1. © 2007 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Chapter Ten Understanding Competition

2. © 2007 Pearson Education, Upper Saddle River, NJ 07458. 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

3. © 2007 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition

4. © 2007 Pearson Education, Upper Saddle River, NJ 07458. 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

5. © 2007 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition

6. © 2007 Pearson Education, Upper Saddle River, NJ 07458. 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

7. © 2007 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition

8. © 2007 Pearson Education, Upper Saddle River, NJ 07458. 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

9. © 2007 Pearson Education, Upper Saddle River, NJ 07458. 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 A300220 73.3 11.515.5 B500350 70.0 19.224.7 C1200500 41.7 46.235.2 Yours600350 58.3 23.124.7 Total26001420 54.6 100.0 Middle-Tier Hotels E275220 80.0 31.339.6 F425360 84.7 48.350.0 G180140 77.8 20.419.4 Total880720 81.8 100.0 Example of Market Share

10. © 2007 Pearson Education, Upper Saddle River, NJ 07458. 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 A30022073.3$120$26,400$88.001.17 B50035070.013045,50091.001.21 C120050041.715075,00062.500.83 Yours60035058.314049,00081.671.08 Total2600142054.6137.96195,90075.351.00 Middle-Tier Hotels E27522080.0$110$24,200$88.001.06 F42536084.710036,00084.701.02 G18014077.89012,60070.000.85 Total88072081.8101.1172,80082.701.00 Example of REVPAR

11. © 2007 Pearson Education, Upper Saddle River, NJ 07458. 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 go7.307.6055.486.4046.72 Atmosphere is very pleasant8.807.7067.767.6066.88 One place seems to have better odds7.406.8050.326.0044.40 Slot machines filled in a timely manner7.506.8051.006.8051.00 Types of promotions offered7.407.7056.986.8050.32 TOTAL384.00281.54259.32 INDEX 73.32 (281.54/384 x 100)67.53 Calculation of Competitive Index

12. © 2007 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition

13. © 2007 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition

14. © 2007 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition

15. © 2007 Pearson Education, Upper Saddle River, NJ 07458. 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

16. © 2007 Pearson Education, Upper Saddle River, NJ 07458. 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

17. © 2007 Pearson Education, Upper Saddle River, NJ 07458. 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

18. © 2007 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition

19. © 2007 Pearson Education, Upper Saddle River, NJ 07458. 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

20. © 2007 Pearson Education, Upper Saddle River, NJ 07458. 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?

21. © 2007 Pearson Education, Upper Saddle River, NJ 07458. 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

22. © 2007 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition