© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Chapter Ten Understanding Competition

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Macrocompetition  Any organization that competes for a customer’s business  The maturity stage  Missed opportunities become threats  Marketing threats: Michael Porter’s Five Forces Model

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Choosing the Right Competition  Critical to a competitive analysis  Focus on the concept at the expense of the customer: “conceptitis”  How do we compete? –Choose competition you can and want –Ask customers where else they would like to patronize and why

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Competitive Intensity  How intensely companies battle each other  Factors contributing to competitive intensity  Example: the amenities war  Services can be easily duplicated  When the market needs are similar, intensity is greater

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Competitive Intelligence  Know your competition  Measurable differences: –REVPAR –Yield index –REVPOR –REVPAC –Internet REVPAR  Measurable differences (cont.): –Purchased data –RSQFT –REVPAS –Customer satisfaction index (CSI) –Perceptual mapping

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Hotel Actual Rooms Sold Occupancy % Fair Share % Actual Share % Upper-Tier Hotels A B C Yours Total Middle-Tier Hotels E F G Total Example of Market Share

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Hotel Actual Rooms Sold Occupancy % Average Daily Rate (ADR) Revenue REVPAR Yield Index Upper-Tier Hotels A $120$26,400$ B , C , Yours , Total , Middle-Tier Hotels E $110$24,200$ F , G , Total , Example of REVPAR

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition ImportanceBrand ABrand B RatingScoreRatingScore ColumnABCDE FeatureScale: 1-10 A x BScale: 1-10A x D It is a place friends like to go Atmosphere is very pleasant One place seems to have better odds Slot machines filled in a timely manner Types of promotions offered TOTAL INDEX (281.54/384 x 100)67.53 Calculation of Competitive Index

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Competitive Intelligence  Types: –Defensive –Passive –Offensive  Objectives: –Understand positional advantage or disadvantage –Understand strategy or tactics of competitors –Create strategies that will lead to a competitive advantage

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Competitive Intelligence (cont.)  Step-by-step procedure 1. Setting up the process 2. Collecting the raw data 3. Evaluate and analyze the data 4. Draw conclusions and use the data

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Competitive Analysis  Barriers: –Size of a targeted market –Cost differentials (i.e., advertising)  Sustainable competitive advantage: –Customers perceive a consistent difference –Differences are a result of better capability –Differences and capability endure over time

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Competitive Marketing  Positioning –Develop strengths that align with competitors’ weaknesses –Take the offense to disrupt the balance –Anticipate shifts in the industry to exploit change –Obtain a position that is less vulnerable to attack

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Finding Marketing Opportunities  Identify and quantify customer problems  Simple and easily understood by customer  Know your market, customers, and their problems  Ask: Will it create/keep a customer?

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Feasibility Studies  Quantitative research  strength of an opportunity  Evaluate marketing opportunities  Focus on proposed financial performance  Depends on the behavior of customers

© 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition