiums. Merchandise items that are offered at a reduced price or free with the purchase of
   services or products. Advantage: When consistent with the sponsor’s image (position) and
   target market, the potential for sales increases are great.

d. Contests, sweepstakes, and games. Contests are sales promotions where entrants win prizes
   based on some required skill that they are asked to demonstrate. Sweepstakes are sales
   promotions that require entrants to submit their names and addresses. Games are sales
   promotion events similar to sweepstakes, but they involve using game pieces. Advantage:
   Increases advertising readership, helpful in communicating key benefits, and good at
   elevating awareness of the sponsor’s services.

e. Travel trade inducements. Specialty advertising items, familiarization trips, sweepstakes,
   and educational seminars. Advantage: Promotes the product/service to travel trade
   intermediaries and/or potential consumers to increase awareness of this product/service and
   increase sales.

f. Recognition programs. Offers awards to travel trade intermediaries, sales representatives, or
   customers for achieving or providing certain levels of sales or business. Advantage: Increases
   the use of the sponsor’s services and often increases future sales goals.

g. Continuity programs. Sales purchases that require people to make several purchases,
   sometimes over a long period of time. Advantage: Increases partnerships in marketing
   hospitality and travel with other industries’ services, stimulates more frequent purchases,
   and/or builds long-term loyalty for a company or brand.

h. Gift certificates. Vouchers or checks given away by the sponsor or sold to customers who, in
   turn, give them to others as gifts. Advantage: Encourages recipients to try the services, which
   inevitably increases awareness of the service and future sales.

1. Define personal selling.

Personal selling involves oral conversations, either by telephone or face-to-face, between
salespersons and prospective customers.

2. Explain the roles of personal selling.

a.   Identifying decision makers, decision processes, and qualified buyers
b.   Promoting to corporate, travel trade, and other groups
c.   Generating increased sales at the point of purchase
d.   Providing detailed and up-to-date information to the travel trade
e.   Maintaining a personal relationship with key clients
f.   Gathering information on competitors’ promotions

3. List the three categories of personal selling.

a. Field sales
b. Telephone sales
c. Inside sales

4. Describe the five major personal selling strategies.

a.   Stimulus response
b.   Mental states
c.   Formula
d.   Need satisfaction
e.   Problem solving

5. Explain the steps in the sales process.

a. Prospecting and qualifying prospective customers

    Blind prospecting
    Cold calling or canvassing
    Sales blitz
    Lead prospecting

b. Preplanning prior to sales calls

    Preapproach
    The approach

c. Presenting and demonstrating services
    Sales presentation
    Demonstration

d. Handling objections and questions

    Restate the objection
    Agree and neutralize tactic

e. Closing the sale

    Verbal closing clues
    Nonverbal closing clues

f. Following up after closing the sale

6. Describe the seven possible strategies for closing sales.

a.   Trial close
b.   Assumptive close
c.   Summary or summary-of-the-benefits close
d.   Special concession close
e.   Eliminating-the-single-objection or final-concern close
f.   Limited-choice close
g.   Direct-appeal close

7. Define sales management and explain its functions.

Sales management is the management of the sales force and personal selling efforts to achieve
desired sales objectives.

Functions of sales management:

a. Sales-force staffing and operations
b. Sales planning
c. Sales performance evaluation

8. Describe the characteristics of the successful salesperson.

a. Sales aptitude. The extent of an individual’s ability to perform a given sales job, consisting
   of mental abilities and personality traits.

b. Skill levels. Skills obtained in personal communication and knowledge of services, obtained
   through sales training and previous sales and operational experience.
c. Personal characteristics. Demographic profile, psychographic and lifestyle characteristics,
   physical appearance and traits.

9.    Describe the contents and role of the sales plan.

a. Preparing sales forecasts
b. Developing sales department budgets
    Sales forecast
    Selling-expenses budget
    Sales administration budget
    Advertising and sales promotion budget
c. Assigning sales territories and quotas

10. Explain four characteristics of personal selling in the hospitality and travel industry.

a.   Importance of personal selling varies
b.   Inside selling closely related to service levels
c.   No generally accepted qualifications for industry sales positions
d.   Importance of missionary sales work

1. Define the terms public relations and publicity.

Public relations include all the activities that a hospitality and travel organization uses to
maintain or improve its relationship with other organizations and individuals.

Publicity is a public relations technique that involves non-paid communication of information
about an organization's services.

2. Explain the roles of public relations and publicity in hospitality and travel marketing.

a. Maintaining a positive public presence
b. Handling negative publicity
c. Enhancing the effectiveness of other promotional mix elements

3. List the publics served by a hospitality and travel organization.

Internal publics

a. Employees and employees' families
b. Unions
c. Shareholders and owners

External publics

a.   Customers and potential customers
b.   Other complementary hospitality and travel organizations
c.   Competitors
d.   Industry community
e.   Local community
f.   Government
g.   The media
h.   Financial community
i.   Hospitality and travel schools

4. Describe the steps involved in developing a public relations plan.

a.   Set public relations objectives
b.   Decide on in-house public relations or agency
c.   Establish tentative public relations and publicity budget
d.   Consider cooperative public relations
e.   Select public relations and publicity techniques
f.   Select public relations and publicity media
g.   Decide on timing of public relations
h.   Prepare final public relations plan and budget
i. Measure and evaluate public relations success

5. Identify and describe the techniques and vehicles used for public relations and


Continuous public relations activities:

 a.   Local community involvement
 b.   Industry community involvement
 c.   Newsletters, newspapers, and company magazines
 d.   Employee relations
 e.   Media relations
 f.   Media kits and photography
 g.   Shareholder, owner, and financial community relations
 h.   Relations with hospitality and travel schools
 i.   Relationships with complementary and competitive organizations
 j.   Government relations
 k.   Customer relations
 l.   Advertising

Preplanned, short-term activities:

 a.   News or press releases
 b.   News or press conferences
 c.   Ceremonies, openings, and events
 d.   Announcements
 e.   Feature stories
 f.   Press and travel trade seminars
 g.   Marketing research

Unpredictable, short-term activities:

 a. Handling negative publicity
 b. Media interviews


 a.   Broadcast
 b.   Print
 c.   Internet
 d.   Internal

6. Explain the steps involved in developing good relations with the media.
  a.   Always providing the media with honest and factual information
  b.   Not showing favoritism toward any individual media company or editor/reporter
  c.   Giving news releases or stories to all media at the same time
  d.   Knowing and staying in touch with the key individuals at each media organization

7. Describe the roles and advantages of using public relations consultants.

Roles of public relations consultants:

a. Helping to define public relations objectives
b. Selecting public relations activities and media vehicles
c. Using media contacts to get coverage for clients
d. Providing creative services to develop various materials, programs, and events
e. Conducting research to measure and evaluate the effectiveness of public relations activities
   and various aspects of an organization's image among publics
f. Providing specialized assistance in dealing with specific publics

Benefits of using public relations consultants:

a. Employ some of the best public relations professionals in the country
b. Broad scope of experience; more objective
c. Media contacts

1. Describe the dual role of pricing.

a. A direct determinant of profitability
b. An implicit promotional-mix element

2. Explain pricing's role as an implicit promotional mix element.

Customers tend to read a great deal into the prices they see for hospitality and travel services.
Pricing communicates implicitly by giving customers a perception of the quality that they will
receive from a given price for a service.

3. List and describe the unsophisticated and sophisticated approaches to pricing.

Unsophisticated approaches to pricing:

a.   Competitive approach
b.   Follow-the-leader approach
c.   Intuitive approach
d.   Traditional or rule-of-thumb approach

Sophisticated approaches to pricing:

a.   Target pricing
b.   Price discounting and discrimination
c.   Promotional pricing
d.   Cost-plus pricing
e.   New-product pricing
f.   Price lining
g.   Psychological and odd pricing
h.   Leader pricing
i.   Multistage Approach

4. Explain the concept of target pricing.

Target pricing is where the price is set in terms of a specific return on investment that the
company wants to achieve. It is an example of a pricing approach based on a profit-oriented

5. Describe break-even analysis and how it is used when making pricing decisions.

Break-even analysis involves developing charts that show the relationship of costs, customer
demand volumes, and profits. Costs are separated into fixed and variable in order to do break-
even analysis.
Break-even analysis is used in pricing to determine the level of profitability from an assumed
selling price, when the total fixed costs and variable cost per unit are known. The break-even
point is determined, where the selling price and demand volume produce revenues that exactly
equal fixed and variable costs.

6. Explain the multistage approach to pricing and, in the process, list the nine Cs of

It begins by considering the company's objectives and specific pricing objectives. Another eight
other factors are then evaluated before arriving at the price. Together the factors reviewed are
known as the nine Cs of pricing:

a.   Customer characteristics
b.   Corporate objectives
c.   Corporate image and positioning
d.   Customer demand volumes
e.   Costs
f.   Competition
g.   Channels
h.   Complementary facilities and services
i.   Consistency with marketing-mix elements and strategy

7. Explain the concept of value for money and how this relates to pricing.

Value for money is the way customers compare the amount of money they pay to the quality of
the facilities and services they receive. A single price figure may have different value levels to
different customers. That is, value is only relevant in the eyes of the beholder.

1. Define marketing management and list its five components.

Marketing management includes all the activities necessary to plan, research, implement,
control, and evaluate the marketing efforts of a hospitality and travel organization. There are
five components of marketing management:

a.   Planning
b.   Research
c.   Implementation
d.   Control
e.   Evaluation

2. Explain the benefits of marketing management.

a.   Marketing efforts are accomplished in a well-planned, systematic way
b.   An adequate amount of marketing research and other marketing information is generated
c.   Marketing weaknesses are quickly spotted and corrected
d.   Funds and human resources available for marketing are used as efficiently and effectively as
e.   Marketing efforts are always under careful scrutiny; it is always thought that there is room
     for improvement
f.   The organization is in a better position to adapt to change among customers and competition,
     and in the industry
g.   Marketing is better integrated into all the organization's activities and within its various
h.   Marketing personnel and other staff members are more highly motivated toward achieving
     marketing objectives
i.   There is a much clearer understanding of marketing results, good and bad, and the reasons
     for successes and failures
j.   There is definite accountability for marketing

3. Describe the five different methods of organizing a marketing department.

a.   Marketing and promotional mix elements
b.   Facilities or services
c.   Geography
d.   Customer groupings
e.   A combination of two of the above four criteria

5. Explain the steps and procedures involved in staffing and managing marketing

a. Recruiting and hiring
b. Orientation and training
c. Motivation, coordination, and communication

5. List the unsophisticated and sophisticated approaches to setting marketing budgets and
   identify the most effective method.

Unsophisticated approaches:

a. Arbitrary and affordable approach
b. Percentage-of-sales or rule-of-thumb approaches
c. Competitive-parity approach

Sophisticated approaches:

a.   The building block procedure
b.   Objective-and-task approach
c.   Zero-based budgeting approaches
d.   Other approaches

6. Describe the building-block approach for setting a marketing budget and explain its

The building block approach is a carefully sequenced, step-by-step process for developing a
marketing budget. It is also known as the objective-and-task approach.

The benefits of using the building block approach are:

  a.    Spending is closely tied to marketing objectives
  b.    Budgets reflect the organization's target market priorities
  c.    Budgets are solidly based upon research

7. Define marketing control and marketing evaluation.

Marketing control represents the steps that an organization takes to ensure that its marketing
plans are successful. This includes setting standards, measuring performance against standards,
and correcting deviations from standards and plans.

Marketing evaluation comprises the techniques used after the marketing plan period to analyze
success in achieving individual marketing objectives and to more broadly assess the entire
organization's marketing efforts.

8. Describe the process used to control the marketing plan.

a. Setting standards based on plans
b. Measuring performance against standards
c. Correcting deviations from standards and plans
9. List and explain the techniques available for marketing evaluation.

a.   Sales analysis
b.   Market-share analysis
c.   Marketing cost and profitability analysis
d.   Efficiency ratios
e.   Marketing-effectiveness rating review
f.   Marketing audit

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