Marketing Prelim 3 – Chapters 16, 17, 18

Chapter 16
Direct and Online Marketing: Building Customer Relationships
Key Terms
Business-to-business (B2B) online marketing
Using B2B trading networks, auction sites, spot exchanges, online product catalogs, barter sites, and other online resources to reach new customers, serve current customers more effectively, and obtain buying effectiveness and better prices
Business-to-consumer (B2C) online marketing
The online selling of goods and services to final customers
Buzz marketing
Generates excitement, creates publicity, and communicates brand-relevant information through unexpected or outrageous means
Consumer-to-business (C2B) online marketing
Online and exchanges in which consumers search out sellers, learn about their offers, and initiate purchases, sometimes even driving transaction terms
Consumer-to-consumer (C2C) online marketing
Online exchanges of goods and information between final consumers
Corporate (or brand) Web site
Web sites that seek to build customer good will and to supplement other sales channels rather than to sell the company’s product directly
Customer database
An organized collection of comprehensive data about individual customers or prospects, including geographic, demographic, psychographic, and behavioral data
Data warehouse
A central repository of an organization’s customer information
Direct-mail marketing
Direct marketing through single mailings that include letters, ads, samples, foldouts, and other “salespeople with wings” sent to prospects on mailing lists
The general term for a buying and selling process that is supported by electronic means, primarily the Intranet
Integrated direct marketing (IDM)
Direct-marketing campaigns that use many vehicles and multiple stages to improve response rates and profits
Marketing Web site
Web sites designed to engage consumers in an interaction that will move them closer to a purchase or other marketing outcome
Online advertising
Advertising that appears while consumers are surfing the Web, including display ads, search-resulted ads, and online classifieds
Online marketing
Company efforts to market products and services and build customer relationships over the Internet
Unsolicited, unwanted commercial e-mail messages
Search-related advertising (or contextual advertising)
Text-based ads and links that appear alongside search engine results on sites such as Google and Yahoo!
Telephone marketing
Using the telephone to sell directly to customers
Viral marketing
The Internet version of word-of-mouth marketing — Web sites, videos, e-mail messages, or other marketing events that are so infections that customers will want to pass them along to friends
Chapter Review
Direct Marketing
consists of direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships. Direct marketers communicate directly with consumers, often on a one-to-one interactive basis
Growth and benefits of direct marketing
Direct marketing continues to become more Web oriented. The Internet now accounts for about 18 percent of direct marketing—driven sales
Benefits to customers
Direct marketing is convenient, easy, private, and open 24 hours.

Companies can access customers and find out how to design products that will better fit their customer’s needs.

Direct marketing is interactive, allowing customers to customize their orders

Benefits to sellers
Direct marketing can build relationships through personalized communication.

Direct marketing is low cost, efficient, and quick.

Direct marketing is private and can be measured.

Finally, direct marketing gives sellers access to buyers they could not reach through other channels

Customer Databases and Direct Marketing
Effective direct marketing begins with a good customer database.

A customer database is an organized collection of comprehensive data about individual customers or prospects, including geographic, demographic, psychographic, and behavioral data.

A good customer database can be a potent relationship-building tool.

Database uses
Companies use databases to locate good potential customers and to generate sales leads.

They can mine their databases to learn about customers in detail and then fine-tune their market offerings and communications to the special preferences and behaviors of target segments or individuals.

In all, a company’s database can be an important tool for building stronger long-term customer relationships.

Data warehouse
A data warehouse is used to combine direct databases a firm might have into one integrated database
Companies use databases to find relationships in the data that will help them market better to their customers
Databases should serve the customer
A database should allow the company to better serve the customers by developing systems and providing products that will meet their needs
Direct Marketing Builds Relationships
Direct marketing allows companies to develop a strong relationship with their customers, which helps prevent them from switching to competitors
Relationship marketing has a long-term orientation
The goal is to deliver long-term value to customers, and the measure of success is long-term customer satisfaction.

Relationship marketing requires that all the company’s departments work together with marketing as a team to serve the customer.

It involves building relationships at many levels: economic, social, technical, and legal, resulting in high customer loyalty

Building relationships
Relationships can be built through financial benefits, social bonds, and changing the structure of how to do business to better fit the needs of your customers
Benefits of customer-relationship management
The benefits of customer-relationship management comes from:

building continued patronage of loyal customers,
reduced marketing costs,
decreased price sensitivity of loyal customers,
and partnership activities of loyal customers

Traditional Forms of Direct Marketing
Direct-mail marketing
Telephone marketing
Kiosk marketing
Direct-mail marketing
Involves sending an offer, announcement, reminder, or other item to a person at a particular address.

Using highly selective mailing lists, direct marketers send out millions of mail pieces each year: letters, catalogs, ads, brochures, samples, DVDs, and other “salespeople with wings.”

Direct mail is by far the largest direct-marketing medium

Telephone marketing
Involves using the telephone to sell directly to consumers and business customers.

Telephone marketing now accounts for 22 percent of all direct marketing-driven sales

Kiosk marketing
As consumers become more and more comfortable with computer and digital technologies, many companies are placing information and ordering machines called kiosks (in contrast to vending machines, which dispense actual products) in stores, airports, and other locations
Digital Direct-Marketing Technologies
Mobile phones
Podcasting and vodcasting
Interactive TV (iTV)
Just as databases can develop mailing addresses, they can develop e-mail addresses.

Given its targeting effectiveness and low costs, e-mail can be an outstanding market investment

Mobile phones
With more than 230 million Americans now subscribing to wireless services, many marketers view mobile phones as the next big direct-marketing medium.

A growing number of consumers—especially younger ones—are using their cell phones as a “third screen” for text messaging, surging the wireless Web, watching downloaded videos and shows, and checking e-mail

Podcasting and vodcasting
Are the latest on-the-go, on-demand technologies.

The name podcast derives from Apple’s ubiquitous iPod.

With podcasting, consumers can download audio files (podcasts) or video files (vodcasts) via the Internet to an iPod or other handheld device and then listen to or view them whenever and wherever they wish

Interactive TV (iTV)
Lets viewers interact with television programming and advertising using their promote controls
Online marketing domains
– B2C (business-to-consumer) e-commerce

– B2B (business-to-business) e-commerce

– C2B (consumer-to-business) e-commerce

B2C (business-to-consumer) e-commerce
The online selling of goods and services to final customers
B2B (business-to-business) e-commerce
B2B trading includes auction sites, spot exchanges, online product catalogs, barter sites, and other online resources to reach new customers, serve current customers more effectively, and obtain buying effectiveness and better prices
C2B (consumer-to-business) e-commerce
Online exchanges of goods and information between final consumers
Setting Up an Online Presence
1. Creating a Web site
2. Designing an effective Web site
3. Creating or participating in online social networks
4. Online Privacy and Security
Creating a Web site
For most companies, the first step in conducting online marketing is to create a Web site.

However, beyond simply creating a Web site, marketers must design an attractive site and find ways to get consumers to visit the site, stay around, and come back often

Designing an effective Web site
The seven Cs provide a framework for designing a Web site:

Context: the site’s layout and design
Content: the text, pictures, sound, and video that the Web site contains
Community: the ways that the site enables user-to-user communication
Customization: the site’s ability to tailor itself to different users or to allow users to personalize the site
Communication: the ways the site enables site-to-user, user-to-site, or two-way communication
Connection: the degree that the site is linked to other sites
Commerce: the site’s capabilities to enable commercial transactions

Creating or participating in online social networks
The popularity of the Internet has resulted in a rash of online social networks or Web communities.

Countless independent and commercial Web sites have arisen that give consumers online places to congregate, socialize, and exchange views and information.

Marketers can engage in online communities in two ways:

They can participate in existing Web communities or….
They can set up their own

Online Privacy and Security
Marketers have a responsibility to protect the privacy of customer information and make sure personal information such as credit card numbers is secure
Chapter 17
Destination Marketing
Key Terms
Agriculture-based tourism that includes farms, ranches, and wineries. It provides rural areas with a means to attract tourists
Persons with a need for new experiences, such as backpackers and explorers
Destination marketing organization (DMO)
A group that promotes a specific destination. Often a local convention and visitors’ bureau (CVB) serve as the DMO
Places with some form of actual or perceived boundary, such as the physical boundary of an island, political boundaries, or even market created boundaries
Familiarization trip (Fam trip)
A trip where travel agents or others who can send business to a tourist destination attraction, cruise, or hotel are invited to visit at a low cost or no cost
The system according to which a company, organization, or other body is organized at the most basic level
Destinations such as the United States that contain thousands of microdestinations, including regions, states, cities, towns, and visitor destinations within a town
Medical tourism
One of the fastest-growing and most lucrative tourism markets. Tourists spend a large amount on medical treatment, stay in top hotels, and often travel around the country after their surgery
Multiplier effect
Tourist expenditures that are recycled through the local economy, being spent and spent again
National tourist organizations (NTOs)
A national government or quasi-government agency that makes destination tourism
Persons who do not desire change when they travel. They like to visit nonthreatening places and stay in familiar surroundings
A stay of one or more nights away from home for holidays, visit to friends or relatives, business conferences, or any other purposes, except such things as boarding, education, or semipermanent employment
Chapter Review
Tourism destination is composed of:
Are places with some form of actual or perceived boundary
such as the United States contain thousands of microdestinations, including regions, states, cities, towns, and visitor destinations within a town
Benefits of tourism

Supports industries and professions

Multiplier effect: Tourism expenditures are recycled through the economy

Source of state and local taxes

Stimulates exports of place made products

Destinations must maintain…?
Infrastructure. Destinations that fail to maintain the necessary infrastructure or build inappropriate infrastructure run significant risks
Sustainable tourism
A destinations attractiveness can be diminished by violence, political instability, natural catastrophe, adverse environmental factors, and overcrowding
Sustainable tourism examples:
– Modified environments and ecotourism subsets
– Industry and community cooperation
– Carbon-neutral vacations
Tourism Strategies and Investments
Tourism events and attractions
Sports events
Tourism events
Events that attract a desired market and harmoniously fit with a community’s culture can provide beneficial results, particularly if the event regularly reoccurs over a period of years
Tourism attractions
Attractions may be natural, such as Niagara Falls or the Scottish Highlands or a beach. They can also be manufactured, such as the shopping areas of Buckingham Palace, Hong Kong, the Vatican, or a casino resort
Rejuvenating a destination
Waterfront attractions
Casinos as attractions
Indian gaming
Stopover tourism
Stopover tourism
Many visitor destinations are in fact only stopover destinations for travelers on their way elsewhere
A decision framework
event planning
Sports events
Biking and marathon events
Segmenting and Monitoring the Tourist Market
Tourism planners must consider:
– How many tourists are desired
– Which segments to attract
– How to balance tourism with other industries
Agriculture-based tourism that includes farms, ranches, and wineries. It provides rural areas with a means to attract tourists
Space tourism
As private companies provide vehicles to send tourists into space, this form of tourism will develop. In the near term, it will just be for the very rich
Multi-day hiking and religious pilgrimages
Many potential tourists are tired of traditional tourism opportunities, such as a beach resort. A huge and growing market exists for multi-day hiking. In some cases, hiking has a religious basis, such as pilgrimages to significant religious sites.
Volunteer vacationing
Families and individuals take trips to less developed areas to help the people in the area and gain an understanding of their culture. The tourists perform tasks such as building housing, schools, and churches
Medical tourism
Is one of the fastest-growing and most lucrative tourism markets.

Tourists spend a large amount on medical treatment, stay in top hotels, and often travel around the country after their surgery.

The aging baby boomers and the growing cost of health care will ensure the growth of medical tourism in the future

Genealogical tourism
The interest in knowing more about one’s ancestors has grown substantially in recent years. Many people plan vacations to visit genealogical research sites
Identifying target markets
Collect information about its current visitors

Audit the destination’s attractions and select segments that might logically have an interest in them

Self-contained attraction and event destination
Cruise ships, river paddle ship, or a special railroad…

These self-contained, moving destinations, offer a variety of events for passengers and dining is particularly important.

Games, gambling, theater, musicals, participatory, murder mysteries, seminars, dances, and a host of other on-board events enhance the pleasure of moving destinations.

Classification of visitor segments
Group-inclusive tour (GIT)
– ex.] organized mass tourists

Independent traveler (IT)
– ex.] explorers

Monitoring the tourist markets
Tourist markets are dynamic and a marketing information system is part of any well-run tourist organization
Communicating with the Tourist Market
Competition for visitors requires image making

Developing packages of attractions and amenities

UNESCO World Heritage Sites

Competition for visitors requires image making
destination images are heavily influenced by pictorial creations used in movies or television, by music, and in some cases, by popular entertainers and celebrities.
Developing packages of attractions and amenities is an effective way of communicating with potential travelers
Attractions alone do not attract visitors. Most places seek to deepen the travel experience by providing greater value and making the experience more significant and rewarding

Competition among destinations extends to restaurants, facilities, sports, cultural amenities, and entertainment

UNESCO World Heritage Sites
This program designates and thereby hopes to help conserve sites of outstanding cultural or natural importance to the common heritage of humanity
Organizing and Managing Tourism Marketing
Making a destination tourist friendly is the task of a central tourist agency which may be public, quasi-public, nonprofit, or private.

These agencies are referred to as national tourist organizations (NTOs), state tourist organizations (STOs), convention and visitors’ bureaus (CVBs), or destination management organizations

Chapter 18
Next Year’s Marketing Plan
Key Terms
Competitive analysis
An analysis of the primary strengths and weaknesses, objectives, strategies, and other information relative to competitors
Environmental factors
Social, political, and economic factors that affect a firm and its marketing program
Executive summary
A short summary of the marketing plan to quickly inform top executives
Market potential
The total estimated dollars or unit value of a defined market for a defined product, including competitive products
Market Trends
External trends of many types that are likely to affect the marketing in which a corporation operates
Quantitative and time-specific accomplishment measurements established for members of a sales force
Specific dates to accomplish strategies and tactics
Chapter Review
Purpose of a Marketing Plan
Serves as a road map for all marketing activities of the firm for the next year

Ensures that marketing activities are in agreement with the corporate strategic plan

Forces marketing managers to review and think objectively through all steps in the marketing process

Assists in the budgeting process to match resources with marketing objectives

Tips for Writing the Executive Summary
– Write it for top executives
– Limit the number of pages to between two and four
– Use short sentences and short paragraphs
Organize the Executive Summary as follows:
Describe next year’s objectives in quantitative terms

Briefly describe marketing strategies to meet goals and objectives

Identify the dollar costs necessary as well as key resources needed

Read and reread before final submit

A marketing plan supports the company’s strategic plan in several ways. Next year’s marketing strategies and tactics must support strategic decisions such as the following:
– Corporate goals: profit, growth, and others
– Desired market share
– Positioning of the enterprise or of product lines
– Vertical or horizontal integration
– Strategic alliances
– Product-line breadth and depth
Marketing-related plans also include the following:
Advertising and promotion
Marketing research
Customer services
Departments within a company that are closely intertwined with marketing:
Operations and finance
Corporate direction
Mission statement
Corporate philosophy
Corporate goals
Positioning statement
A marketing plan should provide a positioning statement of how the enterprise intends to differentiate—position itself—in the marketplace. This provides essential guidance to the rest of the plan
Analysis of major environmental factors
– ex.] crime and changing demographics

– ex.] legislation affecting taxation, pension benefits, and casino gambling. International politics.

– ex.] changes in economic variables such as employment and interest rate. Hospitality industry, especially lodging and cruising sectors, is highly sensitive to business-cycle movements

Economic drivers of growth
Economic drivers of growth have the ability to rapidly affect change. Marketers must be aware of these drivers before, during, and after entry into a market.

– ex.] The Aerotropolis

The aerotropolis is a transportation and urban development concept built around an airport. An aerotropolis is designed to serve as a powerful economic development force. These centers are built to facilitate the rapid movement of fright and passengers
Competitive analysis
List the major existing competitors confronting your firm next year

List new competitors

Describe the major competitive strengths and weaknesses of each competitor

Marketing trends
Monitor visitor trends, competitive trends, related industry trends
Market potential
Market potential should be viewed as the total available demand for a firm’s product within a particular geographic market at a given price. It is important not to mix different products into an estimate of market potential

Provide an estimate or guesstimate of market potential for each major product line in monetary terms such as dollars and in units such as room nights or passengers

Marketing research
Macro-market information
Micro-market information
Macro-market information
– Industry trends
– Socioeconomic and political trends
– Competitive information
– Industry-wide customer data
Micro-market information
– Guest information
– Product/service information
– New-product analysis and testing
– Intermediary buyer data
– Pricing studies
– Key account information
– Advertising/promotion effectiveness
Segmentation and Targeting
The selection of segments is the result of the following:

– Understanding who the company is and that it wishes to be
– Studying available segments and determining if they fit the capabilities and desires of the company to obtain and secure them

Next Year’s Objectives
Quantitative objectives
Other objectives
Quantitative objectives
Expressed in monetary terms, expressed in unit measurements, time specific and profit/margin specific
Other objectives
Corporate goals, corporate resources, environmental factors, competitions, market trends, market potential, and available market segments and possible target markets
Advertising, promotion, public relations, marketing research, and sales

examples for hospitality industry:
– avg. occupancy
– avg. room rate

List primary marketing/sales objectives for next year

List sub-objectives for next year

Break down objective by quarter, month, and week

List other specific sub-objectives by marketing support area, such as advertising/promotion objectives

Next Year’s Quotas
– Based on next year’s objectives
– Individualized
– Realistic and obtainable
– Broken down to small units, such as each salesperson’s quota per week
– Understandable/measurable
Plan must be communicated to:
– Top management
– Board of directors or group of investors
– Subordinates
– Vendors
– Other -> see next card…
Other departments, such as yield or revenue management, housekeeping, front desk, customer service, and maintenance will be affected by next year’s plan
Action quotas
Break down and list quotas for sales departments, sales territories, all sales intermediaries, each sales intermediary, and each salesperson
Action Plans: Strategies and Tactics
Cluster marketing
Sales strategies
Advertising / promotion strategies
Pricing strategy
Product strategies
Far too often, strategies and tactics have little relationship to objectives. This is always an error and is commonly the result of the following:
Desire to maintain status quo. Strategies and tactics do not change because they are perceived to be working even though solid proof of their effectiveness seldom exists

Lazy, incompetent, or unsure management. These people do not wish to risk their positions through new strategies and tactics

Failure to engage in marketing planning or to view the processes as serious and meaningful to decision making

Undue heavy influence of outside vendors, such as advertising agencies, which do not wish to change direction or try new media

Failure to understand the relationship between objectives, strategies, and tactics

Myopic thinking that things are going well and one does not fix something that is not broken. Unfortunately, in the fast-paced, competitive hospitality industry,, by the time the product is demonstrable broken, it is beyond repair.

Cluster marketing
Different properties managed by the same management company within a common market area; however, each may represent a separate flag and have different ownership
Sales strategies
Prevent erosion of key accounts
Grow key accounts
Grow selected marginal accounts
Eliminate selected marginal accounts
Retain selected marginal accounts but provide lower-cost sales support
Obtain new business from selected prospects
Distribution strategies
The general sales strategy is supported by specific sales tactics such as the following:
Outside the Company (examples)
– Sales blitz of all or targeted accounts and projects
– Telephone, direct mail, and personal sales calls to selected decision makers and decision influencers
– Trade booths at selected travel shows
– Sales calls and working with travel intermediaries: tour wholesalers, travel agencies, incentive bonuses, and international sales reps
– Luncheon for customers, prospects, or decision influencers
– Travel missions and other tactics

Inside the Company (examples)
– Training of sales staff
– Involvement and support of nonsense personnel
Motivational and control programs
Involvement and support of management

Advertising / promotion strategies
Select a blend or mix or media
– may include commissional mass media, direct mail, trade shows, billboards, specialty advertising, social media

Select or approve the message
– this includes graphics, color, size, copy, and other format decisions

Design a media schedule showing when each medium, including non-commissionable media, will be used

Design a schedule of events
– such as public relations events and familiarization (FAM) trips for travel writers

Carefully transmit this information to management

Supervise the development and implementation of advertising/promotion programs, with particular care given to timetables and budget constraints

Ensure responsibility for the outcome
– increasingly, top management is requiring those in charge of advertising/promotion to prove effectiveness and to stand behind results

Pricing strategy
Carefully review pricing objective with departments responsible for pricing, planning, and implementation

Refine pricing objectives to reflect sales and revenue forecasts

Describe pricing strategies to be used throughout the year

Make certain that price, sales, and promotion/advertising objectives are synchronized and working in support of corporate objectives

Product strategies
Describe the involvement of the marketing department in major strategic product development

Describe the role of marketing in new-product acquisition or product development

Describe ongoing or planned product development programs for which marketing has responsibility

Resources Needed to Support Strategies and Meet Objectives
Study and then list the need for new marketing/sales personnel, including temporary help during the next year

Study and list the type and amount of equipment and space that will be needed to support marketing/sales

Study and list the amount of monetary support needed next year

Study and list the amount and type of other costs necessary next year

Study and list the amount of outside research, consulting, and training assistance needed

Prepare a marketing budget for approval by top management

Marketing Control
Sales force members often wish to protect themselves and give lower sales estimates than are actually possible

The company has certain sales objectives it expects based on the needs of the company

Management may have access to marketing research information not viewed by the sales force

Management may have a history of dealing with the sales force and realizes that forecasts are generally too high or too low by x percent

Management may be willing to provide the marketing/sales department with additional resources that are unknown to members of the sales force

Marketing objectives should be periodically evaluated to ensure they are consistent with the organizations goals and overall marketing strategy. (T/F)?
Marketing activity timetable
Method used to ensure that tasks are completed on time

This simple device lists major activities, the dates they must be completed, the person responsible, and a space for checking whether the task has been accomplished

Changes in tactics normally do not require top management approval and are viewed as the normal responsibility of marketing/sales managers (T/F)?
Presenting and Selling the Plan
– A marketing plan must be sold to…
– Members of marketing/sales departments
– Vendor/ad agencies and others
– Top management
Preparing for the Future
The participatory planning process allows people to understand the management process

People learn to become team players during the process

People learn to establish objectives and set time-tables to ensure they are met

People learn the process of establishing realistic strategies and tactics to meet objectives

People who approach the planning process with a receptive mind and employ the marketing plan will usually find it enhances their professional career

The most important features in the development of a marketing plan appear to be…
Management participation and commitment at all levels

Sufficient time for development

Specific training in developing a marketing plan

Tying incentives to the achievements of goals and objectives

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