1. The Marketing Environment

2. Key Terms Demography Echo boomers (baby boomlet generation)
Economic environment
Environmental management perspective
Financial intermediaries
Generation X
Macroenvironment
Marketing environment

3. Key Terms Marketing intermediaries Marketing services agencies
Microenvironment
Political environment
Suppliers

4. “It is useless to tell a river to stop running; the best thing is to learn how to swim in the direction it is flowing.” -Anonymous

5. Chapter Objectives
List and discuss the importance of the elements of the company’s micro-environment
Describe the macro-environmental forces that affect the company’s ability to serve its customers
Explain how changes in demographic and economic environments affect marketing and describe the levels of competition

6. Chapter Objectives
Identify the major trends in the firm’s natural and technological environments
Explain the key changes that occur in the political and cultural environments
Discuss how companies can be proactive rather than reactive when responding to environmental trends

7. The Company’s Microenvironment
Suppliers
Marketing Intermediaries

8. The Company’s Microenvironment

9. The Company
Marketing managers must work with all departments of a company
All Departments have an impact on the marketing department’s plans and actions
“Think Consumer”

10. Suppliers
Suppliers are firms and individuals that provide the resources needed by the company to produce its goods and services
Suppliers can seriously affect marketing plans

11. Marketing Intermediaries
Marketing intermediaries help the company promote, sell, and distribute its goods to the final buyers
Marketing service agencies help formulate and implement marketing strategies
Financial intermediaries help hospitality companies finance their transactions

16. The Company’s Macro-environment

17. Competitors
To be successful, a company must satisfy needs and wants of consumers better than competitors
A company should monitor three variables when analyzing each of its competitors
Share of Market
Share of Mind
Share of Heart

18. Competition
Is the “enemy” or anyone who competes for the same market customers?
Understand the competition as well as the capabilities of your competitors
Macro-competition
Any business that competes for the same customers in the same product class at the same point in time

19. Competitive Intelligence
Information on what the competition is doing, its position and intentions as well as its strengths and weaknesses
Public information
Media
Trade press
Trade associations
Company brochures
Flyers and advertisements
Annual reports
Talk directly to the competition or customers

20. Competitive Intelligence
Actual market share
The amount of business a firm actually receives in relative proportion to its direct competitors in the same product class
Fair market share
The amount of business a firm expects to receive in relative proportion to its direct competitors in the same product class

21. Market Share 300 220 500 350 1200 600 2600 1420 Hotel Actual Rooms
Rooms Sold
Occupancy %
Fair Share %
Actual Share %
Rooms sold/actual rooms
Your capacity/
Total capacity
Your occupancy/
Total market occupancy A
300
220
73.3% (220/300) B
500
350
24.7% (350/1420) C
1200
YOUR HOTEL
600
23.1% (600/2600)
TOTAL
2600
1420

22. Using Competitive Intelligence
Sustainable competitive advantage happens when:
Customers perceive a consistent difference in important attributes between one firm or property and its competition
The difference is the result of a capability gap between the firm and its competitors
Both the difference in important attributes and the capability gap can endure/bear over time

23. Choosing the Right Competition
Success lies in thorough analysis of the current situation
Determine which other firms in the same product class are pursuing the same customers at the same point in time

24. Demographic Environment
Demography is the study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics
Demographics change over time and companies must keep up with them

25. Demographic Environment
Baby boomers – 77 Million post-World War II babies born between Generation X – 45 million born between , the “birth dearth” Generation Y (echo boomers) – 72 million born between Generation Z (techno boomers) – born after -1996

26. Economic Environment
The economic environment consists of factors that affect consumer purchasing power and spending patterns
It is not enough to have people, the people must have buying power

27. Economic Environment
Includes economics that effect hospitality including:
recession
Inflation
employment levels
personal discretionary income
foreign exchange rates
Foreign development and investment as economies grow stronger

28. The Global Economy
Global economic dealings, such as currency exchange rates, have a large impact on travel and tourism across the world

29. Natural Environment
The natural environment consists of natural resources required by marketers or affected by marketing activities
Anyone involved in tourism is responsible for protecting the environment and ensuring sustainability

30. Ecological/natural environment
Includes issues related to our natural environment
Ecotourism
Disposal
Recycling
Pollution
Ecological gains in the hotel industry have largely taken place

31. Technological Environment
The hospitality industry is greatly affected by changes in technology
The Internet, computerized systems, key cards, etc.
Faces opposition by those who believe it threatens privacy, simplicity, and even the human race
The most dramatic force affecting tourism

32. Technological Environment
Consideration of technology impact from both a consumer and business perspective
Potentially a source of competitive advantage
Instrumental in hospitality and tourism
Have potential to increase customer satisfaction

33. Political Environment
The political environment is made up of laws, government agencies, and pressure groups that influence and limit the activities of various organizations and individuals in society

34. Political Environment
Has an impact on hospitality both in the current government and in destinations interested in developing tourism
Government changes can affect business opportunities and influence global expansion
Government interested in tax earnings and employment potentials

35. Political Trends
Increased legislation and regulation affecting business
Changing government Agency Enforcement
Increased emphasis on socially responsible actions and ethics

36. Cultural Environment
The cultural environment includes institutions and other forces that affect society’s basic values, perceptions, preferences, and behaviors
Persistence of cultural values
Subcultures

37. Regulatory environment
Government regulations or ordinances that affect consumers and businesses
Local
State
Federal
Can have great impact on costs and profits
Some countries have different and sometimes undeveloped regulatory and legal environments, or those that are not recognized or followed

38. Linked Environmental Factors
Environmental factors can also work together to bring about change
Americans now eat more meals prepared outside than inside the home
Low-carb diets
Grocery stores competing with restaurants

39. Responding to the Marketing Environment
Many companies feel the marketing environment is uncontrollable
An environmental management perspective takes action to sway the marketing environment
Take a proactive rather than a reactive approach

40. Environmental Scanning
Determine environmental areas that require monitoring
Determine how the information will be collected
Implement data collection plan
Analyze data and use in market planning process

41. Environmental Scanning
Examining the external environment to determine potential opportunities and threats that could affect a business
Requires an awareness of what is going on in order to be proactive rather than reactive

42. Potential Competitors
Technological
Environment
Sociocultural
Environment
Risk of Entry by
Potential Competitors
Bargaining Power of
Suppliers
Threat of
Substitute
Products
Ecological
Environment
Rivalry Among
Established Firms
Regulatory
Environment
Economic
Environment
Bargaining Power
Of Buyers
Political
Environment
Five Forces Model

43. Using Marketing Information
Simple data collection is not sufficient
Information must be:
Reliable
Timely
Used in decision making

44. Discussion Questions
What environmental trends will affect the succes of a first class hotel chain, such as Hyatt or Hilton, over the next 10 years? If you were corporate director of marketing for this type of hotel, what plans would you make to deal with these trends?
Explain how environmental trends have effected the food and the beverage offerings a business class hotel such as Sheraton etc.

45. End of chapter slides